RMI 2101 MAIN EXAM 2026 SET QUESTIONS AND ANSWERS RATED A.pdf

RMI 2101 MAIN EXAM 2026 SET QUESTIONS AND
ANSWERS RATED A+
✔✔Which commodities are being purchased with insurance? - ✔✔- Risk transfer
- Certainty
- Peace of mind
- Safety
- Enhanced credit worthiness

✔✔Indemnify - ✔✔Compensate

✔✔Fully Indemnified - ✔✔Place the insured in the same position financially after the
loss as they were prior to the loss.

✔✔Forms of Indemnification (4) - ✔✔1. Cash; payed after the loss occurs and
determined after the loss occurs.
2. Cash; payed after the loss occurs and determined before the loss occurs.
3. Repair or replace an asset
4. Provide services as a way to indemnify

✔✔General requirements of insurable risk (2) - ✔✔1. Supply of insurance
2. Demand for insurance

✔✔A risk is insurable if... - ✔✔PI is less than or equal to Pmax

✔✔Why might PI be greater than Pmax - ✔✔1. PI is too high
2. P Max is too low

✔✔PI is too high (3) - ✔✔1. P* is high
2. Risk Charge is high
3. Administrative costs are high

✔✔Pmax is too low - ✔✔Individuals underestimate the frequency and/or severity of the
loss. (NFIP)

✔✔Specific requirements of insurable risk (5) - ✔✔1. Loss should be fortuitous in
nature.
2. Losses should be definite and determinable
3. Loss should be significant to the insurer.
4. The risk pool should be large and contain homogeneous exposure units.
5. Loss should not be catastrophic in nature to the insurer.

✔✔1. Loss should be fortuitous in nature. - ✔✔Loss should be random, accidental or a
matter of chance. Insured should not have control over freq. or severity.