KY PROPERTY & CASUALTY PRACTICE
REVIEW BANK 2026 EXPERT SOLUTIONS
PROVIDED
⫸ Managing Risk. Ans: STARR: Share, Transfer, Avoid, Reduce,
Retain
⫸ Purpose of Insurance. Ans: Transfer risk and responsibility in
exchange for payment of a premium
⫸ Law of Large Numbers. Ans: The more examples used to develop
any statistic, the more reliable that statistic will be.
⫸ Elements of Insurability. Ans: Insurable interest, definite risk of
loss, accidental risk, calculable loss, affordable cost to the insured,
predictable losses due to large number of persons with similar
potential loss available, loss must be spread
⫸ Parts of a Policy. Ans: Declarations, Insuring Agreements,
Conditions, Exclusions, Definitions
⫸ Declarations. Ans: Contain name, address, amount of coverage
provided, property description, cost of policy
,⫸ Insuring Agreements. Ans: Contains losses for which the insured
will be indemnified, type of property covered, perils against which the
property is insured
⫸ Conditions. Ans: "Ground rules" for the policy, responsibilities
and obligations of both the insurance company and the insured
⫸ Exclusions. Ans: Describes the losses for which the insured is not
covered.
⫸ Definitions. Ans: Clarifies the meanings of terms in the policy.
⫸ Policy Jacket/Skeleton Policy. Ans: Contains general conditions
and the Declarations
⫸ Reciprocal Company. Ans: Members insure each other and share
the losses with each other, managed by an attorney-in-fact
⫸ Lloyds Association. Ans: Made up of syndicates who voluntarily
agree to share in insurance contracts
⫸ Risk Retention Groups. Ans: Protects against product liability
exposures (ex. multimillion dollar lawsuits)
⫸ Self-Insurance. Ans: Part or all of the risk of loss is borne without
the benefit of insurance coverage to fall back on if a loss occurs
, ⫸ Residual Market Insurance. Ans: Government provides insurance
that is not readily available from private insurers. Federal: Flood, War
Risk, Nuclear Energy Liability, Federal Crop
State: Workers compensation, unemployment
⫸ Mono-Line Company. Ans: Writes only one kind of insurance
⫸ Multi-Line Company. Ans: An insurance company that writes
more than one line of insurance
⫸ Property Insurance. Ans: Covers risks that we will suffer financial
loss over because something we own is damaged or destroyed, first-
party coverage
⫸ Casualty Insurance. Ans: Covers risk that we will suffer financial
loss as a result of our actions towards others
⫸ Personal Lines. Ans: property-casualty coverages that protect an
individual or family
⫸ Commercial Lines. Ans: Coverages designed for businesses
⫸ Countersigning. Ans: The agent signs each new policy prepared
by the company before delivering it to the insured
REVIEW BANK 2026 EXPERT SOLUTIONS
PROVIDED
⫸ Managing Risk. Ans: STARR: Share, Transfer, Avoid, Reduce,
Retain
⫸ Purpose of Insurance. Ans: Transfer risk and responsibility in
exchange for payment of a premium
⫸ Law of Large Numbers. Ans: The more examples used to develop
any statistic, the more reliable that statistic will be.
⫸ Elements of Insurability. Ans: Insurable interest, definite risk of
loss, accidental risk, calculable loss, affordable cost to the insured,
predictable losses due to large number of persons with similar
potential loss available, loss must be spread
⫸ Parts of a Policy. Ans: Declarations, Insuring Agreements,
Conditions, Exclusions, Definitions
⫸ Declarations. Ans: Contain name, address, amount of coverage
provided, property description, cost of policy
,⫸ Insuring Agreements. Ans: Contains losses for which the insured
will be indemnified, type of property covered, perils against which the
property is insured
⫸ Conditions. Ans: "Ground rules" for the policy, responsibilities
and obligations of both the insurance company and the insured
⫸ Exclusions. Ans: Describes the losses for which the insured is not
covered.
⫸ Definitions. Ans: Clarifies the meanings of terms in the policy.
⫸ Policy Jacket/Skeleton Policy. Ans: Contains general conditions
and the Declarations
⫸ Reciprocal Company. Ans: Members insure each other and share
the losses with each other, managed by an attorney-in-fact
⫸ Lloyds Association. Ans: Made up of syndicates who voluntarily
agree to share in insurance contracts
⫸ Risk Retention Groups. Ans: Protects against product liability
exposures (ex. multimillion dollar lawsuits)
⫸ Self-Insurance. Ans: Part or all of the risk of loss is borne without
the benefit of insurance coverage to fall back on if a loss occurs
, ⫸ Residual Market Insurance. Ans: Government provides insurance
that is not readily available from private insurers. Federal: Flood, War
Risk, Nuclear Energy Liability, Federal Crop
State: Workers compensation, unemployment
⫸ Mono-Line Company. Ans: Writes only one kind of insurance
⫸ Multi-Line Company. Ans: An insurance company that writes
more than one line of insurance
⫸ Property Insurance. Ans: Covers risks that we will suffer financial
loss over because something we own is damaged or destroyed, first-
party coverage
⫸ Casualty Insurance. Ans: Covers risk that we will suffer financial
loss as a result of our actions towards others
⫸ Personal Lines. Ans: property-casualty coverages that protect an
individual or family
⫸ Commercial Lines. Ans: Coverages designed for businesses
⫸ Countersigning. Ans: The agent signs each new policy prepared
by the company before delivering it to the insured
