CPCU 551 REVIEW NOTES CHAPTER 1 EXAM QUESTIONS AND ANSWERS

CPCU 551 REVIEW NOTES CHAPTER 1
EXAM QUESTIONS AND ANSWERS
FOUR CATEGORIES OF LOSS EXPOSURES - -1. PROPERTY
2. LIABILITY
3. PERSONNEL
4. NET INCOME LOSS

- SIX STEP RISK MANAGEMENT PROCESS - -1. IDENTIFY LOSS EXPOSURE
2. ANALYZE LOSS EXPOSURE (likelihood)
3. EXAMINE FEASIBILITY OF TECHNIQUES (costs)
4. SELECT APPROPRIATE TECHNIQUES
5. IMPLEMENT TECHNIQUES
6. MONITOR RESULTS AND REVISE PROGRAM

- TWO CLASSIFICATIONS OF RISK MANAGEMENT TECHNIQUES - -1. RISK
CONTROL
2. RISK FINANCING

- SIX RISK CONTROL TECHNIQUES - -1. AVOIDANCE
2. LOSS PREVENTION
3. LOSS REDUCTION
4. SEPARATION
5. DUPLICATION
6. DIVERSIFICATION

- TWO RISK FINANCING TECHNIQUES - -1. RETENTION
2. TRANSFER (insurance and noninsurance)

- MULTILINE POLICY - -COVERS TWO OR MORE LINES OF BUSINESS

- MONOLINE POLICY - -COVERS ONLY ONE LINE OF BUSINESS

- ISO - -INSURANCE SERVICES OFFICE

- AAIS - -AMERICAN ASSOCIATION OF INSURANCE SERVICES

- STANDARD FORMS - -DEVELOPED BY INSURANCE ADVISORY
ORGANIZATIONS

- NONSTANDARD FORMS - -INSURERS' OR BROKERS' INDEPENDENTLY
DEVELOPED FORMS (manuscript forms)