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Questions and Answers
What is the main role of an insurer in insurance?
What is the main role of an insurer in insurance?
- Establishing a historical relationship with the subject matter
- Allocating and spreading the risk (correct)
- Controlling the party assuming the risk
- Providing benefits only in money
When can a benefit not be the subject matter of a contract of insurance?
When can a benefit not be the subject matter of a contract of insurance?
- When the insurer does not control the party assuming the risk
- When it does not involve risk transfer
- When it is not in monetary form (correct)
- When the benefit is not plausible
Which of the following statements best describes the historical context of insurance?
Which of the following statements best describes the historical context of insurance?
- Only monetary benefits have been recognized in the history of insurance
- The relationship between an insurer and the subject matter has evolved significantly (correct)
- Insurance has always been a tool for allocating and spreading risk
- Trade has always been the primary party to an insurance contract
What is the significance of 'risk transfer' in insurance?
What is the significance of 'risk transfer' in insurance?
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What is the role of the party to the insurance contract who is in control of the party assuming the risk?
What is the role of the party to the insurance contract who is in control of the party assuming the risk?
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Study Notes
Insurance Basics
- Insurance involves allocating and spreading risk, which is one of the main risk responses.
Insurance Contract
- A party in the insurance contract is responsible for assuming the risk, known as the insurer.
- The other party in the insurance contract has a relationship with the subject matter of the insurance.
History of Insurance
- There is a brief history of insurance dating back to 6.0 (unspecified era or time period).
Contract of Insurance
- Not all benefits can be the subject of an insurance contract.
- A benefit in money is not the only requirement for a valid insurance contract.
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Description
Test your knowledge on insurance fundamentals, including risk allocation, risk transfer, insurance history, and insurance contracts. Learn about the relationship between the insurer and the insured party in insurance agreements.
