ADB Insurance Comp Exam Questions
and Answers
Insurance - Answer-A contract providing protection against unforeseen events.
Risk - Answer-Chance of potential loss or uncertainty.
Pure Risk - Answer-Risk with only loss or no change possible.
Speculative Risk - Answer-Risk with potential for loss, gain, or no change.
Loss - Answer-Reduction in value affecting property or finances.
Exposure - Answer-Condition of being at risk for a loss.
Peril - Answer-Cause of a loss covered by insurance.
Hazard - Answer-Condition increasing likelihood of a loss.
,Physical Hazard - Answer-Visible condition increasing loss probability.
Moral Hazard - Answer-Dishonest behavior increasing loss likelihood.
Morale Hazard - Answer-Indifference toward risk increasing loss probability.
Risk Management - Answer-Analyzing and minimizing potential losses.
Risk Sharing - Answer-Pooling risk among multiple parties.
Risk Transfer - Answer-Shifting risk to another party via insurance.
Risk Avoidance - Answer-Eliminating risk by not engaging in activities.
Risk Reduction - Answer-Minimizing unavoidable risks through precautions.
Risk Retention - Answer-Assuming responsibility for potential losses.
Insurable Risks - Answer-Risks that meet specific criteria for insurance.
Law of Large Numbers - Answer-Predicts losses accurately with larger sample sizes.
Catastrophic Perils - Answer-Uninsurable events due to potential massive losses.
Statistical Calculability - Answer-Ability to predict loss likelihood accurately.
,Financial Hardship - Answer-Economic difficulty resulting from a loss.
Homogeneous Units - Answer-Similar units with comparable exposure to risk.
Accidental Loss - Answer-Loss occurring unexpectedly and unintentionally.
Measurable Loss - Answer-Loss that can be quantified in specific terms.
Insurance Policy - Answer-Contract detailing coverage and terms of insurance.
Deductibles - Answer-Amount retained by insured before insurance pays.
Rating Factors - Answer-Criteria like age and driving history for risk evaluation.
Adverse Selection - Answer-Higher risk individuals seek insurance more frequently.
Premium - Answer-Amount charged by insurers to cover risks.
Earthquake Coverage - Answer-Insurance for damages caused by earthquakes.
Reinsurance - Answer-Insurance purchased by insurers to spread risk.
Primary Insurer - Answer-Insurance company transferring risk to reinsurer.
, Reinsurer - Answer-Insurance company accepting risk from primary insurer.
Treaty Reinsurance - Answer-Automatic risk transfer for entire classes of risks.
Facultative Reinsurance - Answer-Negotiated coverage for individual risks between insurers.
Private Insurers - Answer-Non-governmental entities providing for-profit insurance.
Voluntary Market - Answer-Competitive insurance market where insurers choose clients.
Residual Markets - Answer-Last-resort coverage for high-risk individuals.
Joint Underwriting Association - Answer-Group providing coverage for high-risk applicants.
Government Insurers - Answer-Public entities providing insurance when private fails.
Stock Insurance Company - Answer-Owned by shareholders, issues nonparticipating policies.
Mutual Insurance Company - Answer-Owned by policyholders, issues participating policies.
Fraternal Benefit Societies - Answer-Nonprofit organizations providing life insurance to members.
Reciprocal Insurance Company - Answer-Group-owned insurer sharing risks among subscribers.
Dividends - Answer-Payments to policyholders from surplus profits.
and Answers
Insurance - Answer-A contract providing protection against unforeseen events.
Risk - Answer-Chance of potential loss or uncertainty.
Pure Risk - Answer-Risk with only loss or no change possible.
Speculative Risk - Answer-Risk with potential for loss, gain, or no change.
Loss - Answer-Reduction in value affecting property or finances.
Exposure - Answer-Condition of being at risk for a loss.
Peril - Answer-Cause of a loss covered by insurance.
Hazard - Answer-Condition increasing likelihood of a loss.
,Physical Hazard - Answer-Visible condition increasing loss probability.
Moral Hazard - Answer-Dishonest behavior increasing loss likelihood.
Morale Hazard - Answer-Indifference toward risk increasing loss probability.
Risk Management - Answer-Analyzing and minimizing potential losses.
Risk Sharing - Answer-Pooling risk among multiple parties.
Risk Transfer - Answer-Shifting risk to another party via insurance.
Risk Avoidance - Answer-Eliminating risk by not engaging in activities.
Risk Reduction - Answer-Minimizing unavoidable risks through precautions.
Risk Retention - Answer-Assuming responsibility for potential losses.
Insurable Risks - Answer-Risks that meet specific criteria for insurance.
Law of Large Numbers - Answer-Predicts losses accurately with larger sample sizes.
Catastrophic Perils - Answer-Uninsurable events due to potential massive losses.
Statistical Calculability - Answer-Ability to predict loss likelihood accurately.
,Financial Hardship - Answer-Economic difficulty resulting from a loss.
Homogeneous Units - Answer-Similar units with comparable exposure to risk.
Accidental Loss - Answer-Loss occurring unexpectedly and unintentionally.
Measurable Loss - Answer-Loss that can be quantified in specific terms.
Insurance Policy - Answer-Contract detailing coverage and terms of insurance.
Deductibles - Answer-Amount retained by insured before insurance pays.
Rating Factors - Answer-Criteria like age and driving history for risk evaluation.
Adverse Selection - Answer-Higher risk individuals seek insurance more frequently.
Premium - Answer-Amount charged by insurers to cover risks.
Earthquake Coverage - Answer-Insurance for damages caused by earthquakes.
Reinsurance - Answer-Insurance purchased by insurers to spread risk.
Primary Insurer - Answer-Insurance company transferring risk to reinsurer.
, Reinsurer - Answer-Insurance company accepting risk from primary insurer.
Treaty Reinsurance - Answer-Automatic risk transfer for entire classes of risks.
Facultative Reinsurance - Answer-Negotiated coverage for individual risks between insurers.
Private Insurers - Answer-Non-governmental entities providing for-profit insurance.
Voluntary Market - Answer-Competitive insurance market where insurers choose clients.
Residual Markets - Answer-Last-resort coverage for high-risk individuals.
Joint Underwriting Association - Answer-Group providing coverage for high-risk applicants.
Government Insurers - Answer-Public entities providing insurance when private fails.
Stock Insurance Company - Answer-Owned by shareholders, issues nonparticipating policies.
Mutual Insurance Company - Answer-Owned by policyholders, issues participating policies.
Fraternal Benefit Societies - Answer-Nonprofit organizations providing life insurance to members.
Reciprocal Insurance Company - Answer-Group-owned insurer sharing risks among subscribers.
Dividends - Answer-Payments to policyholders from surplus profits.
