Question 1

All of the following statements about regulatory objectives of insurance rate making are true EXCEPT

Accepted Answer

A) One purpose of rate adequacy is to maintain the solvency of insurers. 
B) Rates unfairly discriminate if loss exposures that are similar with respect to losses and expenses are charged substantially different rates. 
C) Insurers know in advance if the coverages marketed will be profitable,so rate regulation is not needed. 
D) Rates are excessive if policyholders are paying substantially more than the actual value of their protection. 
A) One purpose of rate adequacy is to maintain the solvency of insurers. 
B) Rates unfairly discriminate if loss exposures that are similar with respect to losses and expenses are charged substantially different rates. 
C) Insurers know in advance if the coverages marketed will be profitable,so rate regulation is not needed. 
D) Rates are excessive if policyholders are paying substantially more than the actual value of their protection.

Question 2

One item that appears on an insurance company's financial statements is a liability that represents an estimate of the claims reported and adjusted but not yet paid,claims reported and filed but not yet adjusted,and claims incurred but not yet reported to the company.This liability is called the insurer's

Accepted Answer

A) net income. 
B) loss reserves. 
C) admitted assets. 
D) unearned premium reserve. 
A) net income. 
B) loss reserves. 
C) admitted assets. 
D) unearned premium reserve.

Question 3

One liability on a property and liability insurance company's balance sheet is for the costs associated with settling and paying reserved claims.This liability is the

Accepted Answer

A) pre-paid expense reserve. 
B) loss reserve. 
C) unearned premium reserve. 
D) loss adjustment expense reserve. 
A) pre-paid expense reserve. 
B) loss reserve. 
C) unearned premium reserve. 
D) loss adjustment expense reserve.

Question 4

MedProf Insurance markets medical malpractice insurance.The company's combined ratio in 2012 was 95.4.Its expense ratio was 25.4.What was the company's loss ratio?

Accepted Answer

A) 60.4 
B) 70.0 
C) 88.2 
D) 120.8 
A) 60.4 
B) 70.0 
C) 88.2 
D) 120.8

Question 5

A strip-mall includes eight identical-sized retail units.All of the units were built at the same time and each has an identical sprinkler system.Unit number two is a dry cleaning business.Unit number three is a bar and grill.Unit number four is a dress shop.The owners of these three units are all insured by the same insurance company,but the property insurance premiums vary significantly.Which of the following rating factors best explains the difference in premiums?

Accepted Answer

A) exposure 
B) protection 
C) construction 
D) occupancy 
A) exposure 
B) protection 
C) construction 
D) occupancy

Question 6

The unit of measurement used in property and casualty insurance pricing is called the

Accepted Answer

A) unit rate. 
B) premium. 
C) exposure unit. 
D) experience unit. 
A) unit rate. 
B) premium. 
C) exposure unit. 
D) experience unit.

Question 7

Under one method of estimating a loss reserve,the reserve is based on life expectancy,duration of disability,and similar factors.This method of estimating loss reserves is called the

Accepted Answer

A) judgment method. 
B) tabular value method. 
C) loss ratio method. 
D) average value method. 
A) judgment method. 
B) tabular value method. 
C) loss ratio method. 
D) average value method.

All of the following statements about regulatory objectives of insurance rate making are true EXCEPT

One liability on a property and liability insurance company's balance sheet is for the costs associated with settling and paying reserved claims.This liability is the

MedProf Insurance markets medical malpractice insurance.The company's combined ratio in 2012 was 95.4.Its expense ratio was 25.4.What was the company's loss ratio?

The unit of measurement used in property and casualty insurance pricing is called the

Under one method of estimating a loss reserve,the reserve is based on life expectancy,duration of disability,and similar factors.This method of estimating loss reserves is called the

Risk and Its Treatment

Insurance and Risk

Introduction to Risk Management

Advanced Topics in Risk Management

Types of Insurers and Marketing Systems

Insurance Company Operations

Government Regulation of Insurance

Fundamental Legal Principles

Analysis of Insurance Contracts

Life Insurance

Life Insurance Contractual Provisions

Buying Life Insurance

Annuities and Individual Retirement Accounts

Health-Care Reform; Individual Health Insurance Coverages

Employee Benefits: Group Life and Health Insurance

Employee Benefits: Retirement Plans

Social Insurance

The Liability Risk

Homeowners Insurance,section I

Homeowners Insurance,section II

Auto Insurance

Auto Insurance and Society

Other Property and Liability Insurance Coverages

Commercial Property Insurance

Commercial Liability Insurance

Crime Insurance and Surety Bonds

Filters

Exam 7: Financial Operations of Insurers

All of the following statements about regulatory objectives of insurance rate making are true EXCEPT

One liability on a property and liability insurance company's balance sheet is for the costs associated with settling and paying reserved claims.This liability is the

MedProf Insurance markets medical malpractice insurance.The company's combined ratio in 2012 was 95.4.Its expense ratio was 25.4.What was the company's loss ratio?

The unit of measurement used in property and casualty insurance pricing is called the

Under one method of estimating a loss reserve,the reserve is based on life expectancy,duration of disability,and similar factors.This method of estimating loss reserves is called the

Risk and Its Treatment

Insurance and Risk

Introduction to Risk Management

Advanced Topics in Risk Management

Types of Insurers and Marketing Systems

Insurance Company Operations

Government Regulation of Insurance

Fundamental Legal Principles

Analysis of Insurance Contracts

Life Insurance

Life Insurance Contractual Provisions

Buying Life Insurance

Annuities and Individual Retirement Accounts

Health-Care Reform; Individual Health Insurance Coverages

Employee Benefits: Group Life and Health Insurance

Employee Benefits: Retirement Plans

Social Insurance

The Liability Risk

Homeowners Insurance,section I

Homeowners Insurance,section II

Auto Insurance

Auto Insurance and Society

Other Property and Liability Insurance Coverages

Commercial Property Insurance

Commercial Liability Insurance

Crime Insurance and Surety Bonds

Filters