RMI 201 Exam 2025 Questions and
Answers
insurable risk - ANSWER✔✔-1) risk that is faced by a large number of people and for
which the amount of the loss can be predicted; 2) risk which is accidental or
unintentional; 3) Loss must be measurable; 4) cannot be catastrophic; 5) loss is
calculable; 6) accessible premium rates
worker's compensation - ANSWER✔✔-health insurance plan providing treatment for
workers injured on the job
Speculative Risk - ANSWER✔✔-Risk could have loss or gain.
Pure risk - ANSWER✔✔-a risk that presents the chance of loss but no opportunity for
gain
strategic risk - ANSWER✔✔-risks regarding the firm's financial goals and objectives
enterprise risk - ANSWER✔✔-encompasses all major risks faced by a business firm,
which include: pure risk, speculative risk, strategic risk, operational risk, and financial
risk
,Reinsurance - ANSWER✔✔-An insurance company does not want to assume all the risk
for their company. They often purchase insurance from other insurance companies. The
shifting of an insured risk from one insurance company to another is called...
Underwriting - ANSWER✔✔-the process of selecting, classifying, and pricing
applicants for insurance
coinsurance - ANSWER✔✔-a provision under which both the insured and the insurer
share the covered losses
liability insurance - ANSWER✔✔-bodily and property payment to others if a member
of the insured household accidentally causes harm to other people or property
chance of loss - ANSWER✔✔-probability of risk
TRIA - ANSWER✔✔-Terrorism Risk Insurance Act
Insurance applied outside the U.S - ANSWER✔✔-not liable - no coverage; example war
i Ukraine
non-insurance - ANSWER✔✔-alternative insurance options outside insurance
company: 1) self insurance; 2) Risk retention; 3) captive insurance; 4) warranties
captive insurance - ANSWER✔✔-an insurer owned by a parent firm for the purpose of
insuring the parent firm's loss exposures
, Adverse selection - ANSWER✔✔-people who are higher risk of loss seek insurance at
standard rates.
Non-diversified risk - ANSWER✔✔-a risk which is not spread out
Diversified - ANSWER✔✔-risk effecting a large amount of people, spread out over a
large population
objective risk - ANSWER✔✔-not opinionated: data and evidence
characteristics of insurance - ANSWER✔✔-- Pooling of losses
- Risk transfer
- Indemnification
- Payment of fortuitous losses
risk manager - ANSWER✔✔-identifying risks for the company and to determine how
likely a risk is, as well as its severity of impact on the company.
underwriter - ANSWER✔✔-analyzes risk, decide if should insure good or bad risk
pooling assests - ANSWER✔✔-sharing losses inside a group
Sally started a business. Starting a new business is risky. Sally wants to make a profit.
What type of risk is sally's business? - ANSWER✔✔-Speculative - don't know if the
business will succeed or fail.
Answers
insurable risk - ANSWER✔✔-1) risk that is faced by a large number of people and for
which the amount of the loss can be predicted; 2) risk which is accidental or
unintentional; 3) Loss must be measurable; 4) cannot be catastrophic; 5) loss is
calculable; 6) accessible premium rates
worker's compensation - ANSWER✔✔-health insurance plan providing treatment for
workers injured on the job
Speculative Risk - ANSWER✔✔-Risk could have loss or gain.
Pure risk - ANSWER✔✔-a risk that presents the chance of loss but no opportunity for
gain
strategic risk - ANSWER✔✔-risks regarding the firm's financial goals and objectives
enterprise risk - ANSWER✔✔-encompasses all major risks faced by a business firm,
which include: pure risk, speculative risk, strategic risk, operational risk, and financial
risk
,Reinsurance - ANSWER✔✔-An insurance company does not want to assume all the risk
for their company. They often purchase insurance from other insurance companies. The
shifting of an insured risk from one insurance company to another is called...
Underwriting - ANSWER✔✔-the process of selecting, classifying, and pricing
applicants for insurance
coinsurance - ANSWER✔✔-a provision under which both the insured and the insurer
share the covered losses
liability insurance - ANSWER✔✔-bodily and property payment to others if a member
of the insured household accidentally causes harm to other people or property
chance of loss - ANSWER✔✔-probability of risk
TRIA - ANSWER✔✔-Terrorism Risk Insurance Act
Insurance applied outside the U.S - ANSWER✔✔-not liable - no coverage; example war
i Ukraine
non-insurance - ANSWER✔✔-alternative insurance options outside insurance
company: 1) self insurance; 2) Risk retention; 3) captive insurance; 4) warranties
captive insurance - ANSWER✔✔-an insurer owned by a parent firm for the purpose of
insuring the parent firm's loss exposures
, Adverse selection - ANSWER✔✔-people who are higher risk of loss seek insurance at
standard rates.
Non-diversified risk - ANSWER✔✔-a risk which is not spread out
Diversified - ANSWER✔✔-risk effecting a large amount of people, spread out over a
large population
objective risk - ANSWER✔✔-not opinionated: data and evidence
characteristics of insurance - ANSWER✔✔-- Pooling of losses
- Risk transfer
- Indemnification
- Payment of fortuitous losses
risk manager - ANSWER✔✔-identifying risks for the company and to determine how
likely a risk is, as well as its severity of impact on the company.
underwriter - ANSWER✔✔-analyzes risk, decide if should insure good or bad risk
pooling assests - ANSWER✔✔-sharing losses inside a group
Sally started a business. Starting a new business is risky. Sally wants to make a profit.
What type of risk is sally's business? - ANSWER✔✔-Speculative - don't know if the
business will succeed or fail.
