C11 - Principles & Practice
What are the 3 general types of risk? - CORRECT ANSWER-PeoPLe are risk!
Personal, Property, Liability
What does "insurance" mean? - CORRECT ANSWER-When something gets
cRuMPLEd, Indemnify! Indemnification, Risk, Money, Perils, Loss, Exposure
How does insurance provide security? - CORRECT ANSWER-It WIIPs risks
***********! Worries, Inconvenience, Indemnification, Premiums
What do risk managers do? - CORRECT ANSWER-They eat kIMChi! Identify,
Measure, Control
How does the insurance industry contribute to loss prevention? - CORRECT
ANSWER-It DiPs to RId us of RiSk of Fire by Fighting and Reducing it and GeLs
governments on Buildings and Autos then even lowers Crime! Decreased
Premiums, Reduced Inconvenience, Reduced Suffering, Fire, Fire Houses,
Recommendations, Government Lobby, Building Standards, Automobile Industry,
Crime
As an adjuster, what do you think people need to know to understand the
benefits of insurance? - CORRECT ANSWER-It provides SECurity and exCITes
Job creation and Loss Prevention! Security, Easy payments, Credit, Capital,
Investment, Taxes, Jobs, Loss Prevention
Define "Rate." - CORRECT ANSWER-1. -ppu/yr of insurance
2. -either as a percentage or monetary value
Define "Premium." - CORRECT ANSWER-1. -total cost of an insurance policy
2. -calculated as "rate" X "amount insured"
Define "Law of large numbers." - CORRECT ANSWER-1.-principle that certainty
of probability increases with an increase of statistical data
2. It's used to determine premiums
3. and also know as the law of averages.
, Define "Theory of probability." - CORRECT ANSWER-1. -theory that historical
data can be used to determine future probability
2. It's expressed as a ratio of actual/possible occurrences.
What is chance and its relationship to insurance? - CORRECT ANSWER-With it,
we can FuND the CaP! Fraction, Numerator, Denominator, Chance definition,
Probability
What are the three main factors to ratemaking? - CORRECT ANSWER-CRuST!
Conditions Relative, Size, Time Period
Describe "Ratemaking" as a process. - CORRECT ANSWER-Come THe &
Gather a FAST 2 PPs for the fIREPOT Rate!
1. Classify risk by Type and Hazards
2. Gather statistics to determine Frequency & Average by considering Size and
Time Period.
3. 2PPs - determine pure Premium
4. determine total Premium by loading with Inflation, Repair Costs, Expenses,
Profit, Overhead, Trends
5. determine Rate
Describe "Underwriting" as a process. - CORRECT ANSWER-RESTARRT the
AMPErE CoCoAS!
1. Receive the request.
2. Examine and Select the risks by considering the Applicant, Moral hazard,
Physical hazard, risk Exposure, amount of Exposure.
3. possibly ask for Technical support to rate and/or recommend.
4. Assess the risk to either improve safety or adjust premium.
5. Reject the risk due to Class, Certainty of loss, Applicant, Sub-standards.
6. ReTain a certain amount of the risk.
What does OSFI stand for? - CORRECT ANSWER-Office of the Superintendent
of Financial Institutions
Concerning insurance companies, what is the mandate of the OSFI? -
CORRECT ANSWER-RuFFEIE P!
What are the 3 general types of risk? - CORRECT ANSWER-PeoPLe are risk!
Personal, Property, Liability
What does "insurance" mean? - CORRECT ANSWER-When something gets
cRuMPLEd, Indemnify! Indemnification, Risk, Money, Perils, Loss, Exposure
How does insurance provide security? - CORRECT ANSWER-It WIIPs risks
***********! Worries, Inconvenience, Indemnification, Premiums
What do risk managers do? - CORRECT ANSWER-They eat kIMChi! Identify,
Measure, Control
How does the insurance industry contribute to loss prevention? - CORRECT
ANSWER-It DiPs to RId us of RiSk of Fire by Fighting and Reducing it and GeLs
governments on Buildings and Autos then even lowers Crime! Decreased
Premiums, Reduced Inconvenience, Reduced Suffering, Fire, Fire Houses,
Recommendations, Government Lobby, Building Standards, Automobile Industry,
Crime
As an adjuster, what do you think people need to know to understand the
benefits of insurance? - CORRECT ANSWER-It provides SECurity and exCITes
Job creation and Loss Prevention! Security, Easy payments, Credit, Capital,
Investment, Taxes, Jobs, Loss Prevention
Define "Rate." - CORRECT ANSWER-1. -ppu/yr of insurance
2. -either as a percentage or monetary value
Define "Premium." - CORRECT ANSWER-1. -total cost of an insurance policy
2. -calculated as "rate" X "amount insured"
Define "Law of large numbers." - CORRECT ANSWER-1.-principle that certainty
of probability increases with an increase of statistical data
2. It's used to determine premiums
3. and also know as the law of averages.
, Define "Theory of probability." - CORRECT ANSWER-1. -theory that historical
data can be used to determine future probability
2. It's expressed as a ratio of actual/possible occurrences.
What is chance and its relationship to insurance? - CORRECT ANSWER-With it,
we can FuND the CaP! Fraction, Numerator, Denominator, Chance definition,
Probability
What are the three main factors to ratemaking? - CORRECT ANSWER-CRuST!
Conditions Relative, Size, Time Period
Describe "Ratemaking" as a process. - CORRECT ANSWER-Come THe &
Gather a FAST 2 PPs for the fIREPOT Rate!
1. Classify risk by Type and Hazards
2. Gather statistics to determine Frequency & Average by considering Size and
Time Period.
3. 2PPs - determine pure Premium
4. determine total Premium by loading with Inflation, Repair Costs, Expenses,
Profit, Overhead, Trends
5. determine Rate
Describe "Underwriting" as a process. - CORRECT ANSWER-RESTARRT the
AMPErE CoCoAS!
1. Receive the request.
2. Examine and Select the risks by considering the Applicant, Moral hazard,
Physical hazard, risk Exposure, amount of Exposure.
3. possibly ask for Technical support to rate and/or recommend.
4. Assess the risk to either improve safety or adjust premium.
5. Reject the risk due to Class, Certainty of loss, Applicant, Sub-standards.
6. ReTain a certain amount of the risk.
What does OSFI stand for? - CORRECT ANSWER-Office of the Superintendent
of Financial Institutions
Concerning insurance companies, what is the mandate of the OSFI? -
CORRECT ANSWER-RuFFEIE P!
