In each of the following situations, indicate which of the basic characteristic of insurance is violated.

A. Marks carpet business is failing. He is having trouble meeting his weekly budget requirements as his expenses continue to outstrip his revenues. He decides he will burn down the building and collect on his building insurance.

B. Mark from the previous example is the son-in-law of the president of a large insurance company. He wants to make an agreement with this father-in-law to have the insurance company provide him with revenue insurance (that insurance company would pay him a guaranteed amount of money to Mark every time his business was experiencing hard times.)