INSR 310 UPDATED COMPREHENSIVE EXAMS
QUESTIONS AND ANSWERS SURE A+
✔✔private vs public property
industrialized society
well organized legal system
ethical environment
relatively stable economy - ✔✔What factors are the basis for growth of insurance?
✔✔with private property you have an incentive to take care of your assets - ✔✔what is
the difference between private and public property?
✔✔specialization of jobs/skills
depend on monetary income - ✔✔how does an industrialized society contribute to the
basis for growth of insurance?
✔✔enforceable contracts give the right to have things and ability to sue that society will
help to enforce - ✔✔how does a well-organized legal system contribute to the basis for
growth of insurance?
✔✔supports contract enforceability - ✔✔how does an ethical environment contribute to
the basis for growth of insurance?
, ✔✔supports planning because insurance is future oriented and there are greater
disincentives for loss - ✔✔how does a relatively stable economy contribute to the basis
for growth of insurance?
✔✔personal: income streams/cashflows
property direct loss of assets
liability to others: losses caused by you
failure of others: losses due to others - ✔✔what are the types of commercially insurable
risks and what do they concern?
✔✔Insurance is a risk-reducing/decreasing activity for/by all parties to contract
- Insured transfers risk away
- INSCO spread/shares individual risk with all insured in pool and beyond
- Both sides of the transaction reduce
risk
Gambling/Speculation increases risk on both sides of the transaction and typically does
NOT meet elements of "insurability" - ✔✔what is the difference between insurance and
gambling/speculation?
✔✔risk transfer - ✔✔reduces individual reserve commitment necessary
✔✔risk transfer, which leads to entrepreneurship
reduced mental anguish
enhanced economic stability - ✔✔what are the social/economic benefits of insurance?
✔✔intentional losses can/do occur
fraud/attempts to profit from or exaggerate losses can/do occur
non-optimal use/consumption of resources - ✔✔what are the social/economic costs of
insurance?
✔✔commercial and legal relationships with third parties (contracts)
general economic & business circumstances (unemployment/inflation)
human behavior (good/bad)
natural & man made losses (storms/terrorism)
government (court/judicial interpretations)
QUESTIONS AND ANSWERS SURE A+
✔✔private vs public property
industrialized society
well organized legal system
ethical environment
relatively stable economy - ✔✔What factors are the basis for growth of insurance?
✔✔with private property you have an incentive to take care of your assets - ✔✔what is
the difference between private and public property?
✔✔specialization of jobs/skills
depend on monetary income - ✔✔how does an industrialized society contribute to the
basis for growth of insurance?
✔✔enforceable contracts give the right to have things and ability to sue that society will
help to enforce - ✔✔how does a well-organized legal system contribute to the basis for
growth of insurance?
✔✔supports contract enforceability - ✔✔how does an ethical environment contribute to
the basis for growth of insurance?
, ✔✔supports planning because insurance is future oriented and there are greater
disincentives for loss - ✔✔how does a relatively stable economy contribute to the basis
for growth of insurance?
✔✔personal: income streams/cashflows
property direct loss of assets
liability to others: losses caused by you
failure of others: losses due to others - ✔✔what are the types of commercially insurable
risks and what do they concern?
✔✔Insurance is a risk-reducing/decreasing activity for/by all parties to contract
- Insured transfers risk away
- INSCO spread/shares individual risk with all insured in pool and beyond
- Both sides of the transaction reduce
risk
Gambling/Speculation increases risk on both sides of the transaction and typically does
NOT meet elements of "insurability" - ✔✔what is the difference between insurance and
gambling/speculation?
✔✔risk transfer - ✔✔reduces individual reserve commitment necessary
✔✔risk transfer, which leads to entrepreneurship
reduced mental anguish
enhanced economic stability - ✔✔what are the social/economic benefits of insurance?
✔✔intentional losses can/do occur
fraud/attempts to profit from or exaggerate losses can/do occur
non-optimal use/consumption of resources - ✔✔what are the social/economic costs of
insurance?
✔✔commercial and legal relationships with third parties (contracts)
general economic & business circumstances (unemployment/inflation)
human behavior (good/bad)
natural & man made losses (storms/terrorism)
government (court/judicial interpretations)
