Finance

All of the following statements about the methods of regulating insura

All of the following statements about the methods of regulating insurance are true EXCEPT A) All states have insurance laws that regulate the operations of insurers. B) Insurers are totally exempt from regulation by federal agencies and laws. C) The courts regulate insurance in many ways, including the interpretation of policy clauses and provisions. D) […]

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Date: September 19th, 2020

A manufacturing company just hired a new risk manager, and she has ins

A manufacturing company just hired a new risk manager, and she has instituted several employee safety programs. She has persuaded the insurer writing the company’s workers compensation insurance to base the premium on the company’s actual loss experience during the current coverage period rather than on the company’s historical performance. This type of plan is […]

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Date: September 19th, 2020

In schedule rating, each building is individually evaluated based on s

In schedule rating, each building is individually evaluated based on several rating factors. One factor refers to the possibility that the building will be damaged or destroyed by a fire that starts at an adjacent property and spreads to the building. This rating factor is known as A) occupancy. B) protection. C) maintenance. D) exposure. […]

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Date: September 19th, 2020

Which of the following statements about the combined ratio is true? A

Which of the following statements about the combined ratio is true? A) It is equal to the loss ratio minus the expense ratio. B) A combined ratio greater than 1 (or 100 percent) means an underwriting loss has occurred. C) The combined ratio considers the company’s investment income. D) A combined ratio less than 1 […]

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Date: September 19th, 2020

Which of the following statements is (are) true about the loss ratio m

Which of the following statements is (are) true about the loss ratio method of class rating? I. The pure premium is calculated, and it is loaded to cover expenses, profit, and contingencies. II. The actual loss ratio is compared to the expected loss ratio, and the rate is adjusted accordingly. A) I only B) II […]

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Date: September 19th, 2020

Which of the following statements about schedule rating is (are) true?

Which of the following statements about schedule rating is (are) true? I. It involves the determination of a basis rate for each exposure, which is then modified by credits or debits. II. It is based on the assumption that certain physical characteristics of the insured’s operations will influence the insured’s future loss experience. A) I […]

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Date: September 19th, 2020

In schedule rating, each building is individually rated on several fac

In schedule rating, each building is individually rated on several factors. One factor refers to the quality of the city’s water supply and fire department, and the risk control devices installed in the building. This factor is called A) exposure. B) occupancy. C) protection. D) housekeeping.     ANSWER Answer: C

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Date: September 19th, 2020