Insurance Knowledge Aptitude Test (IKAT)
36 Questions
0 Views

Choose a study mode

Play Quiz
Study Flashcards
Spaced Repetition
Chat to lesson

Podcast

Play an AI-generated podcast conversation about this lesson

Questions and Answers

What are the two types of insurance sectors?

Property-casualty and life-health

What is the name of the document that outlines an insurer's underwriting policy?

Underwriting policy or underwriting philosophy

What is the best method of assessing loss exposures for a company?

  • Conducting a loss exposure survey of the operation.
  • Performing a loss history analysis.
  • Analyzing data sent to the insurer through smart devices and sensors.
  • Physically inspecting the company's operations. (correct)

    • What is the primary function of an insurance producer?

    <p>Selling insurance.</p> Signup and view all the answers

    What are two examples of types of insurance policies?

    <p>All of the above.</p> Signup and view all the answers

    What are the major goals of a claims department?

    <p>Keeping the insurer's promise and achieving profitability.</p> Signup and view all the answers

    Which categories of insurance may be exempt from state underwriting and rate regulation?

    <p>Surplus lines insurers and unique or difficult-to-place risk types.</p> Signup and view all the answers

    Name the four elements of a valid contract.

    <p>Agreement, capacity to contract, consideration, legal purpose.</p> Signup and view all the answers

    What does an insurance policy involve in terms of an exchange?

    <p>All of the above.</p> Signup and view all the answers

    What is the most important factor in determining whether the insured is legally responsible for damages in a liability claim?

    <p>Whether the activities leading to the loss are covered by the policy.</p> Signup and view all the answers

    What is the purpose behind 'Other Insurance' provisions in insurance policies?

    <p>To prevent an insured from profiting from a loss by collecting on multiple policies.</p> Signup and view all the answers

    What does the term 'direct loss' mean?

    <p>A reduction in value that occurs immediately as a result of a specific cause of loss.</p> Signup and view all the answers

    What is the difference between 'risk control' and 'risk financing' techniques?

    <p>Risk control attempts to decrease the frequency and severity of losses, while risk financing involves paying for the loss or transferring the cost to another party.</p> Signup and view all the answers

    What is the purpose of a 'loss run'?

    <p>A report detailing an insured's past activity, valued on a specific date.</p> Signup and view all the answers

    Which insurance classification system is most commonly used for commercial properties?

    <p>Class rating.</p> Signup and view all the answers

    What additional allowances are added to a base rate to determine the final rate for a loss exposure?

    <p>Expenses and profits, as well as contingencies.</p> Signup and view all the answers

    What is the term for a payment made by an insured to an insurer in exchange for insurance protection over a certain time period?

    <p>Premium.</p> Signup and view all the answers

    What type of insurance policy is typically used when a homeowner needs additional coverage for valuable items, such as jewelry, in their home?

    <p>A scheduled coverage policy.</p> Signup and view all the answers

    What type of financial statement reflects an insurer's financial position at a specific point in time?

    <p>Balance sheet.</p> Signup and view all the answers

    What financial ratio is used to measure an insurer's underwriting profitability?

    <p>Combined ratio</p> Signup and view all the answers

    Which of the following is NOT a common characteristic of an ideally insurable loss exposure?

    <p>A small number of similar exposure units</p> Signup and view all the answers

    What is the main purpose of 'risk control' techniques?

    <p>To reduce the frequency and severity of losses.</p> Signup and view all the answers

    What is the term used to describe the process of transferring financial consequences of loss to an insurance company for a fee?

    <p>Insurance or noninsurance risk transfer.</p> Signup and view all the answers

    Which of these is NOT a common risk control technique?

    <p>Retention</p> Signup and view all the answers

    What is the first step in the risk management process?

    <p>Identifying loss exposures.</p> Signup and view all the answers

    What risk management technique involves accepting the financial consequences of a loss?

    <p>Retention</p> Signup and view all the answers

    What are the three key elements of a personnel loss exposure?

    <p>Assets exposed to the loss, causes of loss, financial consequences of loss.</p> Signup and view all the answers

    What type of liability loss exposure is common to most businesses and individuals?

    <p>Auto liability exposures.</p> Signup and view all the answers

    What three categories are used to analyze property loss exposures?

    <p>Assets exposed to loss, causes of loss, financial consequences of loss.</p> Signup and view all the answers

    What are the three legal foundations for determining legal liability?

    <p>Torts, contracts, and statutes.</p> Signup and view all the answers

    What are the two types of damages that a claimant may be awarded in a liability insurance claim?

    <p>Compensatory damages and punitive damages.</p> Signup and view all the answers

    Which of the following categories of loss exposures does NOT affect an individual or their family?

    <p>Business risk.</p> Signup and view all the answers

    What are the six characteristics of an ideally insurable loss exposure?

    <p>Pure risk, fortuitous losses, definite and measurable losses, a large number of similar exposure units, independent and not catastrophic, affordable premiums.</p> Signup and view all the answers

    What is the term used to describe a loss exposure that occurs by chance from the insured’s standpoint and is not intended by the insured?

    <p>Fortuitous losses.</p> Signup and view all the answers

    What is the term used to describe a situation that increases the frequency or severity of a loss?

    <p>Hazard.</p> Signup and view all the answers

    What are the two major categories of risk management techniques?

    <p>Risk control and risk financing.</p> Signup and view all the answers

    Study Notes

    Insurance Knowledge Aptitude Test Text Book (IKAT)

    • IKAT Version 1 for US Division
    • Covers GGB (US, AUS, CAN), GB (US), RPS, ARTEX, Lead Enrichment, Support
    • Curated from previous versions of course material provided by Institutes Knowledge Group
    • Proprietary material, not to be forwarded outside the organization

    Contents

    • Assignment 1 (Understanding Insurance):

      • Understanding Insurance (page 01)
      • Benefits and Costs (page 02)
      • Types of Personal and Commercial Insurance (page 09)
      • Types of Private Insurers (page 13)
      • Government Insurance Programs (page 17)
      • Overview of Insurance Functions (page 21)
      • Summary (page 25)

    • Assignment 2 (Insurance Regulation):

      • Insurance Regulation (page 27)
      • Why Insurance Operations Are Regulated (page 28)
      • Insurer Licensing (page 29)
      • Insurance Rate and Form Regulation (page 33)
      • Market Conduct and Solvency Regulation (page 35)
      • Summary (page 41)

    • Assignment 3 (Insurer Financial Performance):

      • Insurer Financial Performance (page 43)
      • Understanding Insurer Financial Statements (page 43)
      • Analyzing Insurer Financial Ratio Calculation (page 49)
      • Knowledge to Action: Financial Ratios and Insurer Financial Performance Case (page 53)
      • Summary (page 63)

    • Assignment 4 (Marketing):

      • Marketing (page 64)
      • Understanding Factors That Influence an Agency Relationship (page 65)
      • Summarizing Types of Insurance Distribution Systems (page 69)
      • Functions of Insurance Producers (page 75)
      • Selecting Insurance Marketing Distribution Systems and Channels (page 79)
      • Summary (page 84)

    • Assignment 5 (Underwriting and Rate-Making):

      • Underwriting and Rate-Making (page 86)
      • Underwriting Activities (page 87)
      • The Underwriting Process (page 90)
      • Underwriting Management (page 96)
      • Rate-making (page 99)
      • Premium Determination (page 102)
      • Summary (page 107)

    • Assignment 6 (Claims):

      • Claims (page 108)
      • Goals of the Claims Function (page 109)
      • Claims Department Structure, Personnel, and Performance (page 111)
      • The Claims Handling Process (page 116)
      • Aspects of Property Insurance Claims (page 123)
      • Aspects of Liability Insurance Claims (page 130)
      • Good-Faith Claims Handling (page 133)
      • Summary (page 137)

    • Assignment 7 (Risk Management):

      • Risk Management (page 139)
      • Basic Purpose and Scope of Risk Management (page 140)
      • Identifying and Analyzing Loss Exposures (page 141)
      • Examining the Feasibility of Risk Management Techniques (page 148)
      • Selecting, Implementing, and Monitoring Risk Management Techniques (page 153)
      • Benefits of Risk Management (page 160)
      • Applying the Risk Management Process (page 163)
      • Summary (page 166)

    • Assignment 8 (Loss Exposures):

      • Loss Exposures (page 168)
      • Property Loss Exposures (page 169)
      • The Basis for Legal Liability (page 175)
      • Liability Loss Exposures (page 183)
      • Personnel Loss Exposures (page 188)
      • Net Income Loss Exposures (page 193)
      • Ideally Insurable Loss Exposures (page 197)
      • Summary (page 202)

    • Assignment 9 (Insurance Policies):

      • Insurance Policies (page 204)
      • Elements of a Contract (page 206)
      • Distinguishing Characteristics of Insurance Policies (page 209)
      • Insurance Policy Structure (page 214)
      • Policy Provisions (page 218)
      • Summary (page 239)

    Studying That Suits You

    Use AI to generate personalized quizzes and flashcards to suit your learning preferences.

    Quiz Team

    Related Documents

    IKAT Version 1 For US Division PDF

    Description

    This quiz is based on the Insurance Knowledge Aptitude Test (IKAT) Version 1 for the US Division. It covers various aspects of insurance, including personal and commercial types, regulations, and functions. Designed to enhance understanding of insurance, it is curated from relevant educational material and intended for organizational use only.

    More Like This

    Use Quizgecko on...
    Browser
    Open
    Browser
    Browser