C81 Chapter 1, 2, 3 Flashcards
What are the 4 pre loss objectives of risk management
social responsibility, externally imposed obligations, peace of mind, cost of risk
what are the post-loss objectives of risk management
social responsibility, survival, operational continuity, stable earnings, sustained growth
what are the elements of loss
APE: assets, perils, economics
what are the 5 steps of risk management process
identifying and analyzing exposures, formatting options, selecting the best techniques, implementing the risk management plan, monitoring results and modification
What are the three types of perils
human natural and economic
what are the five ways to control loss in risk management
SNALL; separation or diversify, non-insurance loss control transfer, avoidance, loss prevention, loss reduction
captive insurance company
an insurance company that provides insurance to, and is controlled by its owners.
Hold Harmless Agreement
allows one party to protect another party against any future losses that my result from a particular activity, also called indemnity agreement
proximate cause
initial thing to cause a change of events
immediate cause
the last event leading to the cost/loss
remote cause
cause unrelated to chain of events
general insurance is also referred to as
property and casualty insurance.
how is actual cash value calculated
cost to repair or replace less any depreciation, fair market value, consideration of evidence of the value of the damaged property.
What are the functions of insurance
Salsas: spread of risk, aid to security, loss prevention, source of capital, aid to credit, source of employment
what are the three basic groups of insurers
organizations; operating for the profit of their owners stock companies. Co-operative organizations operating for the benefit of the their members only. Government insurance organizations which can take the form of a government.
Stock insurance companies achieve profit from two main sources
interests on investments, and underwriting gain
What are the three types of mutals
note mutual: founded on principle of mutual aid. Factory mutual: operates for members, initially only for factories. and stock mutuals: mutual with shareholders and operates for a profit.
what departments are common to only insurance companies
actuarial, claims, and underwriting.
Lloyd’s of London
insurance market for special items, large items, or celebrity body parts…
syndicate
managed by agent and takes on the risk of special items in the Lloyd’s of London market.
reinsurance
when an insurer shares risk with another insurer
cession
that which is ceded, or given up to be insured
retention
the risk that is kept
a reinsurer
the one that takes on a risk of another insurer
