Question 1

If you were a life insurance underwriter,asking which of the following underwriting questions would probably be socially unacceptable to an insurance applicant?

Accepted Answer

A) Have you ever tested positive for HIV 
B) Have you smoked any tobacco products within the last year 
C) Are you heterosexual, homosexual or bisexual 
D) Have you traveled to a foreign country within the last ten years 
A) Have you ever tested positive for HIV 
B) Have you smoked any tobacco products within the last year 
C) Are you heterosexual, homosexual or bisexual 
D) Have you traveled to a foreign country within the last ten years

Question 2

What are the two broad categories of the private insurance industry? Break down the broad categories into their main parts.

Accepted Answer

The private insurance industry is broken

Question 3

A plaintiff will generally collect for negligence when all the following characteristics are present except:

Accepted Answer

A) injury is suffered by the plaintiff 
B) plaintiff breaches a contract with the defendant 
C) breach of duty owed the plaintiff 
D) the breach of the duty caused the injury to the plaintiff 
A) injury is suffered by the plaintiff 
B) plaintiff breaches a contract with the defendant 
C) breach of duty owed the plaintiff 
D) the breach of the duty caused the injury to the plaintiff

Question 4

Credit insurance provides coverage for which of the following parties?

Accepted Answer

A) a lender who is not repaid by borrowers 
B) an investor who experiences stock market losses 
C) a borrower who files for bankruptcy because of a job loss 
D) an employer that loses business because of labor union strikes 
A) a lender who is not repaid by borrowers 
B) an investor who experiences stock market losses 
C) a borrower who files for bankruptcy because of a job loss 
D) an employer that loses business because of labor union strikes

Question 5

Res ipsa loquitur means "the thing speaks for itself."

Accepted Answer

A) True 
 B)False

Question 6

Which of the following is not an example of a speculative risk?

Accepted Answer

A) purchase of an insurance policy 
B) investment in common stocks 
C) operating a business for profit 
D) investment in banana futures 
A) purchase of an insurance policy 
B) investment in common stocks 
C) operating a business for profit 
D) investment in banana futures

Question 7

In a world without underwriting,insurance would become __________ because of _____________.

Accepted Answer

A) unfeasible; adverse selection 
B) unfeasible; homogeneity of exposures 
C) inexpensive; adverse selection 
D) prohibitively expensive; moral hazard 
A) unfeasible; adverse selection 
B) unfeasible; homogeneity of exposures 
C) inexpensive; adverse selection 
D) prohibitively expensive; moral hazard

Question 8

The use of an applicant's personal opinions by underwriters for rating criteria directly violates which guiding principle of underwriting?

Accepted Answer

A) separation and class homogeneity 
B) reliability 
C) incentive value 
D) social acceptability 
A) separation and class homogeneity 
B) reliability 
C) incentive value 
D) social acceptability

Question 9

One reason insurable losses must be definite is to allow measurability of the losses

Accepted Answer

A) True 
 B)False

Question 10

Adverse selection results in which of the following?

Accepted Answer

A) no underwriting is necessary 
B) applicants for insurance have a higher probability of loss than the average group of insureds 
C) the federal government must write the insurance 
D) better insureds are attracted to the group 
A) no underwriting is necessary 
B) applicants for insurance have a higher probability of loss than the average group of insureds 
C) the federal government must write the insurance 
D) better insureds are attracted to the group

Question 11

From the viewpoint of an insurer,the prerequisites of an ideally insurable risk include all the following except:

Accepted Answer

A) the loss must be capable of being determined and measured 
B) there must be a large, homogeneous group of exposure units 
C) the loss should not be subject to catastrophic hazard 
D) the peril should be such that the probability of loss is high 
A) the loss must be capable of being determined and measured 
B) there must be a large, homogeneous group of exposure units 
C) the loss should not be subject to catastrophic hazard 
D) the peril should be such that the probability of loss is high

Question 12

If insurers didn't practice underwriting,what would happen?

Accepted Answer

A) They would save a lot of time and money by not asking all those nosey questions 
B) They would make a handsome profit since they would get to sell a lot of insurance to a lot of people 
C) The insurance mechanism would become unfeasible 
D) The insurance mechanism would become the largest money making venture in the United States 
A) They would save a lot of time and money by not asking all those nosey questions 
B) They would make a handsome profit since they would get to sell a lot of insurance to a lot of people 
C) The insurance mechanism would become unfeasible 
D) The insurance mechanism would become the largest money making venture in the United States

Question 13

How did the 2005 hurricane season compare to the 2004 hurricane season in terms of resulting damages?

Accepted Answer

A) 2005 was much worse than 2004 
B) 2005 was much better than 2004 
C) 2005 and 2004 were about the same in terms of hurricane damage 
D) None of the above. 
A) 2005 was much worse than 2004 
B) 2005 was much better than 2004 
C) 2005 and 2004 were about the same in terms of hurricane damage 
D) None of the above.

Question 14

Catastrophic losses are not insured by the private insurance industry because:

Accepted Answer

A) if a truly catastrophic loss occurs, it can threaten the solvency of the insurer 
B) catastrophic losses can result from an individual's moral hazard 
C) the federal government wants to insure catastrophic losses 
D) the losses require foreign reinsurance companies to operate in the U.S. 
A) if a truly catastrophic loss occurs, it can threaten the solvency of the insurer 
B) catastrophic losses can result from an individual's moral hazard 
C) the federal government wants to insure catastrophic losses 
D) the losses require foreign reinsurance companies to operate in the U.S.

Question 15

Which of the following is NOT a tort?

Accepted Answer

A) Battery 
B) Assault 
C) Negligence 
D) Breaking a contractual agreement 
A) Battery 
B) Assault 
C) Negligence 
D) Breaking a contractual agreement

If you were a life insurance underwriter,asking which of the following underwriting questions would probably be socially unacceptable to an insurance applicant?

What are the two broad categories of the private insurance industry? Break down the broad categories into their main parts.

A plaintiff will generally collect for negligence when all the following characteristics are present except:

Credit insurance provides coverage for which of the following parties?

Res ipsa loquitur means "the thing speaks for itself."

Which of the following is not an example of a speculative risk?

In a world without underwriting,insurance would become because of ___.

The use of an applicant's personal opinions by underwriters for rating criteria directly violates which guiding principle of underwriting?

One reason insurable losses must be definite is to allow measurability of the losses

Adverse selection results in which of the following?

From the viewpoint of an insurer,the prerequisites of an ideally insurable risk include all the following except:

If insurers didn't practice underwriting,what would happen?

How did the 2005 hurricane season compare to the 2004 hurricane season in terms of resulting damages?

Catastrophic losses are not insured by the private insurance industry because:

Which of the following is NOT a tort?

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

Filters

Exam 2: Defining the Insurable Event

If you were a life insurance underwriter,asking which of the following underwriting questions would probably be socially unacceptable to an insurance applicant?

What are the two broad categories of the private insurance industry? Break down the broad categories into their main parts.

A plaintiff will generally collect for negligence when all the following characteristics are present except:

Credit insurance provides coverage for which of the following parties?

Res ipsa loquitur means "the thing speaks for itself."

Which of the following is not an example of a speculative risk?

In a world without underwriting,insurance would become __________ because of _____________.

The use of an applicant's personal opinions by underwriters for rating criteria directly violates which guiding principle of underwriting?

One reason insurable losses must be definite is to allow measurability of the losses

Adverse selection results in which of the following?

From the viewpoint of an insurer,the prerequisites of an ideally insurable risk include all the following except:

If insurers didn't practice underwriting,what would happen?

How did the 2005 hurricane season compare to the 2004 hurricane season in terms of resulting damages?

Catastrophic losses are not insured by the private insurance industry because:

Which of the following is NOT a tort?

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

Filters

In a world without underwriting,insurance would become because of ___.