iii
SOLUTION MANUAL FOR
C C
RISK MANAGEMENT AND INSURANCE 12TH EDITION JAMES TRIESCHMANN SANDRA GUSTA
C C C C C C C C C
VSON SANDRA GUSTAVSON, ROBERT HOYT SANDRA GUSTAVSON, ROBERT HOYT, DAVID
C C C C C C C C C C
SOMMER
CONTENTS
INSTRUCTOR’S MANUAL c
PARTc1: RISKcANDcTHEcRISKcMANAGEMENTcPROCESS
Chapterc1: IntroductionctocRisk .................................................................................................1
Chapterc2: RiskcIdentificationcandcEvaluation ..........................................................................4
Chapterc3: PropertycandcLiabilitycLosscExposures ....................................................................8
Chapterc4: Life,cHealth,candcLosscofcIncomecExposures .........................................................12
Chapterc5: RiskcManagementcTechniques:cNoninsurancecMethods ........................................16
Chapterc6: InsurancecascacRiskcManagementcTechnique:cPrinciples .......................................20
Chapterc7: InsurancecascacRiskcManagementcTechnique:cPolicycProvisions............................25
Chapterc8: SelectingcandcImplementingcRiskcManagementcTechniques .................................28
PARTc2:
COMMERCIALcRISKcMANAGEMENTcAPPLICATI
ONS:cPROPERTY-LIABILITY
Chapterc9: RiskcManagementcandcCommercialcProperty:cPartcI..............................................31
Chapterc10: RiskcManagementcandcCommercialcProperty:cPartcII ............................................34
Chapterc11: RiskcManagementcandcCommercialcLiabilitycRisk ................................................38
Chapterc12: Workers'cCompensationcandcAlternativecRiskcFinancing ......................................41
PARTc3:
PERSONALcRISKcMANAGEMENTcAPPLICATIO
NS:cPROPERTY-LIABILITY
Chapterc13: RiskcManagementcforcAutocOwners:cPartcI............................................................44
Chapterc14: RiskcManagementcforcAutocOwners:cPartcII...........................................................47
Chapterc15: RiskcManagementcforcHomeowners ......................................................................50
PARTc4:
RISKcMANAGEMENTcAPPLICATIONS:cLIFE,cHEA
LTH,cANDcINCOMEcEXPOSURES
Chapterc16: LosscofcLife ...........................................................................................................54
Chapterc17: LosscofcHealth ....................................................................................................... 59
Chapterc18: RetirementcPlanningcandcAnnuities .......................................................................65
Chapterc19: EmployeecBenefits:cLifecandcHealthcBenefits ........................................................69
Chapterc20: EmployeecBenefits:cRetirementcPlans ...................................................................73
Chapterc21: FinancialcandcEstatecPlanning................................................................................77
PARTc5: THEcRISKcMANAGEMENTcENVIRONMENT
Chapterc22: RiskcManagementcandcthecInsurancecIndustry .......................................................81
Chapterc23: FunctionscandcOrganizationcofcInsurers .................................................................85
,iv
Chapterc24: GovernmentcRegulationcofcRiskcManagementcandcInsurance ................................89
TEST BANK
c
PARTc1: RISKcANDcTHEcRISKcMANAGEMENTcPROCESS
Chapterc1: IntroductionctocRisk ...............................................................................................95
Chapterc2: RiskcIdentificationcandcEvaluation ...................................................................... 100
Chapterc3: PropertycandcLiabilitycLosscExposures ................................................................ 106
Chapterc4: Life,cHealth,candcLosscofcIncomecExposures........................................................ 114
Chapterc5: RiskcManagementcTechniques:cNoninsurancecMethods ...................................... 119
Chapterc6: InsurancecascacRiskcManagementcTechnique:cPrinciples ..................................... 124
Chapterc7: InsurancecascacRiskcManagementcTechnique:cPolicycProvisions.......................... 130
Chapterc8: SelectingcandcImplementingcRiskcManagementcTechniques ............................... 135
PARTc2:
COMMERCIALcRISKcMANAGEMENTcAPPLICATI
ONS:cPROPERTY-LIABILITY
Chapterc9: RiskcManagementcandcCommercialcProperty:cPartcI............................................ 140
Chapterc10: RiskcManagementcandcCommercialcProperty:cPartcII .......................................... 145
Chapterc11: RiskcManagementcandcCommercialcLiabilitycRisk .............................................. 150
Chapterc12: Workers'cCompensationcandcAlternativecRiskcFinancing .................................... 155
PARTc3:
PERSONALcRISKcMANAGEMENTcAPPLICATIO
NS:cPROPERTY-LIABILITY
Chapterc13: RiskcManagementcforcAutocOwners:cPartcI.......................................................... 160
Chapterc14: RiskcManagementcforcAutocOwners:cPartcII ........................................................ 165
Chapterc15: RiskcManagementcforcHomeowners .................................................................... 168
PARTc4:
RISKcMANAGEMENTcAPPLICATIONS:cLIFE,cHEA
LTH,cANDcINCOMEcEXPOSURES
Chapterc16: LosscofcLife ......................................................................................................... 173
Chapterc17: LosscofcHealth ..................................................................................................... 178
Chapterc18: RetirementcPlanningcandcAnnuities ..................................................................... 184
Chapterc19: EmployeecBenefits:cLifecandcHealthcBenefits ...................................................... 190
Chapterc20: EmployeecBenefits:cRetirementcPlans ................................................................. 195
Chapterc21: FinancialcandcEstatecPlanning.............................................................................. 200
PARTc5: THEcRISKcMANAGEMENTcENVIRONMENT
Chapterc22: RiskcManagementcandcthecInsurancecIndustry ..................................................... 205
Chapterc23: FunctionscandcOrganizationcofcInsurers ............................................................... 211
Chapterc24: GovernmentcRegulationcofcRiskcManagementcandcInsurance .............................. 218
CHAPTER 1 c
, v
Introduction to Risk c c
THEcBURDENcOFcRISKcDEFINITION
ScOFcRISK
PurecversuscSpeculativecRiskcStat
iccversuscDynamiccRiskcSubjectiv
ecversuscObjectivecRisk
SOURCEScOFcPUREcRISK
PropertycRisks
cLiabilitycRisk
s
Life,cHealth,candcLosscofcIncomecRiskscFinancia
lcRisk
MEASUREMENTcOFcRISK
ChancecofcLoss
PhysicalcHazard
cMoralecHazardc
MoralcHazard
DegreecofcRisk
MANAGEMENTcOFcRISK
KEYcTERMScANDcCONCEPTS
ChancecofclosscC
hiefcriskcofficercC
ostcofcriskcDegree
cofcriskcDynamicc
riskscEnterprisecri
skcmanagementcF
inancialcriskscFre
quencycHazardscI
ntegratedcriskcma
nagementcMoralc
hazardcMoralecha
zardcObjectivecris
kcPeril
Purecrisk
cRisk
Riskcmanagement
cRiskcmanagemen
tcprocess
RiskcmanagercS
everitycSpeculat
ivecriskcStaticcri
skscSubjectivecr
isk
,
SOLUTION MANUAL FOR
C C
RISK MANAGEMENT AND INSURANCE 12TH EDITION JAMES TRIESCHMANN SANDRA GUSTA
C C C C C C C C C
VSON SANDRA GUSTAVSON, ROBERT HOYT SANDRA GUSTAVSON, ROBERT HOYT, DAVID
C C C C C C C C C C
SOMMER
CONTENTS
INSTRUCTOR’S MANUAL c
PARTc1: RISKcANDcTHEcRISKcMANAGEMENTcPROCESS
Chapterc1: IntroductionctocRisk .................................................................................................1
Chapterc2: RiskcIdentificationcandcEvaluation ..........................................................................4
Chapterc3: PropertycandcLiabilitycLosscExposures ....................................................................8
Chapterc4: Life,cHealth,candcLosscofcIncomecExposures .........................................................12
Chapterc5: RiskcManagementcTechniques:cNoninsurancecMethods ........................................16
Chapterc6: InsurancecascacRiskcManagementcTechnique:cPrinciples .......................................20
Chapterc7: InsurancecascacRiskcManagementcTechnique:cPolicycProvisions............................25
Chapterc8: SelectingcandcImplementingcRiskcManagementcTechniques .................................28
PARTc2:
COMMERCIALcRISKcMANAGEMENTcAPPLICATI
ONS:cPROPERTY-LIABILITY
Chapterc9: RiskcManagementcandcCommercialcProperty:cPartcI..............................................31
Chapterc10: RiskcManagementcandcCommercialcProperty:cPartcII ............................................34
Chapterc11: RiskcManagementcandcCommercialcLiabilitycRisk ................................................38
Chapterc12: Workers'cCompensationcandcAlternativecRiskcFinancing ......................................41
PARTc3:
PERSONALcRISKcMANAGEMENTcAPPLICATIO
NS:cPROPERTY-LIABILITY
Chapterc13: RiskcManagementcforcAutocOwners:cPartcI............................................................44
Chapterc14: RiskcManagementcforcAutocOwners:cPartcII...........................................................47
Chapterc15: RiskcManagementcforcHomeowners ......................................................................50
PARTc4:
RISKcMANAGEMENTcAPPLICATIONS:cLIFE,cHEA
LTH,cANDcINCOMEcEXPOSURES
Chapterc16: LosscofcLife ...........................................................................................................54
Chapterc17: LosscofcHealth ....................................................................................................... 59
Chapterc18: RetirementcPlanningcandcAnnuities .......................................................................65
Chapterc19: EmployeecBenefits:cLifecandcHealthcBenefits ........................................................69
Chapterc20: EmployeecBenefits:cRetirementcPlans ...................................................................73
Chapterc21: FinancialcandcEstatecPlanning................................................................................77
PARTc5: THEcRISKcMANAGEMENTcENVIRONMENT
Chapterc22: RiskcManagementcandcthecInsurancecIndustry .......................................................81
Chapterc23: FunctionscandcOrganizationcofcInsurers .................................................................85
,iv
Chapterc24: GovernmentcRegulationcofcRiskcManagementcandcInsurance ................................89
TEST BANK
c
PARTc1: RISKcANDcTHEcRISKcMANAGEMENTcPROCESS
Chapterc1: IntroductionctocRisk ...............................................................................................95
Chapterc2: RiskcIdentificationcandcEvaluation ...................................................................... 100
Chapterc3: PropertycandcLiabilitycLosscExposures ................................................................ 106
Chapterc4: Life,cHealth,candcLosscofcIncomecExposures........................................................ 114
Chapterc5: RiskcManagementcTechniques:cNoninsurancecMethods ...................................... 119
Chapterc6: InsurancecascacRiskcManagementcTechnique:cPrinciples ..................................... 124
Chapterc7: InsurancecascacRiskcManagementcTechnique:cPolicycProvisions.......................... 130
Chapterc8: SelectingcandcImplementingcRiskcManagementcTechniques ............................... 135
PARTc2:
COMMERCIALcRISKcMANAGEMENTcAPPLICATI
ONS:cPROPERTY-LIABILITY
Chapterc9: RiskcManagementcandcCommercialcProperty:cPartcI............................................ 140
Chapterc10: RiskcManagementcandcCommercialcProperty:cPartcII .......................................... 145
Chapterc11: RiskcManagementcandcCommercialcLiabilitycRisk .............................................. 150
Chapterc12: Workers'cCompensationcandcAlternativecRiskcFinancing .................................... 155
PARTc3:
PERSONALcRISKcMANAGEMENTcAPPLICATIO
NS:cPROPERTY-LIABILITY
Chapterc13: RiskcManagementcforcAutocOwners:cPartcI.......................................................... 160
Chapterc14: RiskcManagementcforcAutocOwners:cPartcII ........................................................ 165
Chapterc15: RiskcManagementcforcHomeowners .................................................................... 168
PARTc4:
RISKcMANAGEMENTcAPPLICATIONS:cLIFE,cHEA
LTH,cANDcINCOMEcEXPOSURES
Chapterc16: LosscofcLife ......................................................................................................... 173
Chapterc17: LosscofcHealth ..................................................................................................... 178
Chapterc18: RetirementcPlanningcandcAnnuities ..................................................................... 184
Chapterc19: EmployeecBenefits:cLifecandcHealthcBenefits ...................................................... 190
Chapterc20: EmployeecBenefits:cRetirementcPlans ................................................................. 195
Chapterc21: FinancialcandcEstatecPlanning.............................................................................. 200
PARTc5: THEcRISKcMANAGEMENTcENVIRONMENT
Chapterc22: RiskcManagementcandcthecInsurancecIndustry ..................................................... 205
Chapterc23: FunctionscandcOrganizationcofcInsurers ............................................................... 211
Chapterc24: GovernmentcRegulationcofcRiskcManagementcandcInsurance .............................. 218
CHAPTER 1 c
, v
Introduction to Risk c c
THEcBURDENcOFcRISKcDEFINITION
ScOFcRISK
PurecversuscSpeculativecRiskcStat
iccversuscDynamiccRiskcSubjectiv
ecversuscObjectivecRisk
SOURCEScOFcPUREcRISK
PropertycRisks
cLiabilitycRisk
s
Life,cHealth,candcLosscofcIncomecRiskscFinancia
lcRisk
MEASUREMENTcOFcRISK
ChancecofcLoss
PhysicalcHazard
cMoralecHazardc
MoralcHazard
DegreecofcRisk
MANAGEMENTcOFcRISK
KEYcTERMScANDcCONCEPTS
ChancecofclosscC
hiefcriskcofficercC
ostcofcriskcDegree
cofcriskcDynamicc
riskscEnterprisecri
skcmanagementcF
inancialcriskscFre
quencycHazardscI
ntegratedcriskcma
nagementcMoralc
hazardcMoralecha
zardcObjectivecris
kcPeril
Purecrisk
cRisk
Riskcmanagement
cRiskcmanagemen
tcprocess
RiskcmanagercS
everitycSpeculat
ivecriskcStaticcri
skscSubjectivecr
isk
,
