1 Exampromax - Stuvia US
Virginia Life, Health and Annuities Exam
Questions and Answers 100% Correct Answers
Already Graded A+
Q: Insurance
Ans: transfer of risk
Q: RIsk
Ans: uncertainty/possibility of a loss
Exampromax - Stuvia US
Q: Two types of risk
Ans: Pure and Speculative
Q: Speculative Risk
Ans: chance of loss or gain; not insurable
Q: Pure Risk
Ans: chance of loss only; can be insured
Q: Exposure
Ans: risks for which the insurance company would be liable
Q: Peril
Ans: cause of loss
Q: Hazard (there are 3 types)
Ans: something that causes an increase in the chance of loss
Q: Physical Hazard
, 2 Exampromax - Stuvia US
Ans: the hazard can be seen
Q: Moral Hazard
Ans: a belief that intentionally causing a loss is acceptable
Q: Morale Hazard
Ans: carelessness
Q: Methods of Handling Risk (STARR)
Ans: Sharing, Transfer, Avoidance, Reduction, Retention
Q: Contract (policy)
Exampromax - Stuvia US
Ans: an agreement between the insured and the insurer
Q: 1st party
Ans: Insured (customer)
Q: 2nd party
Ans: insurer, insurance company
Q: Law of Large Numbers
Ans: larger the group; the more accurate losses can be predicted
Q: Characteristics of risks that can be insured (CANHAM)
Ans: Calculable, affordable, non-catastrophic, homogeneous, accidental,
measurable
Q: Adverse Selection
Ans: risks that have a greater than average chance of loss
Q: Reinsurance
, 3 Exampromax - Stuvia US
Ans: an insurance company (the ceding company) paying another insurance
company (reinsurer) to take some of the companies risk of catastrophic loss
Q: Facultative
Ans: the reinsurer evaluates each risk before allowing the transfer
Q: Treaty
Ans: the reinsurer accepts the transfer according to an agreement called a treaty
Q: Stock Insurer
Ans: - publically owned by stockholders/shareholders
- if the company makes money, a taxable dividend from the profits may be paid to
the stockholders/shareholders
- issues non-par policies
Exampromax - Stuvia US
Q: Mutual Insurer
Ans: -Owned by the policyholders (customers)
-If the company is profitable, can return excess premium to its policyholders--
nontaxable dividend
-Issues participating policies.
Q: Fraternal Insurer
Ans: -provides insurance and other benefits
-must be a member of the society to get the benefits
Q: Reciprocal Insurer
Ans: -unincorporated
-members are assessed the amount they have to pay if a loss to any member of the
group occurs
-run by an attorney-in-fact
Q: Lloyd's Association
Ans: insurance provided by individual underwriters not companies
Q: Risk Retention Group
Virginia Life, Health and Annuities Exam
Questions and Answers 100% Correct Answers
Already Graded A+
Q: Insurance
Ans: transfer of risk
Q: RIsk
Ans: uncertainty/possibility of a loss
Exampromax - Stuvia US
Q: Two types of risk
Ans: Pure and Speculative
Q: Speculative Risk
Ans: chance of loss or gain; not insurable
Q: Pure Risk
Ans: chance of loss only; can be insured
Q: Exposure
Ans: risks for which the insurance company would be liable
Q: Peril
Ans: cause of loss
Q: Hazard (there are 3 types)
Ans: something that causes an increase in the chance of loss
Q: Physical Hazard
, 2 Exampromax - Stuvia US
Ans: the hazard can be seen
Q: Moral Hazard
Ans: a belief that intentionally causing a loss is acceptable
Q: Morale Hazard
Ans: carelessness
Q: Methods of Handling Risk (STARR)
Ans: Sharing, Transfer, Avoidance, Reduction, Retention
Q: Contract (policy)
Exampromax - Stuvia US
Ans: an agreement between the insured and the insurer
Q: 1st party
Ans: Insured (customer)
Q: 2nd party
Ans: insurer, insurance company
Q: Law of Large Numbers
Ans: larger the group; the more accurate losses can be predicted
Q: Characteristics of risks that can be insured (CANHAM)
Ans: Calculable, affordable, non-catastrophic, homogeneous, accidental,
measurable
Q: Adverse Selection
Ans: risks that have a greater than average chance of loss
Q: Reinsurance
, 3 Exampromax - Stuvia US
Ans: an insurance company (the ceding company) paying another insurance
company (reinsurer) to take some of the companies risk of catastrophic loss
Q: Facultative
Ans: the reinsurer evaluates each risk before allowing the transfer
Q: Treaty
Ans: the reinsurer accepts the transfer according to an agreement called a treaty
Q: Stock Insurer
Ans: - publically owned by stockholders/shareholders
- if the company makes money, a taxable dividend from the profits may be paid to
the stockholders/shareholders
- issues non-par policies
Exampromax - Stuvia US
Q: Mutual Insurer
Ans: -Owned by the policyholders (customers)
-If the company is profitable, can return excess premium to its policyholders--
nontaxable dividend
-Issues participating policies.
Q: Fraternal Insurer
Ans: -provides insurance and other benefits
-must be a member of the society to get the benefits
Q: Reciprocal Insurer
Ans: -unincorporated
-members are assessed the amount they have to pay if a loss to any member of the
group occurs
-run by an attorney-in-fact
Q: Lloyd's Association
Ans: insurance provided by individual underwriters not companies
Q: Risk Retention Group
