Missouri Property and Casualty Insurance Exam
What is insurance? The transfer of risk or loss
The uncertainty or chance of loss occur-
What is risk?
ring
What are the two types of risk? Pure and Speculative
Which type of risk is insurable? Pure
Which type of risk includes loss or gain? Speculative
What does the acronym STARR repre-
The options to handling risk
sent?
What does the 'S' represent in the
Sharing
acronym 'STARR'?
What does the 'T' represent in the
Transfer
acronym 'STARR'?
What does the 'A' represent in the
Avoidance
acronym 'STARR'?
What does the first 'R' represent in the
Reduction
acronym 'STARR'?
What does the second 'R' represent in
Retention
the acronym 'STARR'?
What is an example of retention when
The deductible
handling risk?
A unit of measurement used to deter-
What is exposure? mine rates charged for insurance cover-
age
Something with the potential to increase
What is a hazard?
likeliness of a risk occurring
What are the three types of hazards? Physical, Moral, and Morale
What type of hazard is smoking/drink-
Physical Hazard
ing?
What is a Moral Hazard? Lying on purpose or being deceitful
What is a Morale Hazard? A sense of carelessness
What is loss? The reduction or disappearance of value
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, Missouri Property and Casualty Insurance Exam
What is a peril? The cause of loss
What does the law of large numbers The more statistics there are to view, the
state? more predictable loss will be
What is reinsurance? When a company indemnifies another
Allows the insurer to sell in that state,
What does a Certificate of Authority do?
making them admitted and authorized
Owned by the stockholders who issue
What are Stock Companies? Are their
non-participating policies. Dividends are
dividends taxed?
taxed
Owned by the policyowners and issue
What are Mutual Companies? Are their
participating policies. Dividends are not
dividends taxed?
taxed
What are the ways in which a company
Domestic, Foreign, and Alien
can be domiciled?
In terms of domicile, what does domestic The insurer is operating in a state they
mean? are located in (one state)
In terms of domicile, what does foreign Insurer is operating in a state where they
mean? are not located (two states)
In terms of domicile, what does alien The insurer is operating completely out-
mean? side of the country (country)
What are the elements of Agent Author-
Expressed, implied, and apparent
ity?
A legal duty to act in another's best inter-
What is Fiduciary Responsibility? est (Agent submits premium collected to
the insurance company)
What are the elements of a Legal Con- Agreement, consideration, competent
tract? parties, and legal purpose
In terms of a legal contract, what is
The offer and acceptance
agreement?
In terms of a legal contract, what is an
The customer submitting an application
offer?
In terms of a legal contract, what is ac-
The insurer issues a policy
ceptance?
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What is insurance? The transfer of risk or loss
The uncertainty or chance of loss occur-
What is risk?
ring
What are the two types of risk? Pure and Speculative
Which type of risk is insurable? Pure
Which type of risk includes loss or gain? Speculative
What does the acronym STARR repre-
The options to handling risk
sent?
What does the 'S' represent in the
Sharing
acronym 'STARR'?
What does the 'T' represent in the
Transfer
acronym 'STARR'?
What does the 'A' represent in the
Avoidance
acronym 'STARR'?
What does the first 'R' represent in the
Reduction
acronym 'STARR'?
What does the second 'R' represent in
Retention
the acronym 'STARR'?
What is an example of retention when
The deductible
handling risk?
A unit of measurement used to deter-
What is exposure? mine rates charged for insurance cover-
age
Something with the potential to increase
What is a hazard?
likeliness of a risk occurring
What are the three types of hazards? Physical, Moral, and Morale
What type of hazard is smoking/drink-
Physical Hazard
ing?
What is a Moral Hazard? Lying on purpose or being deceitful
What is a Morale Hazard? A sense of carelessness
What is loss? The reduction or disappearance of value
1/9
, Missouri Property and Casualty Insurance Exam
What is a peril? The cause of loss
What does the law of large numbers The more statistics there are to view, the
state? more predictable loss will be
What is reinsurance? When a company indemnifies another
Allows the insurer to sell in that state,
What does a Certificate of Authority do?
making them admitted and authorized
Owned by the stockholders who issue
What are Stock Companies? Are their
non-participating policies. Dividends are
dividends taxed?
taxed
Owned by the policyowners and issue
What are Mutual Companies? Are their
participating policies. Dividends are not
dividends taxed?
taxed
What are the ways in which a company
Domestic, Foreign, and Alien
can be domiciled?
In terms of domicile, what does domestic The insurer is operating in a state they
mean? are located in (one state)
In terms of domicile, what does foreign Insurer is operating in a state where they
mean? are not located (two states)
In terms of domicile, what does alien The insurer is operating completely out-
mean? side of the country (country)
What are the elements of Agent Author-
Expressed, implied, and apparent
ity?
A legal duty to act in another's best inter-
What is Fiduciary Responsibility? est (Agent submits premium collected to
the insurance company)
What are the elements of a Legal Con- Agreement, consideration, competent
tract? parties, and legal purpose
In terms of a legal contract, what is
The offer and acceptance
agreement?
In terms of a legal contract, what is an
The customer submitting an application
offer?
In terms of a legal contract, what is ac-
The insurer issues a policy
ceptance?
2/9
