C11 Principles and Practice of Insurance
|\ |\ |\ |\ |\ |\
EXAM WITH ANSWERS |\ |\
Areas of regulation for Intermediaries - CORRECT
|\ |\ |\ |\ |\ |\ |\
ANSWERS ✔✔Q-ualifaction (must pass test) |\ |\ |\ |\
O-peration of business (must follow requirements) |\ |\ |\ |\ |\
L- Icences - Must have license
|\ |\ |\ |\ |\
L- icence Renewal - Renewed annual
|\ |\ |\ |\ |\
The Categories of insurance: - CORRECT ANSWERS ✔✔1)
|\ |\ |\ |\ |\ |\ |\ |\
Social |\
-Workers Compensation |\ |\
2) Life and Health
|\ |\ |\ |\
Life, accident and sickness, and disability.
|\ |\ |\ |\ |\ |\
3) General property/casualty insurance
|\ |\ |\ |\
Personal Property |\
Boiler and Machinery |\ |\ |\
Automobile
Commercial property |\ |\
Crime |\
Business interruption |\ |\
Liability |\
,Aviation |\
Marine
Inland Transport |\
Main functions of insurance - CORRECT ANSWERS ✔✔1.)
|\ |\ |\ |\ |\ |\ |\ |\
Spread of risk - volume, diversity of risk, location
|\ |\ |\ |\ |\ |\ |\ |\
2.) Security - Peace of mind
|\ |\ |\ |\ |\
3.) Credit - Individuals, banks
|\ |\ |\ |\
4.) Capital - Premium investments
|\ |\ |\ |\ |\
5.) Employment - Insurance creates jobs
|\ |\ |\ |\ |\
6.) Loss prevention - Research
|\ |\ |\ |\
Reasons of reinsuring: - CORRECT ANSWERS ✔✔1.)
|\ |\ |\ |\ |\ |\ |\
Increase the insurer's capacity to write business
|\ |\ |\ |\ |\ |\ |\
2.) Maintain a proper reserve
|\ |\ |\ |\ |\
3.) Reduce the effect of a catastrophic loss
|\ |\ |\ |\ |\ |\ |\
4.) Provide stability in a fluctuating market
|\ |\ |\ |\ |\ |\ |\
5.) Enable an insurer to cease operations
|\ |\ |\ |\ |\ |\
Steps of Rate Determination - CORRECT ANSWERS ✔✔1.)
|\ |\ |\ |\ |\ |\ |\ |\
Classification of risks - Broad categories work way down |\ |\ |\ |\ |\ |\ |\ |\ |\
2.) Gather statistics - Better for longer period
|\ |\ |\ |\ |\ |\ |\
, 3.) Determine the pure premium - Required to pay the
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
losses that occur |\ |\
4.) Determine Total premium Pure premium + trendsand
|\ |\ |\ |\ |\ |\ |\ |\
expense
5.) Determine rate per 100$
|\ |\ |\ |\
Things required for insurance contracts - CORRECT
|\ |\ |\ |\ |\ |\ |\
ANSWERS ✔✔1.) Insurable interest |\ |\ |\
2.) A risk of promise and indemnity
|\ |\ |\ |\ |\ |\ |\
3.) Utmost good faith
|\ |\ |\
Risk Management steps: - CORRECT ANSWERS
|\ |\ |\ |\ |\ |\
✔✔Identify: You would have to identify the risks. |\ |\ |\ |\ |\ |\ |\
Measure: Once you have found which risks pose a threat
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
you need to measure the loss frequency and severity.
|\ |\ |\ |\ |\ |\ |\ |\ |\
Control: The three ways of controlling risk are:
|\ |\ |\ |\ |\ |\ |\
Reduce
Assume |\
Transfer
|\ |\ |\ |\ |\ |\
EXAM WITH ANSWERS |\ |\
Areas of regulation for Intermediaries - CORRECT
|\ |\ |\ |\ |\ |\ |\
ANSWERS ✔✔Q-ualifaction (must pass test) |\ |\ |\ |\
O-peration of business (must follow requirements) |\ |\ |\ |\ |\
L- Icences - Must have license
|\ |\ |\ |\ |\
L- icence Renewal - Renewed annual
|\ |\ |\ |\ |\
The Categories of insurance: - CORRECT ANSWERS ✔✔1)
|\ |\ |\ |\ |\ |\ |\ |\
Social |\
-Workers Compensation |\ |\
2) Life and Health
|\ |\ |\ |\
Life, accident and sickness, and disability.
|\ |\ |\ |\ |\ |\
3) General property/casualty insurance
|\ |\ |\ |\
Personal Property |\
Boiler and Machinery |\ |\ |\
Automobile
Commercial property |\ |\
Crime |\
Business interruption |\ |\
Liability |\
,Aviation |\
Marine
Inland Transport |\
Main functions of insurance - CORRECT ANSWERS ✔✔1.)
|\ |\ |\ |\ |\ |\ |\ |\
Spread of risk - volume, diversity of risk, location
|\ |\ |\ |\ |\ |\ |\ |\
2.) Security - Peace of mind
|\ |\ |\ |\ |\
3.) Credit - Individuals, banks
|\ |\ |\ |\
4.) Capital - Premium investments
|\ |\ |\ |\ |\
5.) Employment - Insurance creates jobs
|\ |\ |\ |\ |\
6.) Loss prevention - Research
|\ |\ |\ |\
Reasons of reinsuring: - CORRECT ANSWERS ✔✔1.)
|\ |\ |\ |\ |\ |\ |\
Increase the insurer's capacity to write business
|\ |\ |\ |\ |\ |\ |\
2.) Maintain a proper reserve
|\ |\ |\ |\ |\
3.) Reduce the effect of a catastrophic loss
|\ |\ |\ |\ |\ |\ |\
4.) Provide stability in a fluctuating market
|\ |\ |\ |\ |\ |\ |\
5.) Enable an insurer to cease operations
|\ |\ |\ |\ |\ |\
Steps of Rate Determination - CORRECT ANSWERS ✔✔1.)
|\ |\ |\ |\ |\ |\ |\ |\
Classification of risks - Broad categories work way down |\ |\ |\ |\ |\ |\ |\ |\ |\
2.) Gather statistics - Better for longer period
|\ |\ |\ |\ |\ |\ |\
, 3.) Determine the pure premium - Required to pay the
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
losses that occur |\ |\
4.) Determine Total premium Pure premium + trendsand
|\ |\ |\ |\ |\ |\ |\ |\
expense
5.) Determine rate per 100$
|\ |\ |\ |\
Things required for insurance contracts - CORRECT
|\ |\ |\ |\ |\ |\ |\
ANSWERS ✔✔1.) Insurable interest |\ |\ |\
2.) A risk of promise and indemnity
|\ |\ |\ |\ |\ |\ |\
3.) Utmost good faith
|\ |\ |\
Risk Management steps: - CORRECT ANSWERS
|\ |\ |\ |\ |\ |\
✔✔Identify: You would have to identify the risks. |\ |\ |\ |\ |\ |\ |\
Measure: Once you have found which risks pose a threat
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
you need to measure the loss frequency and severity.
|\ |\ |\ |\ |\ |\ |\ |\ |\
Control: The three ways of controlling risk are:
|\ |\ |\ |\ |\ |\ |\
Reduce
Assume |\
Transfer
