©JOSHCLAY 2024/2025. YEAR PUBLISHED 2024.
RMIN4000 FINAL EXAM BROWN
Questions and Answers 100% Solved
Lannister Insurance Company insures 200,000 vehicles. In 2019, they paid
a total of $136,000,000 in collision losses to the owners of 16,000 of those
vehicles. What was Lannister's collision loss frequency in 2019? - ✔✔0.08
(16k/200k)
Lannister Insurance Company insures 200,000 vehicles. In 2019, they paid
a total of $136,000,000 in collision losses to the owners of 16,000 of those
vehicles. What was Lannister's collision loss severity in 2019? - ✔✔8500
(136M/16K)
Michael Scott owns a condominium in Scranton, PA. A fire breaks out when
his girlfriend, Jan, is dancing and knocks over a candle. The fire damages
the condo and Michael's most prized possession - his plasma TV. The
damage to Michael's plasma TV is considered a(n): - ✔✔direct loss
What is the most important step in the risk management process? -
✔✔Step 1: identify loss exposures
,©JOSHCLAY 2024/2025. YEAR PUBLISHED 2024.
I have a high deductible ($2,200) in my health insurance plan. The high
deductible is an example of which type of risk management technique? -
✔✔retention
Insurance is the most appropriate risk management technique for which of
the following types of loss exposures? - ✔✔high severity, low frequency
Review
The Very Good Building & Development Company is a general contractor
(builder). Due to difficulty finding affordable workers compensation
insurance (covering employee injuries), Very Good established its own
insurance company based in Vermont for the purpose of insuring Very
Good's workers compensation loss exposures. The company that Very
Good formed is called a - ✔✔captive insurer
Jim Halpert and his wife, Pam, are selling the home they've lived in for the
past seven years. They are aware of an electrical problem in the home that
they do not want to fix because it would be expensive. Potential buyers of
the home are unaware of the electrical problem. This is an example of: -
✔✔Asymmetric Information
All of the following are examples of operational risks EXCEPT:
,©JOSHCLAY 2024/2025. YEAR PUBLISHED 2024.
a) changing conditions in financial markets
b) employment practices
c) customer service
d) supply chain - ✔✔A
Heisenberg Insurance has a home office in Albuquerque, New Mexico and
they specialize in insuring chemical manufacturers. Heisenberg is owned
by its policyholders and any annual profits are distributed through rate
reductions. Which type of insurer is Heisenberg? - ✔✔mutual insurer
Reubens work in insurance sales. He sells insurance through several
different unrelated insurance carriers that he legally represents. What is
Reuben's job? - ✔✔independent agent
Who handles the ratemaking function within insurance companies? -
✔✔Actuaries
Agent Michael Scarn sells insurance for the Federal Bureau of Insurance
(FBI). He is quoting a property insurance policy for Samuel Chang, the
owner of an office building. The office building is 15,000 square feet and
FBI charges a gross rate of $25 per 100 square feet. What is the gross
, ©JOSHCLAY 2024/2025. YEAR PUBLISHED 2024.
premium for the property policy covering the office building? - ✔✔3750
(15K feet/ 100 feet = 150ft * 25$ = 3750$)
Antonio is employed by an insurance company. He reviews applications to
determine whether his company should insure the applicant. Antonio
assigns the applicant to a rating category based on the applicant's degree
of risk. Antonio is a(n): - ✔✔underwriter
Walter White is the owner of A1A Car Wash. Jesse Pinkman is a regular
A1A customer. One day, while waiting for his car to be washed, Jesse
slipped on a wet spot on the floor and injured his back. As a result of his
injury, he threatens to file suit against Walt and A1A Car Wash. Walt
quickly notifies his insurer to start the claim process. This is an example of
a: - ✔✔third party claim
O'Houlihan Wrenches is a tool manufacturer. They have asked Average
Joe Insurance to insure their new $40 million manufacturing facility.
Because of the high amount of coverage needed, the Average Joe's
underwriter has indicated that they'll need to check with their reinsurer,
Globo Re, to determine if they can obtain a reinsurance policy to
specifically cover the manufacturing facility. Which type of reinsurance
RMIN4000 FINAL EXAM BROWN
Questions and Answers 100% Solved
Lannister Insurance Company insures 200,000 vehicles. In 2019, they paid
a total of $136,000,000 in collision losses to the owners of 16,000 of those
vehicles. What was Lannister's collision loss frequency in 2019? - ✔✔0.08
(16k/200k)
Lannister Insurance Company insures 200,000 vehicles. In 2019, they paid
a total of $136,000,000 in collision losses to the owners of 16,000 of those
vehicles. What was Lannister's collision loss severity in 2019? - ✔✔8500
(136M/16K)
Michael Scott owns a condominium in Scranton, PA. A fire breaks out when
his girlfriend, Jan, is dancing and knocks over a candle. The fire damages
the condo and Michael's most prized possession - his plasma TV. The
damage to Michael's plasma TV is considered a(n): - ✔✔direct loss
What is the most important step in the risk management process? -
✔✔Step 1: identify loss exposures
,©JOSHCLAY 2024/2025. YEAR PUBLISHED 2024.
I have a high deductible ($2,200) in my health insurance plan. The high
deductible is an example of which type of risk management technique? -
✔✔retention
Insurance is the most appropriate risk management technique for which of
the following types of loss exposures? - ✔✔high severity, low frequency
Review
The Very Good Building & Development Company is a general contractor
(builder). Due to difficulty finding affordable workers compensation
insurance (covering employee injuries), Very Good established its own
insurance company based in Vermont for the purpose of insuring Very
Good's workers compensation loss exposures. The company that Very
Good formed is called a - ✔✔captive insurer
Jim Halpert and his wife, Pam, are selling the home they've lived in for the
past seven years. They are aware of an electrical problem in the home that
they do not want to fix because it would be expensive. Potential buyers of
the home are unaware of the electrical problem. This is an example of: -
✔✔Asymmetric Information
All of the following are examples of operational risks EXCEPT:
,©JOSHCLAY 2024/2025. YEAR PUBLISHED 2024.
a) changing conditions in financial markets
b) employment practices
c) customer service
d) supply chain - ✔✔A
Heisenberg Insurance has a home office in Albuquerque, New Mexico and
they specialize in insuring chemical manufacturers. Heisenberg is owned
by its policyholders and any annual profits are distributed through rate
reductions. Which type of insurer is Heisenberg? - ✔✔mutual insurer
Reubens work in insurance sales. He sells insurance through several
different unrelated insurance carriers that he legally represents. What is
Reuben's job? - ✔✔independent agent
Who handles the ratemaking function within insurance companies? -
✔✔Actuaries
Agent Michael Scarn sells insurance for the Federal Bureau of Insurance
(FBI). He is quoting a property insurance policy for Samuel Chang, the
owner of an office building. The office building is 15,000 square feet and
FBI charges a gross rate of $25 per 100 square feet. What is the gross
, ©JOSHCLAY 2024/2025. YEAR PUBLISHED 2024.
premium for the property policy covering the office building? - ✔✔3750
(15K feet/ 100 feet = 150ft * 25$ = 3750$)
Antonio is employed by an insurance company. He reviews applications to
determine whether his company should insure the applicant. Antonio
assigns the applicant to a rating category based on the applicant's degree
of risk. Antonio is a(n): - ✔✔underwriter
Walter White is the owner of A1A Car Wash. Jesse Pinkman is a regular
A1A customer. One day, while waiting for his car to be washed, Jesse
slipped on a wet spot on the floor and injured his back. As a result of his
injury, he threatens to file suit against Walt and A1A Car Wash. Walt
quickly notifies his insurer to start the claim process. This is an example of
a: - ✔✔third party claim
O'Houlihan Wrenches is a tool manufacturer. They have asked Average
Joe Insurance to insure their new $40 million manufacturing facility.
Because of the high amount of coverage needed, the Average Joe's
underwriter has indicated that they'll need to check with their reinsurer,
Globo Re, to determine if they can obtain a reinsurance policy to
specifically cover the manufacturing facility. Which type of reinsurance
