AINS 21 - Segment A | 137 Questions and Answers with complete solution

From a risk management viewpoint, insurance is used to A. Prevent the cost of losses B. Reduce the cost of losses C. Transfer the cost of losses D. Isolate the cost of losses. - C. Transfer the cost of losses. A loss exposure is: A. Any condition that presents the possibility of a loss. B. Any condition that precludes the chance of loss. C. The same thing as a peril. D. The same thing as a hazard. - A. Any condition that present the possibility of a loss. Some loss exposures are not easy to retain, avoid, or control. What risk management technique is frequently used to treat such exposures? A. Reinsurance B. Prevention C. Transfer D. Reunderwriting - C. Transfer Insurance is not the only risk management transfer technique. When circumstances are appropriate, transfer can be accomplished through A. Retention B. Noninsurance transfer techniques C. Avoidance D. Loss prevention - B. Noninsurance transfer techniques Another name for liability insurance is A. First-party insuranceB. Second-party insurance C. Third-party insurance D. Multiple-party insurance - C. Third party insurance