Exam FX P&C Questions With Complete Solutions

Judgement rating - Rating used by underwriters to rate one-of-a-kind risks. Schedule Rating - A rating plan that awards debits and credits based on specific categories, such as the care and condition of the premises or the training and selection of employees, to modify the final premium to reflect factors that the class rate does not include. expierence rating - insureds own past loss experience enters into the determination of the final premium Retrospective rating - A self-rating plan under which the actual losses during the policy period determine the final premium (subject to a minimum and maximum premium). Merit Rating - the insured's premium is based not on the actual loss record, but on other factors that indicate the probability that loss will occur Loss costs - method developed by ISO that provides an insurer with that portion of a rate that does not include provisions of expenses or profit and are based on historical aggregate loss and loss adjustment expenses projected through development to their ultimate value Components - factors that determine rates, including loss reserves, loss adjusting expenses, operating expenses and profits Named Peril - A specific cause of loss listed and described in an insurance policy. Also used to describe policies containing named perils. Open Peril - all perils except those specifically excluded. Negligence - The failure to exercise the standard of care that a reasonable person would exercise in similar circumstances. Tort - a wrongful act or an infringement of a right (other than under contract) leading to civil legal liability. Elements of Negligence - 1. Legal Duty 2. Standard of Care 3. Unbroken chain of events 4. actual loss or damage Comparative Negligence - A theory in tort law under which the liability for injuries resulting from negligent acts is shared by all parties who were negligent (including the injured party), on the basis of each person's proportionate negligence. Contributory Negligence - A legal defense that may be raised when the defendant feels that the conduct of the plaintiff somehow contributed to any injuries or damages that were sustained by the plaintiff. Blanket Insurance - A single property insurance policy that provides coverage for multiple classes of property at one location, or provides coverage for one or more classes of property at multiple locations. Fire Resistive - buildings constructed with masonry and/or other materials with a fire resistance rating of 2 hours or more. Fire-resistive usually receives the most favorable rating. Modified Fire-Restive - Buildings constructed with masonry and/or other materials with fire resistance rating between 1 hour and 2 hours Masonry Noncombustible - Buildings constructed with masonry or fire-resistive walls and noncombustible or slow-burning floors and roof. noncombustible - buildings constructed of noncombustible materials