Multiple Choice Questions Section 1. Which of the following method reduces the chance of less to A- Avoidance B-Risk retention C- Risk Reduction D- Risk financing 2. An earthquake is an example of A-Catastrophic loss is- Messinable Joss C-Large umber of D-Calcalable chance of loss exposure it trac 3. Which of the following statement regarding insurance and gambling A-Insurance is used to handle existing pure risk, while gambling cas new speculative risk - Insurance is always socially productive, while gambling is always socially productive C- Both A and B D- Neither Anor B. 4. contracts, leases, hold-harmless agreemeens, are examples of A- Non-insurance transfer. B- Self-insurance C- Captive insurer. D- insurance. A- Adverse selection. B. Life insurance. C- Health insurance. D. Hedging 5. It can result from persons with serious health problems who seek life or health insurance at standard rates 6. Which of the following statements about stock insurers is/are true? A-Stockholders bear any losses and share profits B- They issue assessable polices C- Stockholders are responsible of financial success D- All choices are correct loss ero? ng is /are true? ling creates a always A- It is a corporation owned by stockhoon 7. Which of the following statement is/are true about fair of a social or religious organization, B- It is a mutual sures that provides lide and health inter D. It is managed by any C- It is society of members who underwrite insurance in syndicates 8. someone who legally represents the inred A- Iner B- Broker C- Agen D- None of the above independent contractor? 9. is an insurer in which the salesperson is an employee of the ima A- Indirect writer. B- Direct writer C. Indirect response. D- Direct responsic. 10. It is not an insurer, but a society of members who underwrite insurance in syndicates. A- Stock insurer B- Lloyds of London. C- Mutual insurer. D- A reciprocal exchange. 11. It is a marketing system by which an insurer sells its products through established agents A- An agency building system. B- A nonbuilding agency system C- Brokers Agency. D- Captive agency. 12. An advance premium mutual has the right to assess policyowners an additional amount A- True. B- False 13. A fortuitous loss is one that is unforeseen and unexpected by the insured and occurs because of chance A- True B- False 14. A life insurance agent has the power to hind the insurer, while properly casualty agent normally does not have the authority to hind the in A. True. B- False 15. The primary objective of underwriting is to attain a A- Profit B- The maximum possible loss C- Loss frequency D- Risk Management 19. 20. 16. Information for underwriting comes from A. The application B- Physical inspection C. An inspection reports D- All the above 17. Agents are often referred to an A- Producers B- Brokers C-Makers D. None of the above 18. All the following are objectives of claims settlemene Esss A Ratusing to pay claims without conducting a reasonable investigation B- Verification of a covered loss C-Fr and promps payment of claims D- Persoalamitance to the insured determines if a covered kus has ocasered and the amount of e A- A claims ander B. As agent C-A broker D-A producer is the price per will of urance A- A ra B-A Premium C- An Exposure prices D- None of the above while the 21. The 22. T 21. The while the amount of insurance went to the reinsurer is known as a is the amount of insurance retained by the primary company, A- retention limit, cession B- cession, retention limit C- premium, cession D- cession, premium 22. The primary assets for an insurance company are fixed assets. A- True. B- False. 23. A loss reserve is an estimated amount for A-Claims reported and adjusted, but not yet paid B- Claims reported and filed, but not yet adjusted C- Claims incurred but not yet reported to the company D- All the above 24. is an accounting term in the insurance industry used to describe the total amount customers are required to pay for insurance coverage. A- Pure premium. B- Unearned premium. C-Net premium. D- Written premium. 25. Measuring the Performance of Property and Casualty Insurers using.... ratio A- investment B- Expenses C- loss D- All the above 26. This ratio measures the company's total performance A- Loss ratio B- Expenses ratio C- Combined ratio D- Operating ratio 27. Rates should be adequate for paying part of losses and expenses. A- True. B- False. 28. expenses, profit, and a margin for contingencies is the amount that must be added to the pure premium for other A- premium. B- Pure premium. C- Total premium. D- loading. 29. The financial strength of a company can be determined through its Policyholder surplus as it indicates the financial ability of a company A- True. B- False. 30. Some insurers use the capital markets as an alternative to traditional reinsurance A- True. B- False. Section B Narrative Question 1- Explain the differences between hedging and insurance. 2- Briefly outline the Marketing Systems in Property and Liability Insurance. 2 marks marks 3- Identify and comment on Three (3) basic methods that use in rate making in property and casualty insurance. 3 marks 4- Explain the purposes of the REINSURANCE and compare between different forms of reinsurance which is achieve those purposes. 3 marks 1. Which of the following method reduces the chance of lose to? A- Avoidance Multiple Choice Questions Section B-Risk retention C- Risk Reduction D- Risk financing 2. An earthquake is an example of A-Catastrophic loss B-Measurable Joss C- Large umber of exposure D- Calcalable chance of loss 3. Which of the following statement regarding insurance and publing stre A-Insurance is used to handle existing pure risk, while gambling creates a new speculative risk - Insurance is always socially productive, while gambling is always socially productive. C- Both A and B D- Neither Anor B. 4. contracts, leases, hold-harmless agreemeens, are examples of A- Non-insurance transfor B-Self-insurance. C-Captive insorer. D- insurance. 5. It can result from persons with serious health problems who seek life or health insurance at standard rates A- Adverse selection. B. Life insurance. C-Health insurance. D. Hedging 6. Which of the following statements about stock insurers isare true? A-Stockholders bear any losses and share profits B- They issue assessable polices C- Stockholders are responsible of financial success D- All choices are correct 2 14. A life insurance agent has the power to hind the insurer, while properly casualty agent normally does not have the authority to bind the in A. True. B- False 15. The primary objective of underwriting is to attain A- Profit 20. B- The maximum possible loss C- Loss frequency D. Risk Management 16. Information for underwriting comes from: A. The application B- Physical inspection C. An inspection reports D. All the above 17. Agents are often referred to as A- Producers B- Brokers C- Makers D- None of the above 18. All the following are objectives of claims settlemese asses A- Rating to pay claims without conducting a reasonable investigation B Verification of a coverid loss C- Fit and promps payment of claims D- Personal aitance to the insured determines if a covered kus has occurred and the amount of the loss A- A claims adder B. An agent C-A broker D-A producer is the price per wit of insurance A- A B-A Premium C An Exposer prices D- None of the above while the p 21. The 22. T 28. expenses, profit, and a margin for contingencies is the amount that must be added to the pure premium for other A- premium. B- Pure premium. C- Total premium. D- loading. 29. The financial strength of a surplus as it indicates the financial ability of a company A- True. B- False. company can be determined through its Policyholder 30. Some insurers use the capital markets as an alternative to traditional reinsurance A- True. B- False, Section B Narrative Question 1- Explain the differences between hedging and insurance. 2- Briefly outline the Marketing Systems in Property and Liability Insurance. 2 marks marks 3- Identify and comment on Three (3) basic methods that use in rate making in property and casualty insurance. 3 marks 4- Explain the purposes of the REINSURANCE and compare between different forms of reinsurance which is achieve those purposes. 3 marks Multiple Choice Questions Section 1. Which of the following method reduces the chance of less to A- Avoidance B-Risk retention C- Risk Reduction D- Risk financing 2. An earthquake is an example of A-Catastrophic loss is- Messinable Joss C-Large umber of D-Calcalable chance of loss exposure it trac 3. Which of the following statement regarding insurance and gambling A-Insurance is used to handle existing pure risk, while gambling cas new speculative risk - Insurance is always socially productive, while gambling is always socially productive C- Both A and B D- Neither Anor B. 4. contracts, leases, hold-harmless agreemeens, are examples of A- Non-insurance transfer. B- Self-insurance C- Captive insurer. D- insurance. A- Adverse selection. B. Life insurance. C- Health insurance. D. Hedging 5. It can result from persons with serious health problems who seek life or health insurance at standard rates 6. Which of the following statements about stock insurers is/are true? A-Stockholders bear any losses and share profits B- They issue assessable polices C- Stockholders are responsible of financial success D- All choices are correct loss ero? ng is /are true? ling creates a always A- It is a corporation owned by stockhoon 7. Which of the following statement is/are true about fair of a social or religious organization, B- It is a mutual sures that provides lide and health inter D. It is managed by any C- It is society of members who underwrite insurance in syndicates 8. someone who legally represents the inred A- Iner B- Broker C- Agen D- None of the above independent contractor? 9. is an insurer in which the salesperson is an employee of the ima A- Indirect writer. B- Direct writer C. Indirect response. D- Direct responsic. 10. It is not an insurer, but a society of members who underwrite insurance in syndicates. A- Stock insurer B- Lloyds of London. C- Mutual insurer. D- A reciprocal exchange. 11. It is a marketing system by which an insurer sells its products through established agents A- An agency building system. B- A nonbuilding agency system C- Brokers Agency. D- Captive agency. 12. An advance premium mutual has the right to assess policyowners an additional amount A- True. B- False 13. A fortuitous loss is one that is unforeseen and unexpected by the insured and occurs because of chance A- True B- False 14. A life insurance agent has the power to hind the insurer, while properly casualty agent normally does not have the authority to hind the in A. True. B- False 15. The primary objective of underwriting is to attain a A- Profit B- The maximum possible loss C- Loss frequency D- Risk Management 19. 20. 16. Information for underwriting comes from A. The application B- Physical inspection C. An inspection reports D- All the above 17. Agents are often referred to an A- Producers B- Brokers C-Makers D. None of the above 18. All the following are objectives of claims settlemene Esss A Ratusing to pay claims without conducting a reasonable investigation B- Verification of a covered loss C-Fr and promps payment of claims D- Persoalamitance to the insured determines if a covered kus has ocasered and the amount of e A- A claims ander B. As agent C-A broker D-A producer is the price per will of urance A- A ra B-A Premium C- An Exposure prices D- None of the above while the 21. The 22. T 21. The while the amount of insurance went to the reinsurer is known as a is the amount of insurance retained by the primary company, A- retention limit, cession B- cession, retention limit C- premium, cession D- cession, premium 22. The primary assets for an insurance company are fixed assets. A- True. B- False. 23. A loss reserve is an estimated amount for A-Claims reported and adjusted, but not yet paid B- Claims reported and filed, but not yet adjusted C- Claims incurred but not yet reported to the company D- All the above 24. is an accounting term in the insurance industry used to describe the total amount customers are required to pay for insurance coverage. A- Pure premium. B- Unearned premium. C-Net premium. D- Written premium. 25. Measuring the Performance of Property and Casualty Insurers using.... ratio A- investment B- Expenses C- loss D- All the above 26. This ratio measures the company's total performance A- Loss ratio B- Expenses ratio C- Combined ratio D- Operating ratio 27. Rates should be adequate for paying part of losses and expenses. A- True. B- False. 28. expenses, profit, and a margin for contingencies is the amount that must be added to the pure premium for other A- premium. B- Pure premium. C- Total premium. D- loading. 29. The financial strength of a company can be determined through its Policyholder surplus as it indicates the financial ability of a company A- True. B- False. 30. Some insurers use the capital markets as an alternative to traditional reinsurance A- True. B- False. Section B Narrative Question 1- Explain the differences between hedging and insurance. 2- Briefly outline the Marketing Systems in Property and Liability Insurance. 2 marks marks 3- Identify and comment on Three (3) basic methods that use in rate making in property and casualty insurance. 3 marks 4- Explain the purposes of the REINSURANCE and compare between different forms of reinsurance which is achieve those purposes. 3 marks 1. Which of the following method reduces the chance of lose to? A- Avoidance Multiple Choice Questions Section B-Risk retention C- Risk Reduction D- Risk financing 2. An earthquake is an example of A-Catastrophic loss B-Measurable Joss C- Large umber of exposure D- Calcalable chance of loss 3. Which of the following statement regarding insurance and publing stre A-Insurance is used to handle existing pure risk, while gambling creates a new speculative risk - Insurance is always socially productive, while gambling is always socially productive. C- Both A and B D- Neither Anor B. 4. contracts, leases, hold-harmless agreemeens, are examples of A- Non-insurance transfor B-Self-insurance. C-Captive insorer. D- insurance. 5. It can result from persons with serious health problems who seek life or health insurance at standard rates A- Adverse selection. B. Life insurance. C-Health insurance. D. Hedging 6. Which of the following statements about stock insurers isare true? A-Stockholders bear any losses and share profits B- They issue assessable polices C- Stockholders are responsible of financial success D- All choices are correct 2 14. A life insurance agent has the power to hind the insurer, while properly casualty agent normally does not have the authority to bind the in A. True. B- False 15. The primary objective of underwriting is to attain A- Profit 20. B- The maximum possible loss C- Loss frequency D. Risk Management 16. Information for underwriting comes from: A. The application B- Physical inspection C. An inspection reports D. All the above 17. Agents are often referred to as A- Producers B- Brokers C- Makers D- None of the above 18. All the following are objectives of claims settlemese asses A- Rating to pay claims without conducting a reasonable investigation B Verification of a coverid loss C- Fit and promps payment of claims D- Personal aitance to the insured determines if a covered kus has occurred and the amount of the loss A- A claims adder B. An agent C-A broker D-A producer is the price per wit of insurance A- A B-A Premium C An Exposer prices D- None of the above while the p 21. The 22. T 28. expenses, profit, and a margin for contingencies is the amount that must be added to the pure premium for other A- premium. B- Pure premium. C- Total premium. D- loading. 29. The financial strength of a surplus as it indicates the financial ability of a company A- True. B- False. company can be determined through its Policyholder 30. Some insurers use the capital markets as an alternative to traditional reinsurance A- True. B- False, Section B Narrative Question 1- Explain the differences between hedging and insurance. 2- Briefly outline the Marketing Systems in Property and Liability Insurance. 2 marks marks 3- Identify and comment on Three (3) basic methods that use in rate making in property and casualty insurance. 3 marks 4- Explain the purposes of the REINSURANCE and compare between different forms of reinsurance which is achieve those purposes. 3 marks