Fundamentals of Insurance (BC) - Self-
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Terms in this set (180)
problems. The problems may require students to apply formulas, solve equations, or prove mathematical theorems.Theoretical Questions: In higher-level mathematics exams,
students may be asked to demonstrate their understanding of theoretical concepts, such as the proof and students are expected to demonstrate their ability to apply logic to prove
statements or solve problems. This is especially important in subjects like proof-based mathematics.Calculatio
What is the major function of To allow the spread of risk.
insurance?
Define "Spread of Risk" "The losses of the few are shared among the many"
What are the 4 other functions of 1. Basis of Credit System
insurance? 2. Eliminates worry - Encourages Entrepreneurship
3. Loss Prevention and Loss Reduction
4. Source of Employment and Investment Capital
What are the 3 types of property and 1. Automobile
casuality (general) insurance? 2. Property
3. Liability
What are the 2 types of insurer 1. Private Insurers
organizations? (including the 2 - Stock Companies
subtypes) - Mutual Companies
2. Government Insurers
How do stock companies work? The money to operate a stock company may come
from private funds or via a public sale of stock.
Ownership rests in the hand's of the company's
shareholders whose main purpose is to derive
profit from their investment.
, How do mutual companies work? A mutual company is a corporation owned by its
policy holders. The creation of profit is not a
primary incentive. Instead, the main goal is to
provide policyholders with insurance at as low a
cost as possible. When the company makes money
it's refunded to the policy holders via dividends or
rate adjustments.
Which insurance are government Federal and provincial governments are involved in
insurers most involved in? medical insurance, employment insurance and
workers' compensation.
In BC, Saskatchewan, Manitoba and Quebec the
government provides compulsory auto insurance.
What are 2 ways insurers use to sell 1. Direct Writing System
their products? 2. Independent Brokerage System
How does the Direct Writing System - In the direct writing system, the producers are
work? employees of the insurer and are limited to selling
only products of the insurer.
- Remuneration may be via salary or commission
basis or a combination
- Insurer owns all business and performs
administrative functions
- Examples of direct writers include: Belair, RBC
Insurance, and Desjardin
problems. The problems may require students to apply formulas, solve equations, or prove mathematical theorems.Theoretical Questions: In
higher-level mathematics exams, students may be asked to demonstrate their understanding of theoretical concepts, such as the proof and students are expected to
demonstrate their ability to apply logic to prove statements or solve problems. This is especially important in subjects like proof-based mathematics.Calculatio
, How does the Independent - Brokerage owners are NOT employees of insurers
Brokerage System work? and in most cases choose to represent more than 1
insurance company as well as the facility
association.
- The brokerage owns the business it produces and
is responsible for providing policyholders with
several client services.
- The brokerage is paid a commission by the insurer
on all the business it writes which is then used to
pay salaries, rent, postage and other operating
expenses.
How does the agency system work? - Agents are distinct from brokers and direct
writers as they are small business owners.
- Like direct writers, they represent 1 insurer and the
Facility Association.
- Agents are paid commission and bonuses for the
business they sell and the agents themselves have
ownership in their book of business.
- Examples of agent companies are Desjardin and
Cooperators General Insurance Company.
Define Risk. Risk is "the chance of financial loss to which the
object of insurance may be exposed"
Define Peril. Peril is simply defined as "the cause of loss"
- Examples can include and are not limited to: fire,
wind, hail, etc.
Of the 2 distribution methods, which The majority of insurance business in Canada is
is most common? transacted by private insurers.
problems. The problems may require students to apply formulas, solve equations, or prove mathematical theorems.Theoretical Questions: In
higher-level mathematics exams, students may be asked to demonstrate their understanding of theoretical concepts, such as the proof and students are expected to
demonstrate their ability to apply logic to prove statements or solve problems. This is especially important in subjects like proof-based mathematics.Calculatio
Examination Chapter Questions & Answers | 100%
Verified solutions |Questions with Correct
Answers 2026 latest update!!
Save
Terms in this set (180)
problems. The problems may require students to apply formulas, solve equations, or prove mathematical theorems.Theoretical Questions: In higher-level mathematics exams,
students may be asked to demonstrate their understanding of theoretical concepts, such as the proof and students are expected to demonstrate their ability to apply logic to prove
statements or solve problems. This is especially important in subjects like proof-based mathematics.Calculatio
What is the major function of To allow the spread of risk.
insurance?
Define "Spread of Risk" "The losses of the few are shared among the many"
What are the 4 other functions of 1. Basis of Credit System
insurance? 2. Eliminates worry - Encourages Entrepreneurship
3. Loss Prevention and Loss Reduction
4. Source of Employment and Investment Capital
What are the 3 types of property and 1. Automobile
casuality (general) insurance? 2. Property
3. Liability
What are the 2 types of insurer 1. Private Insurers
organizations? (including the 2 - Stock Companies
subtypes) - Mutual Companies
2. Government Insurers
How do stock companies work? The money to operate a stock company may come
from private funds or via a public sale of stock.
Ownership rests in the hand's of the company's
shareholders whose main purpose is to derive
profit from their investment.
, How do mutual companies work? A mutual company is a corporation owned by its
policy holders. The creation of profit is not a
primary incentive. Instead, the main goal is to
provide policyholders with insurance at as low a
cost as possible. When the company makes money
it's refunded to the policy holders via dividends or
rate adjustments.
Which insurance are government Federal and provincial governments are involved in
insurers most involved in? medical insurance, employment insurance and
workers' compensation.
In BC, Saskatchewan, Manitoba and Quebec the
government provides compulsory auto insurance.
What are 2 ways insurers use to sell 1. Direct Writing System
their products? 2. Independent Brokerage System
How does the Direct Writing System - In the direct writing system, the producers are
work? employees of the insurer and are limited to selling
only products of the insurer.
- Remuneration may be via salary or commission
basis or a combination
- Insurer owns all business and performs
administrative functions
- Examples of direct writers include: Belair, RBC
Insurance, and Desjardin
problems. The problems may require students to apply formulas, solve equations, or prove mathematical theorems.Theoretical Questions: In
higher-level mathematics exams, students may be asked to demonstrate their understanding of theoretical concepts, such as the proof and students are expected to
demonstrate their ability to apply logic to prove statements or solve problems. This is especially important in subjects like proof-based mathematics.Calculatio
, How does the Independent - Brokerage owners are NOT employees of insurers
Brokerage System work? and in most cases choose to represent more than 1
insurance company as well as the facility
association.
- The brokerage owns the business it produces and
is responsible for providing policyholders with
several client services.
- The brokerage is paid a commission by the insurer
on all the business it writes which is then used to
pay salaries, rent, postage and other operating
expenses.
How does the agency system work? - Agents are distinct from brokers and direct
writers as they are small business owners.
- Like direct writers, they represent 1 insurer and the
Facility Association.
- Agents are paid commission and bonuses for the
business they sell and the agents themselves have
ownership in their book of business.
- Examples of agent companies are Desjardin and
Cooperators General Insurance Company.
Define Risk. Risk is "the chance of financial loss to which the
object of insurance may be exposed"
Define Peril. Peril is simply defined as "the cause of loss"
- Examples can include and are not limited to: fire,
wind, hail, etc.
Of the 2 distribution methods, which The majority of insurance business in Canada is
is most common? transacted by private insurers.
problems. The problems may require students to apply formulas, solve equations, or prove mathematical theorems.Theoretical Questions: In
higher-level mathematics exams, students may be asked to demonstrate their understanding of theoretical concepts, such as the proof and students are expected to
demonstrate their ability to apply logic to prove statements or solve problems. This is especially important in subjects like proof-based mathematics.Calculatio
