C16 Mock Final Exam
Comprehensive Questions
(Frequently Tested) and Complete
Solutions Graded A+
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What are the two basic principles of insurance? - Answer: -The
premiums of the many are used to pay losses of the few.
-The premium shall be commensurate with the risk
,Explain the supply and demand theory in the study of economics
(6 points) - Answer: -Theory of supply and demand analyzes the
way pricing is regulated by balancing the amount of a product
made available for purchase with the quantity required by
consumers
-For example, if there's an increase of consumers buying online
insurance, then that's the direction the market is progressing
-Law of supply shows that the quantity of a product a supplier will
provide is relative to amount of payment per unit they receive
-Law of demand states that if all other factors remain equal, fewer
people will demand product as its price rises
-Insurance mandated by law or lenders is not fully governed by
supply and demand laws
-Rate peaks and valleys are generally caused by capacity (supply)
limitations
Describe the techniques used in financial statement analysis.
Explain why these techniques are important for establishing
premium. (5 pts) - Answer: TIME COMPARISON - figures reported
in current report compared to previous accounting period
BUDGET COMPARISON - Compare current results to budget or
plan
RELATIONSHIP COMPARISON - Use ratios to compare results of
one aspect to another area or period
, DETAILED BREAKDOWN - Determine what's been included in each
item of the statement
BENCHMARK COMPARISON - Compare results to external sources
such as stock exchange indexes
An insurance company's sales (written premiums) are reported as
_________________ (earned premiums) gradually over the term
of a policy. One of the accounting concepts is the _____________
principle. Expenses are reported in the same period and matched
to revenues they helped to earn - Answer: revenues, matching
Provide the formula used for the calculation of Incurred Losses
during an annual period - Answer: Losses incurred/Net premiums
earned
List and explain the four functions of reinsurance (3, 2, 2, 2 points)
- Answer: FINANCING
-unique method of financing to insurance companies
-frees up capital
-may be used to commence or expand operations, acquire
subsidiary, or to meet solvency regulations
STABILIZATION
Comprehensive Questions
(Frequently Tested) and Complete
Solutions Graded A+
Professional Academic Assistance Services
Services Offered
• Proctored Exam Assistance
• Online Class Management (Full Course Support)
• Exam Preparation & Study Materials
• Assignments and Coursework Support
• Essay and Research Paper Writing
• Discussion Posts & Responses
• Editing and Proofreading
• Confidential Academic Consultation
Contact Information
Email:
WhatsApp link: https://wa.me/254704846336
Fast Response | Confidential | Reliable Academic Support
Helping Students Achieve Academic Excellence
What are the two basic principles of insurance? - Answer: -The
premiums of the many are used to pay losses of the few.
-The premium shall be commensurate with the risk
,Explain the supply and demand theory in the study of economics
(6 points) - Answer: -Theory of supply and demand analyzes the
way pricing is regulated by balancing the amount of a product
made available for purchase with the quantity required by
consumers
-For example, if there's an increase of consumers buying online
insurance, then that's the direction the market is progressing
-Law of supply shows that the quantity of a product a supplier will
provide is relative to amount of payment per unit they receive
-Law of demand states that if all other factors remain equal, fewer
people will demand product as its price rises
-Insurance mandated by law or lenders is not fully governed by
supply and demand laws
-Rate peaks and valleys are generally caused by capacity (supply)
limitations
Describe the techniques used in financial statement analysis.
Explain why these techniques are important for establishing
premium. (5 pts) - Answer: TIME COMPARISON - figures reported
in current report compared to previous accounting period
BUDGET COMPARISON - Compare current results to budget or
plan
RELATIONSHIP COMPARISON - Use ratios to compare results of
one aspect to another area or period
, DETAILED BREAKDOWN - Determine what's been included in each
item of the statement
BENCHMARK COMPARISON - Compare results to external sources
such as stock exchange indexes
An insurance company's sales (written premiums) are reported as
_________________ (earned premiums) gradually over the term
of a policy. One of the accounting concepts is the _____________
principle. Expenses are reported in the same period and matched
to revenues they helped to earn - Answer: revenues, matching
Provide the formula used for the calculation of Incurred Losses
during an annual period - Answer: Losses incurred/Net premiums
earned
List and explain the four functions of reinsurance (3, 2, 2, 2 points)
- Answer: FINANCING
-unique method of financing to insurance companies
-frees up capital
-may be used to commence or expand operations, acquire
subsidiary, or to meet solvency regulations
STABILIZATION
