RIBO Exam
What is Insurance? - ANS-The undertaking by one person to indemnify another person
against loss or liability for loss in respect of a certain risk or peril to which the object of
insurance may be exposed.
OR
To pay a sum of money or another thing of value upon the happening of a specific
event.
What does Indemnify mean? - ANS-To compensate the victim of a loss, in whole or in
part, by payment, repair, or replacement.
OR
An insurer must make good the amount of the insured's financial loss - no more and no
less.
What is Risk? - ANS-The chance of loss.
OR
The object of insurance.
What is Pure Risk? - ANS-A chance of a loss, but no chance of profit.
What is Speculative Risk? - ANS-A chance of loss or profit.
What are the Three Categories of Risk? - ANS-Personal Risk;
Property Risk;
Liability Risk.
What are the Four Methods of Handling Risk? - ANS-Avoid the Risk;
Control the Risk;
Retention of Risk;
Transfer of Risk.
,What is a Hazard? - ANS-The condition which may cause a peril to occur or make a
loss more severe.
What are the Three Types of Hazards? - ANS-Physical;
Moral;
Morale.
What is a Peril? - ANS-The cause of the loss.
OR
An event which may cause a loss to occur.
Risk is? - ANS-The chance of loss.
Peril is? - ANS-The cause of loss.
Who is the Insured? - ANS-The individual or firm wanting protection against a loss.
OR
The person or corporation whose insurable interest is protected by the policy.
Who is the Insurer? - ANS-The insurance company that issues the policy.
OR
The one who assumes risk or agrees to underwrite a contract of insurance.
What is Underwriting? - ANS-The process that insurers use to assess the eligibility of a
potential insured to receive their coverage.
Property and Casualty (P&G) or General Insurance covers what types of Insurance? -
ANS-Automobile;
Property;
Liability;
Travel.
Property and Casualty (P&G) or General Insurance DOES NOT cover what types of
Insurance? - ANS-Life & Health.
, What are the two types of insurers? - ANS-Private & Government.
What are the two types of Private Insurers? - ANS-Stock Companies (For Profit) &
Mutual (Not For Profit).
What does Government Insurance entail? - ANS-Medical;
Employment;
Worker's Compensation.
What are the 3 Insurance Distribution Channels? - ANS-Direct Writing Channel;
Independent Brokerage Channel;
Agency Channel.
What is a Direct Writing Channel? - ANS-An insurer that sells directly to the public.
What is a Independent Brokerage Channel? - ANS-A brokerage that represents more
than one insurance company.
What is an Agency Channel? - ANS-A channel that represents one insurer, and is
authorized to sell only that insurer's policies.
What is Lloyd's of London? - ANS-A group of underwriters who choose whether or not
to insure a customer by assuming the risk themselves.
It is NOT an insurance company.
What is Reinsurance? - ANS-When an insurance company purchases insurance from
another insurance company that will will only take effect if money set aside from the
self-insured company is exhausted.
What are the two methods of reinsurance? - ANS-Facultative & Treaty.
Facultative Reinsurance is arranged: - ANS-Per case.
Treaty Reinsurance is arranged: - ANS-In advance with reinsurers to be available
automatically to cede all risks within a specific class of insurance policies to the
reinsurance company.
What is a Retrosessionaire? - ANS-A reinsurer of a reinsurer.
What is Insurance? - ANS-The undertaking by one person to indemnify another person
against loss or liability for loss in respect of a certain risk or peril to which the object of
insurance may be exposed.
OR
To pay a sum of money or another thing of value upon the happening of a specific
event.
What does Indemnify mean? - ANS-To compensate the victim of a loss, in whole or in
part, by payment, repair, or replacement.
OR
An insurer must make good the amount of the insured's financial loss - no more and no
less.
What is Risk? - ANS-The chance of loss.
OR
The object of insurance.
What is Pure Risk? - ANS-A chance of a loss, but no chance of profit.
What is Speculative Risk? - ANS-A chance of loss or profit.
What are the Three Categories of Risk? - ANS-Personal Risk;
Property Risk;
Liability Risk.
What are the Four Methods of Handling Risk? - ANS-Avoid the Risk;
Control the Risk;
Retention of Risk;
Transfer of Risk.
,What is a Hazard? - ANS-The condition which may cause a peril to occur or make a
loss more severe.
What are the Three Types of Hazards? - ANS-Physical;
Moral;
Morale.
What is a Peril? - ANS-The cause of the loss.
OR
An event which may cause a loss to occur.
Risk is? - ANS-The chance of loss.
Peril is? - ANS-The cause of loss.
Who is the Insured? - ANS-The individual or firm wanting protection against a loss.
OR
The person or corporation whose insurable interest is protected by the policy.
Who is the Insurer? - ANS-The insurance company that issues the policy.
OR
The one who assumes risk or agrees to underwrite a contract of insurance.
What is Underwriting? - ANS-The process that insurers use to assess the eligibility of a
potential insured to receive their coverage.
Property and Casualty (P&G) or General Insurance covers what types of Insurance? -
ANS-Automobile;
Property;
Liability;
Travel.
Property and Casualty (P&G) or General Insurance DOES NOT cover what types of
Insurance? - ANS-Life & Health.
, What are the two types of insurers? - ANS-Private & Government.
What are the two types of Private Insurers? - ANS-Stock Companies (For Profit) &
Mutual (Not For Profit).
What does Government Insurance entail? - ANS-Medical;
Employment;
Worker's Compensation.
What are the 3 Insurance Distribution Channels? - ANS-Direct Writing Channel;
Independent Brokerage Channel;
Agency Channel.
What is a Direct Writing Channel? - ANS-An insurer that sells directly to the public.
What is a Independent Brokerage Channel? - ANS-A brokerage that represents more
than one insurance company.
What is an Agency Channel? - ANS-A channel that represents one insurer, and is
authorized to sell only that insurer's policies.
What is Lloyd's of London? - ANS-A group of underwriters who choose whether or not
to insure a customer by assuming the risk themselves.
It is NOT an insurance company.
What is Reinsurance? - ANS-When an insurance company purchases insurance from
another insurance company that will will only take effect if money set aside from the
self-insured company is exhausted.
What are the two methods of reinsurance? - ANS-Facultative & Treaty.
Facultative Reinsurance is arranged: - ANS-Per case.
Treaty Reinsurance is arranged: - ANS-In advance with reinsurers to be available
automatically to cede all risks within a specific class of insurance policies to the
reinsurance company.
What is a Retrosessionaire? - ANS-A reinsurer of a reinsurer.
