CGFO - Financial Administration
What is the advantages of Risk Retention? - ✔️✔️Lower premiums
Align incentives
Create a safer work environment
What are the advantages of participating in a Risk Pool? - ✔️✔️Vehicle for government
to pool funds.
Affordable cost through economies of scale
Provide services to reduce risk
What are three reasons to manage risk? - ✔️✔️Create a safe workplace
Prevent financial losses
Provide stability (budget)
What are the three approaches to managing operational and financial risk> -
✔️✔️Investment portfolio policies (long-term and short-term)
Diversification strategies (spread risk)
Custody of assets (procedures)
What are 7 sources of risk? - ✔️✔️Physical
Legal
Operational
Political
Social
Economic
Cognitive (I.T. hack)
What are three tools to minimize risk? - ✔️✔️Risk transfer - shift the burden to another,
purchase insurance, or risk pool, level premiums for budget
Risk retention - assume risk responsibilities internally
Risk avoidance - Do not provide service
What are the four parts of a Risk Management Program? - ✔️✔️Risk Identification
Risk evaluation
Risk treatment
Implementation
According to GASB 10, list the types of risk - ✔️✔️Torts
Theft of damage to, or destruction of assets
Business interuption
Errors or omissions
Job-related illnesses or injuries to employees
Acts of God
,Any other risk of loss assumed under a policy or participation contract issued by a
public entity risk pool
Risk of loss resulting when an entity agrees to provide accident and health, dental, and
other medical benefits to its employees.
What are the two ways to mange risk? - ✔️✔️Manage an organization's activities to
minimize adverse effects of certain types of losses
Mitigate risk by purchasing insurance.
In the case of Risk Retention, if claims are greater than premiums = (Gain or Loss) -
✔️✔️Loss
In the case of Risk Retention, if claims are less than premiums = (Gain or Loss) -
✔️✔️Gain
Risk Pool - Premium = - ✔️✔️Revenue
Define IBNR - ✔️✔️Incurred but not reported claims
When is IBNR recorded? - ✔️✔️Record when event triggers coverage under policy
What amount is IBNR recorded? - ✔️✔️Amount based on estimate to settle claim.
How is IBNR recorded? - ✔️✔️As an accrual based on probable loss that can be
reasonably estimated, recoreded as an expense/liability.
How do we minimize risk? - ✔️✔️Provide safety in the workplace
Inspect buildings
Install extinquishers, sprinklers, smoke detectors
Training
What three areas should we monitor for risks? - ✔️✔️One-time projects
Geography (example: stormwater)
Unique Services
What should a Risk Management Committee accomplish? - ✔️✔️Create a Risk
Management policy
Develop inspection programs
Design safety
Create claims investigation system
Identify safety measures
Develop disciplinary procedures
Establish review boards
, Why have a Risk Management Committee? - ✔️✔️Get staff involved
Gain employee "buy-in"
Investigate serious injury and accidents to provide a safer environment and reduce risk
What are the benefits of a Risk Management Committee? - ✔️✔️Reduced lost
workdays
Prevent day for accidental losses
Eliminate concerns associated with future projects
What are the benefits of Risk Transfer (Insurance)? - ✔️✔️Identifies and assumes the
risk
Sets premiums accordingly for employer to purchase
What are some of the disadvantages of Risk Transfer (Insurance)? - ✔️✔️Change of
behavior due to purchase of insurance
Industry has incentive
What are three risk exposures that can be transferred? - ✔️✔️Damage and loss of
property - Property Insurance
Negligence in performance - Liability Insurance
Medical coverage for job related injuries - Workers' Compensation
What type of risk transfer has the largest number of claims? - ✔️✔️Workers'
Compensation
Shifting risk to a contractor can protect and indemnify against what two types of loss? -
✔️✔️Direct loss (example: garbage disposal)
Indirect loss (example: worker's comp)
Hold harmless provisions can protect against what? - ✔️✔️Non-insurance risk
Certain situations in contract
Negligence
Joint negligence
Are agreements the panacea to transfer risk? - ✔️✔️No.
What are ways to finance risk? - ✔️✔️Pay premiums
Contribute to pool
Pay claims (self insurance)
What are ways to prevent risk? - ✔️✔️Little on administration
Evaluate loss control
Provide safety training
What is the advantages of Risk Retention? - ✔️✔️Lower premiums
Align incentives
Create a safer work environment
What are the advantages of participating in a Risk Pool? - ✔️✔️Vehicle for government
to pool funds.
Affordable cost through economies of scale
Provide services to reduce risk
What are three reasons to manage risk? - ✔️✔️Create a safe workplace
Prevent financial losses
Provide stability (budget)
What are the three approaches to managing operational and financial risk> -
✔️✔️Investment portfolio policies (long-term and short-term)
Diversification strategies (spread risk)
Custody of assets (procedures)
What are 7 sources of risk? - ✔️✔️Physical
Legal
Operational
Political
Social
Economic
Cognitive (I.T. hack)
What are three tools to minimize risk? - ✔️✔️Risk transfer - shift the burden to another,
purchase insurance, or risk pool, level premiums for budget
Risk retention - assume risk responsibilities internally
Risk avoidance - Do not provide service
What are the four parts of a Risk Management Program? - ✔️✔️Risk Identification
Risk evaluation
Risk treatment
Implementation
According to GASB 10, list the types of risk - ✔️✔️Torts
Theft of damage to, or destruction of assets
Business interuption
Errors or omissions
Job-related illnesses or injuries to employees
Acts of God
,Any other risk of loss assumed under a policy or participation contract issued by a
public entity risk pool
Risk of loss resulting when an entity agrees to provide accident and health, dental, and
other medical benefits to its employees.
What are the two ways to mange risk? - ✔️✔️Manage an organization's activities to
minimize adverse effects of certain types of losses
Mitigate risk by purchasing insurance.
In the case of Risk Retention, if claims are greater than premiums = (Gain or Loss) -
✔️✔️Loss
In the case of Risk Retention, if claims are less than premiums = (Gain or Loss) -
✔️✔️Gain
Risk Pool - Premium = - ✔️✔️Revenue
Define IBNR - ✔️✔️Incurred but not reported claims
When is IBNR recorded? - ✔️✔️Record when event triggers coverage under policy
What amount is IBNR recorded? - ✔️✔️Amount based on estimate to settle claim.
How is IBNR recorded? - ✔️✔️As an accrual based on probable loss that can be
reasonably estimated, recoreded as an expense/liability.
How do we minimize risk? - ✔️✔️Provide safety in the workplace
Inspect buildings
Install extinquishers, sprinklers, smoke detectors
Training
What three areas should we monitor for risks? - ✔️✔️One-time projects
Geography (example: stormwater)
Unique Services
What should a Risk Management Committee accomplish? - ✔️✔️Create a Risk
Management policy
Develop inspection programs
Design safety
Create claims investigation system
Identify safety measures
Develop disciplinary procedures
Establish review boards
, Why have a Risk Management Committee? - ✔️✔️Get staff involved
Gain employee "buy-in"
Investigate serious injury and accidents to provide a safer environment and reduce risk
What are the benefits of a Risk Management Committee? - ✔️✔️Reduced lost
workdays
Prevent day for accidental losses
Eliminate concerns associated with future projects
What are the benefits of Risk Transfer (Insurance)? - ✔️✔️Identifies and assumes the
risk
Sets premiums accordingly for employer to purchase
What are some of the disadvantages of Risk Transfer (Insurance)? - ✔️✔️Change of
behavior due to purchase of insurance
Industry has incentive
What are three risk exposures that can be transferred? - ✔️✔️Damage and loss of
property - Property Insurance
Negligence in performance - Liability Insurance
Medical coverage for job related injuries - Workers' Compensation
What type of risk transfer has the largest number of claims? - ✔️✔️Workers'
Compensation
Shifting risk to a contractor can protect and indemnify against what two types of loss? -
✔️✔️Direct loss (example: garbage disposal)
Indirect loss (example: worker's comp)
Hold harmless provisions can protect against what? - ✔️✔️Non-insurance risk
Certain situations in contract
Negligence
Joint negligence
Are agreements the panacea to transfer risk? - ✔️✔️No.
What are ways to finance risk? - ✔️✔️Pay premiums
Contribute to pool
Pay claims (self insurance)
What are ways to prevent risk? - ✔️✔️Little on administration
Evaluate loss control
Provide safety training
