XCEL CHAPTER 2 EXAM 2025
QUESTIONS AND ANSWERS
An insurer has a contractual agreement which transfers a portion of its risk exposure to another
insurer. What type of contractual arrangement is this? - ANS reinsurance contract
the law of large numbers enables an insurer to - ANS predict losses
which term describes the elimination of a hazard - ANS risk avoidance
risk _________ is the process of analyzing exposures that create risk and designing programs to
handle them - ANS management
which of the following describes the act of insuring a risk against a possible loss? - ANS risk
transfer
a hold harmless clause is an example of risk - ANS transfer
which one of these is not considered to be an element of an insurable risk? - ANS speculative
risk
purchasing insurance is an example of risk - ANS transference
which of these statements regarding insurance is false? - ANS as the number of insured units
increases, the number of losses decreases
1 @COPYRIGHT THEBRIGHT 2025/2026
QUESTIONS AND ANSWERS
An insurer has a contractual agreement which transfers a portion of its risk exposure to another
insurer. What type of contractual arrangement is this? - ANS reinsurance contract
the law of large numbers enables an insurer to - ANS predict losses
which term describes the elimination of a hazard - ANS risk avoidance
risk _________ is the process of analyzing exposures that create risk and designing programs to
handle them - ANS management
which of the following describes the act of insuring a risk against a possible loss? - ANS risk
transfer
a hold harmless clause is an example of risk - ANS transfer
which one of these is not considered to be an element of an insurable risk? - ANS speculative
risk
purchasing insurance is an example of risk - ANS transference
which of these statements regarding insurance is false? - ANS as the number of insured units
increases, the number of losses decreases
1 @COPYRIGHT THEBRIGHT 2025/2026
