1 (20 Marks) a. Certain requirements ideally should be fulfilled before a pure risk can be privately insured. Explain the six (6) requirements of an insurable risk. [4] [CLO 3] b. Draw and fill out the Retention/Transfer Decision Matrix. [2] [CLO 4] c. Complete the table below by filling out the description of the listed Supplemental Techniques for Risk Identification in the EXPLANATION column [10] Technique Explanation The Financial Statement Method On-site Inspections Contract Analysis Incidents Reports Hazard Analysis [CLO 2] d. Calculate the risk of the Loss distribution in the table below [4] Probability of loss Payment $million 25% $5 50% $15 25% $25 [CLO 3] Page 3 of 5 Question 2 (20 Marks) a. Define 'Six Sigma' [3] b. How does an entity achieve Six Sigma Quality? [3] c. What in Six Sigma is defined as an opportunity? [2] d. Six Sigma projects follow two project methodologies. Identify both and list & explain the five (5) phases in each of the methodologies. [6 6=12] [CLO 5] Question 3 (20 Marks) a. Define Risk Financing [2] b. Describe the following i. No advance Funding [2] ii. Earmarked Liability Accounts [2] iii. Earmarked assets Accounts [2] iv. Self-Insurance [2]