RMIN 4000 Test 2 UGA Marc Ragin with Complete Solutions
Gross Premium - ANSWER-Total premium charged per unit of coverage
Risk Charge - ANSWER-Estimation of risk of the insurer. 3* SD/ per person
Admin Costs - ANSWER-Money spent in daily operations of company. Ex. Salaries, overhead, marketing
Expected Loss - ANSWER-Expected frequency * expected severity
Fortuitous - ANSWER-Random, accidental, no control over E(F)/E(S)
Underwriting - ANSWER-process of classifying a risk
Risk based pricing - ANSWER-Higher the risk you are, the more the insurer will charge you
Determinable loss - ANSWER-easy to verify that a loss occurred
Measurable loss - ANSWER-easy to assign a $ value to a loss
Adverse Selection - ANSWER-High risks most likely to buy coverage, at the lowest price
Asymmetric info - ANSWER-insured has more info about their risk and are unwilling to give up that info
Principle of Indemnity - ANSWER-The insurer agrees to pay no more than the actual amount of the loss
Principle of Insurable Interest - ANSWER-The insured must be in a position to lose financially if a covered loss occurs
Principle of subrogation - ANSWER-insurer can go after a responsible 3rd party to collect claim payments made to their insured
Principle of Utmost good faith - ANSWER-Parties to an insurance contract are held to a higher standard of honesty than parties to non-insurance contracts
Representation - ANSWER-a statement made by the applicant
Gross Premium - ANSWER-Total premium charged per unit of coverage
Risk Charge - ANSWER-Estimation of risk of the insurer. 3* SD/ per person
Admin Costs - ANSWER-Money spent in daily operations of company. Ex. Salaries, overhead, marketing
Expected Loss - ANSWER-Expected frequency * expected severity
Fortuitous - ANSWER-Random, accidental, no control over E(F)/E(S)
Underwriting - ANSWER-process of classifying a risk
Risk based pricing - ANSWER-Higher the risk you are, the more the insurer will charge you
Determinable loss - ANSWER-easy to verify that a loss occurred
Measurable loss - ANSWER-easy to assign a $ value to a loss
Adverse Selection - ANSWER-High risks most likely to buy coverage, at the lowest price
Asymmetric info - ANSWER-insured has more info about their risk and are unwilling to give up that info
Principle of Indemnity - ANSWER-The insurer agrees to pay no more than the actual amount of the loss
Principle of Insurable Interest - ANSWER-The insured must be in a position to lose financially if a covered loss occurs
Principle of subrogation - ANSWER-insurer can go after a responsible 3rd party to collect claim payments made to their insured
Principle of Utmost good faith - ANSWER-Parties to an insurance contract are held to a higher standard of honesty than parties to non-insurance contracts
Representation - ANSWER-a statement made by the applicant
