ETHICS 311: ETHICAL DECISION MAKING IN RISK AND INSURANCE
EXAM – QUESTIONS AND ANSWERS | VERIFIED AND WELL
DETAILED ANSWERS | PLUS RATIONALES MUST BE IN ITALICS|
GUARANTEED PASS | LATEST EXAM UPDATE
1. Which ethical principle emphasizes acting for the benefit of others?
A. Autonomy
B. Beneficence
C. Relativism
D. Egoism
Correct Answer: B. Beneficence
Rationale: Beneficence requires individuals and organizations to act in ways that promote the welfare
of others.
2. What is the primary purpose of ethics in risk and insurance?
A. Maximizing profits only
B. Avoiding regulation
C. Guiding morally responsible decisions
D. Reducing paperwork
Correct Answer: C. Guiding morally responsible decisions
Rationale: Ethics provides standards that help professionals make responsible and fair decisions.
3. Which stakeholder is most directly affected by an insurer’s claim decision?
A. Competitors
B. Government agencies
C. Policyholder
D. Shareholders only
Correct Answer: C. Policyholder
Rationale: Claim decisions directly affect policyholders seeking benefits under their contracts.
4. Utilitarianism evaluates actions based on:
A. Intentions only
B. Religious beliefs
C. Consequences and overall happiness
D. Personal preferences
Correct Answer: C. Consequences and overall happiness
Rationale: Utilitarian ethics focuses on maximizing overall good and minimizing harm.
5. A conflict of interest occurs when:
A. Rules are followed
B. Personal interests interfere with professional duties
C. Premiums increase
D. Claims decrease
, Correct Answer: B. Personal interests interfere with professional duties
Rationale: Conflicts of interest threaten impartial and ethical decision-making.
6. Which ethical theory focuses on duties and obligations?
A. Virtue Ethics
B. Utilitarianism
C. Deontology
D. Relativism
Correct Answer: C. Deontology
Rationale: Deontological ethics emphasizes adherence to moral duties and rules.
7. Good faith in insurance requires:
A. Concealing material facts
B. Fair dealing and honesty
C. Avoiding disclosures
D. Maximizing commissions
Correct Answer: B. Fair dealing and honesty
Rationale: Insurance contracts rely heavily on honesty and full disclosure.
8. What is a material misrepresentation?
A. An irrelevant statement
B. A harmless mistake
C. False information affecting underwriting decisions
D. A premium payment
Correct Answer: C. False information affecting underwriting decisions
Rationale: Material facts influence risk assessment and policy issuance.
9. Ethical leadership promotes:
A. Transparency
B. Corruption
C. Favoritism
D. Secrecy
Correct Answer: A. Transparency
Rationale: Ethical leaders encourage openness, accountability, and trust.
10. Corporate social responsibility involves:
A. Ignoring community concerns
B. Ethical obligations beyond profits
C. Avoiding compliance
D. Eliminating stakeholder engagement
Correct Answer: B. Ethical obligations beyond profits
Rationale: CSR recognizes responsibilities to society, customers, employees, and communities.
EXAM – QUESTIONS AND ANSWERS | VERIFIED AND WELL
DETAILED ANSWERS | PLUS RATIONALES MUST BE IN ITALICS|
GUARANTEED PASS | LATEST EXAM UPDATE
1. Which ethical principle emphasizes acting for the benefit of others?
A. Autonomy
B. Beneficence
C. Relativism
D. Egoism
Correct Answer: B. Beneficence
Rationale: Beneficence requires individuals and organizations to act in ways that promote the welfare
of others.
2. What is the primary purpose of ethics in risk and insurance?
A. Maximizing profits only
B. Avoiding regulation
C. Guiding morally responsible decisions
D. Reducing paperwork
Correct Answer: C. Guiding morally responsible decisions
Rationale: Ethics provides standards that help professionals make responsible and fair decisions.
3. Which stakeholder is most directly affected by an insurer’s claim decision?
A. Competitors
B. Government agencies
C. Policyholder
D. Shareholders only
Correct Answer: C. Policyholder
Rationale: Claim decisions directly affect policyholders seeking benefits under their contracts.
4. Utilitarianism evaluates actions based on:
A. Intentions only
B. Religious beliefs
C. Consequences and overall happiness
D. Personal preferences
Correct Answer: C. Consequences and overall happiness
Rationale: Utilitarian ethics focuses on maximizing overall good and minimizing harm.
5. A conflict of interest occurs when:
A. Rules are followed
B. Personal interests interfere with professional duties
C. Premiums increase
D. Claims decrease
, Correct Answer: B. Personal interests interfere with professional duties
Rationale: Conflicts of interest threaten impartial and ethical decision-making.
6. Which ethical theory focuses on duties and obligations?
A. Virtue Ethics
B. Utilitarianism
C. Deontology
D. Relativism
Correct Answer: C. Deontology
Rationale: Deontological ethics emphasizes adherence to moral duties and rules.
7. Good faith in insurance requires:
A. Concealing material facts
B. Fair dealing and honesty
C. Avoiding disclosures
D. Maximizing commissions
Correct Answer: B. Fair dealing and honesty
Rationale: Insurance contracts rely heavily on honesty and full disclosure.
8. What is a material misrepresentation?
A. An irrelevant statement
B. A harmless mistake
C. False information affecting underwriting decisions
D. A premium payment
Correct Answer: C. False information affecting underwriting decisions
Rationale: Material facts influence risk assessment and policy issuance.
9. Ethical leadership promotes:
A. Transparency
B. Corruption
C. Favoritism
D. Secrecy
Correct Answer: A. Transparency
Rationale: Ethical leaders encourage openness, accountability, and trust.
10. Corporate social responsibility involves:
A. Ignoring community concerns
B. Ethical obligations beyond profits
C. Avoiding compliance
D. Eliminating stakeholder engagement
Correct Answer: B. Ethical obligations beyond profits
Rationale: CSR recognizes responsibilities to society, customers, employees, and communities.
