Which of the following is a function of participation insurance? Pay dividends to the owner of the policy. (A participating insurance policy will pay the policyholder dividends depending on the actual mortality cost, interest generated, and costs.) Events or events that raise the likelihood that an insured loss may occur are known as.
- Conditions such as lifestyle and current health, as well as sports such as scuba diving, might increase the likelihood of a loss happening.
- Which of the following is NOT a risk retention objective? To reduce the extent of the insured’s obligation in the case of a loss.
- Retention often stems from three fundamental insured goals: to decrease expenditures and enhance cash flow, to better control over claim reservings and claims settlements, and to finance losses that cannot be insured.
When evaluating the premium rates for an individual seeking insurance, an underwriter does NOT consider which of the following? Age, medical history, and sex give reliable statistical information for evaluating the likelihood of loss. Race, religion, sexual orientation, etc., are among the criteria that cannot be employed since there is insufficient statistical evidence to demonstrate that they affect the chance of loss; hence, they are deemed discriminatory.
Which of the following insurance is held by investors with typical ownership rights, including voting rights? Stockholders own and control only stock insurance firms. Which of the following terms best describes a licensed insurer? Admitted- Insurers who fulfill the state’s financial standards and are permitted to do business in the state are deemed authorized or admitted as legal insurers.
Which authority is NOT included in the agent’s contract, but is necessary for the agent to conduct business? Implied- Implied authority occurs because a contract cannot specify every facet of an agent’s authority. The insurer must be able to rely on the application’s declarations, and the insured must be able to depend on the insurer to pay genuine claims.
In insurance contract formation, this is referred to as: Individuals transmit their risk of loss to a broader population through the usage of what? Insurance is the process through which an insured is protected against loss resulting from a specified future disaster or risk in exchange for a current premium payment.
Due to the fact that many other persons with a comparable or identical risk of loss are paying premiums, monies are available to compensate those who actually sustain that loss. Which of the following is not a policy consideration? The application submitted by a potential insured- Consideration is the transfer of anything of value between two parties in order to constitute a legal contract.
- Typically, an insurance offer is made when: In insurance, the applicant often makes an offer in the form of a completed application.
- Acceptance occurs when the underwriter of an insurance approves the application and provides the policy.
- Which of the following is an illustration of apparent authority of an insurer’s agent? The agent takes a premium after the grace period has expired.
What paperwork offers an agent explicit authority? Agent’s contract with the principle – Through the agent’s contract, the principal delegates authority to the agent. The insurer may infer that a moral hazard exists if the policyholder: – Is dishonest about his health on the application for insurance; or – Is dishonest about his income on the application for insurance.
- Moral risks are applicants who lie on their insurance applications or who have previously filed false claims against insurers.
- When does acceptance often occur in drafting an insurance contract? When an insurer’s underwriter authorizes insurance coverage, the applicant often makes the offer in the form of an application.
Acceptance occurs when the underwriter of an insurance approves the application and provides the policy. Events or circumstances that raise the likelihood of an insured loss occurring are referred to as causes. Which of the following insurance choices is a risk-sharing arrangement? When obtaining insurance through a reciprocal insurer, the insureds share the risk of loss with other subscribers of that insurer.
Typically, an insurance offer is given when. – A full application is submitted. When obtaining insurance through a reciprocal insurer, the insureds share the risk of loss with other subscribers of that particular insurer. The requirement that agents not mix their personal funds with insurance funds is known as “separation of funds.” Trust responsibilities – Money collected in connection with an insurance transaction must be retained by the agent or broker in a position of trust.
Which of the following is an illustration of the fiduciary obligation of a producer? A client’s confidence in the producer’s ability to handle premiums. – When handling the financial affairs of their clients, including the administration of premiums, an agent operates in a fiduciary position based on trust and confidence.
Who shares the risk under the terms of an insurance policy?
In contrast to other forms of insurance, health insurance risk is shared by three parties: the insurance company, the individuals who purchase their policies, and the government (called members). By the insurance company and medical experts who care for its members.
Identification of Options | Action Plan Development | Action Plan Approval | Action Plan Implementation | Identification of Remaining Risks Risk Treatment is the process of identifying and executing strategies to modify risk, according to its definition.
- Avoiding, optimizing, transferring, or keeping risk are all viable risk management strategies.
- The measures (i.e., security measurements) can be chosen from sets of security measurements utilized inside the organization’s Information Security Management System (ISMS).
- At this level, security measures consist of verbal descriptions of various security functions that are implemented technically (e.g., Software or Hardware) or organizationally (e.g.
established procedures).
What are the four primary risk reactions?
Considering that project managers and risk practitioners are familiar with the four basic risk response methods (for threats) of avoid, transfer, mitigate, and accept, it appears prudent to utilize them as a basis for constructing strategies suitable for reacting to discovered opportunities.