C11 Principles and Practice of Insurance EXAM WITH ANSWERS.

C11 Principles and Practice of Insurance
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EXAM WITH ANSWERS |\ |\




Areas of regulation for Intermediaries - CORRECT
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ANSWERS ✔✔Q-ualifaction (must pass test) |\ |\ |\ |\




O-peration of business (must follow requirements) |\ |\ |\ |\ |\




L- Icences - Must have license
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L- icence Renewal - Renewed annual
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The Categories of insurance: - CORRECT ANSWERS ✔✔1)
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Social |\




-Workers Compensation |\ |\




2) Life and Health
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Life, accident and sickness, and disability.
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3) General property/casualty insurance
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Personal Property |\




Boiler and Machinery |\ |\ |\




Automobile
Commercial property |\ |\




Crime |\




Business interruption |\ |\




Liability |\

,Aviation |\




Marine
Inland Transport |\




Main functions of insurance - CORRECT ANSWERS ✔✔1.)
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Spread of risk - volume, diversity of risk, location
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2.) Security - Peace of mind
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3.) Credit - Individuals, banks
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4.) Capital - Premium investments
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5.) Employment - Insurance creates jobs
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6.) Loss prevention - Research
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Reasons of reinsuring: - CORRECT ANSWERS ✔✔1.)
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Increase the insurer's capacity to write business
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2.) Maintain a proper reserve
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3.) Reduce the effect of a catastrophic loss
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4.) Provide stability in a fluctuating market
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5.) Enable an insurer to cease operations
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Steps of Rate Determination - CORRECT ANSWERS ✔✔1.)
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Classification of risks - Broad categories work way down |\ |\ |\ |\ |\ |\ |\ |\ |\




2.) Gather statistics - Better for longer period
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, 3.) Determine the pure premium - Required to pay the
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losses that occur |\ |\




4.) Determine Total premium Pure premium + trendsand
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expense
5.) Determine rate per 100$
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Things required for insurance contracts - CORRECT
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ANSWERS ✔✔1.) Insurable interest |\ |\ |\




2.) A risk of promise and indemnity
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3.) Utmost good faith
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Risk Management steps: - CORRECT ANSWERS
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✔✔Identify: You would have to identify the risks. |\ |\ |\ |\ |\ |\ |\




Measure: Once you have found which risks pose a threat
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you need to measure the loss frequency and severity.
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Control: The three ways of controlling risk are:
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Reduce
Assume |\




Transfer