Cram Sheet 1

Question 1

Speculative Rise

Answer 1

Chance of loss of gain. Not Insurable

Question 2

Pure Risk

Answer 2

Only chance for loss. Will Insure

Question 3

Exposure

Answer 3

Roses for which the insurance company will be liable

Question 4

Peril

Answer 4

Cause of a loss

Question 5

Physical

Answer 5

Hazard can be see

Question 6

Moral

Answer 6

Belief that intentionally causing a loss is acceptable

Question 7

Morale

Answer 7

Carelessness

Question 8

STARR

Answer 8

Sharing, Transfer, Retention, Reduction

Question 9

Law of Large numbers

Answer 9

Larger the group the more accurate losses can be predicted

Question 10

Adverse Selection

Answer 10

Risk with grater than average chance of loss

Question 11

Stock- Insurer

Answer 11

Owned by stockhodlers and shareholders, if company makes money a taxable dividend can be paid

Question 12

Mutual Insurer

Answer 12

Owned by Policyholders

Question 13

Self Insurance

Answer 13

Pays on claims

Question 14

Residual Market

Answer 14

Insurance from state or federal government

Question 15

Certificate of Authority

Answer 15

State license for Insurance Company

Question 16

Concealment

Answer 16

Failure to disclose

Question 17

False or fraud statement

Answer 17

fine or 10-15 year in jail

Question 18

reinsurance

Answer 18

Insurance company purchase company to cover their own exposures

Question 19

surplus lines

Answer 19

Sold by unauthorized insures if state allows. only sold to certain high risk insured