Question 1

To prove in court that a defendant was negligent,the plaintiff must show all of the following except:

Accepted Answer

A) a law was broken 
B) a legal duty to protect existed 
C) an injury resulted directly from a breached duty 
D) a person did not act reasonably 
A) a law was broken 
B) a legal duty to protect existed 
C) an injury resulted directly from a breached duty 
D) a person did not act reasonably

Question 2

What is adverse selection? Explain why insurers are concerned about adverse selection.

Accepted Answer

Adverse selection occurs when insurance

Question 3

The last clear chance is a modification of the statutory contributory negligence rule.

Accepted Answer

A) True 
 B)False

Question 4

Given the requisites of an insurable risk,which of the following exposures would make the best subject of a profitable insurance pool? (Assume a premium appropriate to the exposure is charged,and analyze the exposure from an insurer's standpoint.)

Accepted Answer

A) insuring college students against their GPA falling below a 3.0 
B) insuring all the dorms on a single college campus against property damage 
C) insuring all the lives of college seniors in the U.S. for $10,000 each, without an initial medical exam 
D) insuring students against the theft or disappearance of textbooks 
A) insuring college students against their GPA falling below a 3.0 
B) insuring all the dorms on a single college campus against property damage 
C) insuring all the lives of college seniors in the U.S. for $10,000 each, without an initial medical exam 
D) insuring students against the theft or disappearance of textbooks

Question 5

Volcanoes have catastrophic loss potential because they are limited in geographic impact.

Accepted Answer

A) True 
 B)False

Question 6

An insurance applicant dying from cancer is not likely to be insured because:

Accepted Answer

A) the loss is not definite as to time and place 
B) the probability of loss varies daily, ultimately reaching 1.0 
C) the loss would be catastrophic for the insurer 
D) the loss is certain to occur and the price for coverage would be uneconomical 
A) the loss is not definite as to time and place 
B) the probability of loss varies daily, ultimately reaching 1.0 
C) the loss would be catastrophic for the insurer 
D) the loss is certain to occur and the price for coverage would be uneconomical

Question 7

Damages awarded to compensate for pain and suffering are called:

Accepted Answer

A) punitive damages 
B) personal injuries 
C) non-bodily injury damages 
D) exemplary damages 
A) punitive damages 
B) personal injuries 
C) non-bodily injury damages 
D) exemplary damages

Question 8

Which of the following reasons for canceling a wedding would likely NOT be covered by a typical wedding insurance policy?

Accepted Answer

A) bride gets food poisoning 
B) church suffers a fire loss the day before the wedding 
C) groom decides he doesn't want to get married 
D) caterer is unable to provide food for the reception 
A) bride gets food poisoning 
B) church suffers a fire loss the day before the wedding 
C) groom decides he doesn't want to get married 
D) caterer is unable to provide food for the reception

Question 9

Foster is suing Geraldine and they are in a contributory negligence state. Foster's total injuries are $100,000,and the jury finds that he was 5% at fault in the incident. How much money will Foster be entitled to collect?

Accepted Answer

A) $100,000 
B) $95,000 
C) $0 
D) $90,000 
A) $100,000 
B) $95,000 
C) $0 
D) $90,000

Question 10

In a negligence lawsuit,jury's primary function is to:

Accepted Answer

A) assist the judge in interpreting the law 
B) determine the facts 
C) decide guilt or innocence 
D) make sure neither plaintiff nor defendant cheats in presenting their case 
A) assist the judge in interpreting the law 
B) determine the facts 
C) decide guilt or innocence 
D) make sure neither plaintiff nor defendant cheats in presenting their case

Question 11

Why is the National Flood Insurance Program (NFIP)not actuarially sound?

Accepted Answer

A) Flood is such a catastrophic peril that no one can ever accurately predict the expected losses 
B) The private insurance market charges rates that are inadequate to fully pay for flood losses 
C) Congress authorized inadequate insurance rates to encourage participation in the program 
D) Congress authorized inadequate insurance rates due to political pressure from elderly Floridians 
A) Flood is such a catastrophic peril that no one can ever accurately predict the expected losses 
B) The private insurance market charges rates that are inadequate to fully pay for flood losses 
C) Congress authorized inadequate insurance rates to encourage participation in the program 
D) Congress authorized inadequate insurance rates due to political pressure from elderly Floridians

Question 12

A person can be found negligent even though his failure to perform some act was unintentional.

Accepted Answer

A) True 
 B)False

Question 13

The "reasonable person" standard changes based upon which one of the following factors?

Accepted Answer

A) the extent and dollar amount of the injury that occurs 
B) the defendant's professional status relative to the event causing the injury 
C) the defendant's criminal record 
D) the insurer's duty to defend the policyholder 
A) the extent and dollar amount of the injury that occurs 
B) the defendant's professional status relative to the event causing the injury 
C) the defendant's criminal record 
D) the insurer's duty to defend the policyholder

Question 14

All of the following are federally-sponsored insurance activities in the U.S.except:

Accepted Answer

A) Social Security 
B) National Flood Insurance Program 
C) Federal Deposit Insurance Corporation 
D) Universal Health for Children Organzation 
A) Social Security 
B) National Flood Insurance Program 
C) Federal Deposit Insurance Corporation 
D) Universal Health for Children Organzation

Question 15

On average,women live longer than men. If an applicant's gender is ignored in determining life insurance prices:

Accepted Answer

A) men will subsidize women 
B) women will subsidize men 
C) no subsidization will occur because only group longevity results are valid 
D) morale hazard will increase significantly 
A) men will subsidize women 
B) women will subsidize men 
C) no subsidization will occur because only group longevity results are valid 
D) morale hazard will increase significantly

Question 16

The 2004 hurricane season caused how much damage in Florida?

Accepted Answer

A) $7 billion 
B) $11 billion 
C) $22 billion 
D) $33 billion 
A) $7 billion 
B) $11 billion 
C) $22 billion 
D) $33 billion

Question 17

The Terrorism Risk Insurance Act of 2002:

Accepted Answer

A) requires that all life and health insurance policies exclude terrorism from coverage 
B) is triggered when the Secretary of Defense certifies than act of terrorism has occurred 
C) requires property and casualty insurers to offer terrorism insurance to all policyholders 
D) expires in the year 2030 
A) requires that all life and health insurance policies exclude terrorism from coverage 
B) is triggered when the Secretary of Defense certifies than act of terrorism has occurred 
C) requires property and casualty insurers to offer terrorism insurance to all policyholders 
D) expires in the year 2030

Question 18

Insured losses ideally should be accidental losses.

Accepted Answer

A) True 
 B)False

Question 19

An insurance pool needs a small group of similar exposures for predictive accuracy.

Accepted Answer

A) True 
 B)False

Question 20

Mrs.Barker has a poodle that she loves very much. The poor little dog is killed in a house fire,and Mrs.Barker asks her homeowners insurance company to pay $100,000 for the loss of the dog. The insurer denies the claim. On what grounds would it be able to do this?

Accepted Answer

A) Too much moral hazard potential exists with the loss of pets 
B) It's impossible to measure, economically, the value of a beloved pet 
C) Animals are never insurable items 
D) The insurer could not legally deny the claim 
A) Too much moral hazard potential exists with the loss of pets 
B) It's impossible to measure, economically, the value of a beloved pet 
C) Animals are never insurable items 
D) The insurer could not legally deny the claim

Exam 2: Defining the Insurable Event

To prove in court that a defendant was negligent,the plaintiff must show all of the following except:

What is adverse selection? Explain why insurers are concerned about adverse selection.

The last clear chance is a modification of the statutory contributory negligence rule.

Given the requisites of an insurable risk,which of the following exposures would make the best subject of a profitable insurance pool? (Assume a premium appropriate to the exposure is charged,and analyze the exposure from an insurer's standpoint.)

Volcanoes have catastrophic loss potential because they are limited in geographic impact.

An insurance applicant dying from cancer is not likely to be insured because:

Damages awarded to compensate for pain and suffering are called:

Which of the following reasons for canceling a wedding would likely NOT be covered by a typical wedding insurance policy?

Foster is suing Geraldine and they are in a contributory negligence state. Foster's total injuries are $100,000,and the jury finds that he was 5% at fault in the incident. How much money will Foster be entitled to collect?

In a negligence lawsuit,jury's primary function is to:

Why is the National Flood Insurance Program (NFIP)not actuarially sound?

A person can be found negligent even though his failure to perform some act was unintentional.

The "reasonable person" standard changes based upon which one of the following factors?

All of the following are federally-sponsored insurance activities in the U.S.except:

On average,women live longer than men. If an applicant's gender is ignored in determining life insurance prices:

The 2004 hurricane season caused how much damage in Florida?

The Terrorism Risk Insurance Act of 2002:

Insured losses ideally should be accidental losses.

An insurance pool needs a small group of similar exposures for predictive accuracy.

Mrs.Barker has a poodle that she loves very much. The poor little dog is killed in a house fire,and Mrs.Barker asks her homeowners insurance company to pay $100,000 for the loss of the dog. The insurer denies the claim. On what grounds would it be able to do this?

Fundamentals and Terminology

Risk Management

Financial Services Companies

Insurance Occupations

the Insurance Market: the Economic Problem

Insurance Regulation

Insurance Contracts

Basic Property and Liability Insurance Contracts

Homeowners Insurance

the Personal Auto Policy

Professional Financial Planning

Life Insurance Policies

Standard Life Insurance Contract Provisions And Options

Annuities

Medical Expense and Disability Insurance

Advanced Topics in Risk Management

Commercial Property Insurance

Commercial Liability Insurance

Bonding,Crime Insurance and Reinsurance

Employee Benefits

Social Security

Unemployment and Workers Compensation Insurance

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