Insurance Overview and Regulations

Insurance is a way to transfer the costs of losses to an insurer.

Risk management technique, risk transfer system, business, and contract

<p>Property-casualty and life-health</p> Signup and view all the answers

<p>To protect consumers, to maintain insurer solvency, and to prevent destructive competition</p> Signup and view all the answers

<p>Homeowners, personal auto, and life insurance.</p> Signup and view all the answers

<p>Commercial package, commercial auto, and commercial general liability.</p> Signup and view all the answers

<p>Stock insurers, mutual insurers, and reciprocal insurance exchanges.</p> Signup and view all the answers

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

<p>To fill unmet needs in the private market and to facilitate compulsory insurance purchases.</p> Signup and view all the answers

<p>Marketing, underwriting, claims, risk control, and premium audit</p> Signup and view all the answers

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

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

<p>To determine if adjustments are necessary to the insured's premium at the end of the policy period.</p> Signup and view all the answers

<p>The sale of insurance and the investment of funds.</p> Signup and view all the answers

<p>Written premiums are premiums collected on all insurance policies regardless of the time period covered, while earned premiums represent the portion of written premiums that apply to the period of coverage already passed.</p> Signup and view all the answers

<p>Revenues, expenses, and net income.</p> Signup and view all the answers

<p>A loss ratio is a financial ratio that compares an insurer's incurred losses and loss adjustment expenses against its earned premiums.</p> Signup and view all the answers

<p>An expense ratio is a financial ratio that compares an insurer's incurred underwriting expenses to its written premiums.</p> Signup and view all the answers

<p>A combined ratio is a financial ratio that measures an insurer's underwriting profitability by adding the loss ratio and the expense ratio.</p> Signup and view all the answers

<p>An investment income ratio is a financial ratio that compares an insurer's net investment income to its earned premiums.</p> Signup and view all the answers

<p>An overall operating ratio is derived by subtracting the investment income ratio from the combined ratio.</p> Signup and view all the answers

<p>To support the sale of insurance products and services, such as connecting insurance customers with agents, brokers, or the insurer.</p> Signup and view all the answers

<p>Independent agents and brokers own their expiration lists, allowing them to continue doing business with existing clients through different insurers.</p> Signup and view all the answers

<p>Internet, call centers, and direct response marketing.</p> Signup and view all the answers

<p>Customers' needs and characteristics, their own profile, and the degree of control desired over marketing operations.</p> Signup and view all the answers

<p>To develop and implement a comprehensive plan for effectively managing risk, including identification of potential losses, analysis of those losses, selection of appropriate risk management techniques, and monitoring the results of those actions.</p> Signup and view all the answers

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

<p>Avoidance, loss prevention, loss reduction, and separation.</p> Signup and view all the answers

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

<p>To qualify applications for insurance, determine if coverage is appropriate, and set an appropriate premium.</p> Signup and view all the answers

<p>Evaluate the submission, develop underwriting alternatives, select an underwriting alternative, determine an appropriate premium, and implement the underwriting decision.</p> Signup and view all the answers

<p>Physical, moral, morale, and legal.</p> Signup and view all the answers

<p>To determine an appropriate premium for each unit of exposure, ensuring a fair and accurate price for insurance.</p> Signup and view all the answers

<p>Adequacy, not excessive, and not unfairly discriminatory.</p> Signup and view all the answers

<p>To ensure that insurance policies are clear and readable for consumers and address any unfair or unreasonable policy provisions.</p> Signup and view all the answers

<p>Verifying coverage, determining the amount of loss, and concluding the claim.</p> Signup and view all the answers

<p>The insured's overall financial health</p> Signup and view all the answers

<p>Actual cash value, replacement cost, and agreed value.</p> Signup and view all the answers

<p>Verifying coverage, determining the cause of loss, and determining the amount of damages.</p> Signup and view all the answers

<p>Financial loss due to emotional distress</p> Signup and view all the answers

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

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

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

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

<p>A pure risk, fortuitous loss, definite and measurable, large number of similar exposure units, independent and not catastrophic, and affordable premium.</p> Signup and view all the answers

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

<p>Contract of indemnity, contract of utmost good faith, contract involving fortuitous events and the exchange of unequal amounts, and contract of adhesion.</p> Signup and view all the answers

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

<p>Customer service agreement</p> Signup and view all the answers

<p>To personalize the policy and summarize the essential information about the insured, the coverage, and the policy limits.</p> Signup and view all the answers

<p>To clearly outline the insurer's promises to the insured, stating the specific coverage provided and the circumstances under which the insurer will pay for a covered loss.</p> Signup and view all the answers

<p>To outline the duties, rights, and obligations of the insured, including their responsibilities for keeping the policy in effect and reporting losses in a timely manner.</p> Signup and view all the answers

<p>To clarify what is not covered under the policy, limiting coverage to specific exposures and preventing the insurer from being held accountable for losses they are not obligated to pay.</p> Signup and view all the answers

<p>Fire, lightning, and windstorm.</p> Signup and view all the answers

<p>Collision, other than collision (comprehensive), and specified causes of loss.</p> Signup and view all the answers

<p>The potential losses could be so widespread that the insurer's funds might be inadequate, the losses are generally considered uninsurable due to their widespread nature, and such events pose a significant threat to the insurer's financial stability, making them economically unfeasible to insure.</p> Signup and view all the answers

<p>Reduction in property value, lost income, and extra expenses.</p> Signup and view all the answers

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

<p>Thorough and unbiased investigation, complete and accurate documentation, and fair evaluation.</p> Signup and view all the answers

<p>Autos, watercraft, and other vehicles; premises; and products.</p> Signup and view all the answers