AINS 21 Segment C Exam Questions And Answers Already Graded A+

traditional RM vs ERM - traditional - pure risk; manage safety, buy ins, control financial recovery ERM - pure and speculative risk; corporate level; all types of risks ***max organization's value individuals & families vs organizations - individuals & families - informal series of efforts; part of financial planning process; don't follow process organizations - in smaller, task carried out by owner or senior manager; in larger, part of formalized program with department identify loss exposures - -developing list of accidental losses -must understand how house/org operates -physical inspection, look at financial statements, loss history analyze loss exposures - -how large a loss could be and how often it might occur -looking at frequency and severity examine feasibility of RM techniques - RISK CONTROL -avoidance - probability of loss is 0 -loss prevention - lowers frequency; keeping doors locked, vehicle maintenance program -loss reduction - lowers severity; sprinkler system, money safes that clerk can't open -separation - isolates loss exposures to minimize effect of single loss -duplication - using backups/spares RISK FINANCING -retention - accepting costs, can be intentional or unintentional/partial or total; less expensive than ins in long run -transfer - insurance or noninsurance select appropriate RM technique - -based on financial criteria and informal guidelines**don't retain more than you can afford to lose, don't retain large exposures just to save a little premium, don't spend a lot of money for a little protection, ins is not substitute for risk control INSURE LOW FREQUENCY HIGH SEVERITY RETAIN/RISK CONTROL HIGH FREQUENCY LOW SEVERITY implement and monitor - implement - what should be done, who should be responsible, how to communicate RM info, how to allocate costs of RM program monitor - ongoing activity because needs change over time; actually a return to the first step RM benefits to businesses - -access to affordable coverage bc insurers are more receptive to orgs that practice good RM -increases opportunity -leads to achievement of goals in cost effective matter RM benefits to individuals/families - -cope more effectively with financial disasters -greater peace of mind -take more chances on aggressive decisions on ventures with potential for profit RM benefits to society - -reduce # of persons dependent on society for support -fewer disruptions in economic and social environment -simulate economic growth RM benefits to insurers - -positive effect on UW results -consumers who purchase are generally more knowledgeable -simulates them to create innovative products and maintain competitive prices and services fixture - personal property affixed to real property in such a way that it becomes part of the real property -boilers and machinerysecurities - written instruments representing either money or property, such as stocks or bonds mobile equipment - types of vehicles designed for use principally off public roads, such as bulldozers and cranes recreational vehicle - vehicle used for sports and rec, such as dune buggy and dirt bike peril - cause of loss mortgagee - LENDER, such as bank or financial institution mortgagor - person that borrows money to finance purchase of real property bailee - party temporarily possessing the personal property in a bailment -dry cleaner, repair shop, etc 3 elements of property/liability/personnel/net income loss exposures - 1. assets exposed to loss 2. cause of loss 3. financial consequences