The relative level of surplus in the insurance industry is called the industry’s A) capacity. B) liabilities. C) reserves. D) admitted assets. ANSWER Answer: A
Date: September 19th, 2020
Which of the following statements about a personal risk management program is (are) true? I. Insurance and retention are the only techniques used to handle potential losses. II. The steps in a personal risk management process are the same steps used by businesses. A) I only B) II only C) both I and II D) […]
Date: September 19th, 2020
Brenda identified all of the pure loss exposures her family faces. Then she analyzed these loss exposures, developed a plan to treat these risks, and implemented the plan. The process Brenda conducted is called A) personal insurance programming. B) personal estate planning. C) personal financial planning. D) personal risk management. ANSWER Answer: D
Date: September 19th, 2020
Which statement about a company’s cost of risk is (are) true? I. Cost of risk includes insurance premiums and retained losses. II. Reducing the cost of risk increases profitability. A) I only B) II only C) both I and II D) neither I nor II ANSWER Answer: C
Date: September 19th, 2020
A useful measure for an organization to monitor is the total expenditures for treating loss exposures including retained losses, loss control expenses, insurance premiums, and other related expenses. This measure is called the organization’s A) cost of capital. B) cost of goods sold. C) cost of risk. D) cost of equity. ANSWER Answer: […]
Date: September 19th, 2020
Which of the following is least likely to occur during a “hard” insurance market period? A) difficulty in obtaining insurance B) tightening underwriting standards C) higher insurer profits D) increasing premiums ANSWER Answer: C
Date: September 19th, 2020
Purchasing health insurance illustrates the use of which personal risk management technique? A) avoidance B) risk transfer C) risk control D) risk retention ANSWER Answer: B
Date: September 19th, 2020
Which of the following statements about captive insurance companies is (are) true? I. A captive insurance company established by a U.S. company must be domiciled in the United States. II. A captive insurance company may be owned by several parents. A) I only B) II only C) both I and II D) neither I nor […]
Date: September 19th, 2020
Mark owns a 2006 sedan. The last time Mark renewed his auto insurance, he decided to drop the physical damage insurance on this vehicle. How is Mark dealing with the auto physical damage exposure in his personal risk management program? A) risk transfer B) passive retention C) avoidance D) active retention ANSWER Answer: […]
Date: September 19th, 2020
Which of the following statements concerning the selection of risk management techniques and insurance market conditions is (are) true? I. It’s easier to purchase affordable insurance during a “soft ” market than during a “hard” market. II. Retention is used more during a “soft” market than during a “hard” market. A) I only B) II […]
Date: September 19th, 2020
