AINS 101 | 112 Question with 100 % correct answers |
Verified (GRADED A+)
Insuring individuals with a high probability of loss at a cost lower than the
insurer would normally charge for that risk because it wasn't aware of
the actual risk involved is known as
A. Adverse selection.
B. Unprofitable business.
C. Policyholders' surplus.
D. Capacity. - VERIFIED ANSWER - Adverse selection.
Which one of the following best describes the concept of pooling?
A. The financial consequences of unanticipated losses are transferred to
an insurer.
B. Risk management is concerned with positive and negative risks.
C. Insureds share the cost of each other's losses.
D. Insurance benefits society as a whole. - VERIFIED ANSWER - Insureds
share the cost of each other's losses.
,Which one of the following represents uncertainty about outcomes that
can be negative or positive?
A. Loss exposure
B. Transfer
C. Risk
D. Pooling - VERIFIED ANSWER - Risk
Clare is a commercial lines underwriter. She always tries to follow
underwriting guidelines, effectively evaluate loss exposures, and charge
adequate premiums. By doing these things, Clare's goal is to ensure
A. Adequate policyholders' surplus.
B. A significant bonus.
C. A collaborative relationship with her producers.
D. Adverse selection. - VERIFIED ANSWER - Adequate policyholders'
surplus.
Which one of the following statements is correct regarding the
interaction between risk control and other insurer functions?
A. Risk control representatives are responsible for compiling all the
information required for a premium audit.
,B. Risk control personnel can assist underwriters in modifying a new
applicant's loss exposures to meet eligibility requirements.
C. By making marginal accounts acceptable, risk control helps the Claims
Department settle losses.
D. Risk control personnel are responsible for answering any complex
questions that insureds have about premium audits. - VERIFIED ANSWER -
Risk control personnel can assist underwriters in modifying a new
applicant's loss exposures to meet eligibility requirements.
Brian works in the Underwriting department for DGH Insurance. In
addition to carefully selecting insureds, he works with producers and
premium auditors to ensure accurate classification and pricing. Brian is a
A. Staff underwriter
B. Corporate underwriter
C. Field underwriter
D. Account manager - VERIFIED ANSWER - Field underwriter
Aimee recently accepted a job in the Underwriting department at Noble
Insurance Company. Her responsibilities will include developing coverage
forms, arranging reinsurance agreements, and conducting underwriting
audits. Which one of the following is the title of Aimee's new job?
, A. Field Underwriter
B. Underwriting Technician
C. Corporate Underwriter
D. Line Underwriter - VERIFIED ANSWER - Corporate Underwriter
(Corporate underwriters, sometimes referred to as staff underwriters,
perform duties including: developing coverage forms, arranging
reinsurance, conducting underwriting audits, researching the market, and
revising underwriting guidelines.)
As an experienced underwriter, Rick has learned to make every effort to
avoid a mistake that can produce insufficient premium to cover losses, or
pricing that isn't competitive. Which one of the following underwriting
mistakes can often cause these issues?
A. Misclassifying exposures
B. Recommending the applicant implement risk control measures
C. Using predictive models
D. Adjusting policy terms and conditions - VERIFIED ANSWER -
Misclassifying exposures
(Misclassification of exposures can produce insufficient premium to cover
losses or pricing that isn't competitive.)
Verified (GRADED A+)
Insuring individuals with a high probability of loss at a cost lower than the
insurer would normally charge for that risk because it wasn't aware of
the actual risk involved is known as
A. Adverse selection.
B. Unprofitable business.
C. Policyholders' surplus.
D. Capacity. - VERIFIED ANSWER - Adverse selection.
Which one of the following best describes the concept of pooling?
A. The financial consequences of unanticipated losses are transferred to
an insurer.
B. Risk management is concerned with positive and negative risks.
C. Insureds share the cost of each other's losses.
D. Insurance benefits society as a whole. - VERIFIED ANSWER - Insureds
share the cost of each other's losses.
,Which one of the following represents uncertainty about outcomes that
can be negative or positive?
A. Loss exposure
B. Transfer
C. Risk
D. Pooling - VERIFIED ANSWER - Risk
Clare is a commercial lines underwriter. She always tries to follow
underwriting guidelines, effectively evaluate loss exposures, and charge
adequate premiums. By doing these things, Clare's goal is to ensure
A. Adequate policyholders' surplus.
B. A significant bonus.
C. A collaborative relationship with her producers.
D. Adverse selection. - VERIFIED ANSWER - Adequate policyholders'
surplus.
Which one of the following statements is correct regarding the
interaction between risk control and other insurer functions?
A. Risk control representatives are responsible for compiling all the
information required for a premium audit.
,B. Risk control personnel can assist underwriters in modifying a new
applicant's loss exposures to meet eligibility requirements.
C. By making marginal accounts acceptable, risk control helps the Claims
Department settle losses.
D. Risk control personnel are responsible for answering any complex
questions that insureds have about premium audits. - VERIFIED ANSWER -
Risk control personnel can assist underwriters in modifying a new
applicant's loss exposures to meet eligibility requirements.
Brian works in the Underwriting department for DGH Insurance. In
addition to carefully selecting insureds, he works with producers and
premium auditors to ensure accurate classification and pricing. Brian is a
A. Staff underwriter
B. Corporate underwriter
C. Field underwriter
D. Account manager - VERIFIED ANSWER - Field underwriter
Aimee recently accepted a job in the Underwriting department at Noble
Insurance Company. Her responsibilities will include developing coverage
forms, arranging reinsurance agreements, and conducting underwriting
audits. Which one of the following is the title of Aimee's new job?
, A. Field Underwriter
B. Underwriting Technician
C. Corporate Underwriter
D. Line Underwriter - VERIFIED ANSWER - Corporate Underwriter
(Corporate underwriters, sometimes referred to as staff underwriters,
perform duties including: developing coverage forms, arranging
reinsurance, conducting underwriting audits, researching the market, and
revising underwriting guidelines.)
As an experienced underwriter, Rick has learned to make every effort to
avoid a mistake that can produce insufficient premium to cover losses, or
pricing that isn't competitive. Which one of the following underwriting
mistakes can often cause these issues?
A. Misclassifying exposures
B. Recommending the applicant implement risk control measures
C. Using predictive models
D. Adjusting policy terms and conditions - VERIFIED ANSWER -
Misclassifying exposures
(Misclassification of exposures can produce insufficient premium to cover
losses or pricing that isn't competitive.)
