CHP 28: Accepting Risk

Question 1

When is a Risk Insurable (3,5)

Answer 1

1. Policyholder must an interest in the insured risk
2. Must be financial and of a quantifiable nature
3. Amount payable must bear relationship to the risk

IPPMS
1. Independent: Risks should be independent of each other
2. Low Probability of occurence
3. Pooling of Risks
4. Eliminate Moral Hazard
5. Statistical data should be available to quantify likelihood of occurence