Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

General Insurance > General Insurance > Flashcards

General Insurance Flashcards

1
Q

A contract that transfers risk from one party to another.

A

Insurance.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

The uncertainty that a loss will occur.

A

Risk.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Chance of loss or gain.

A

Speculative risk.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Only chance of loss.

A

Pure risk.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Reduction in value of an asset.

A

Loss.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Risks an insurance company is liable for and the amount the insurer must pay out.

A

Exposure.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

The cause of a loss.

A

Peril.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Anything that increases the risk that a loss will occur.

A

Hazard.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

What type of hazard? Wet floor.

A

Physical hazard.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

What type of hazard? Dishonesty.

A

Moral hazard.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

What type of hazard? Attitude or state of mind.

A

Morale hazard.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Two or more individuals agree to share a portion of a loss.

A

Sharing.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Risk moves from insured to insurer.

A

Transfer.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Elimination of anything risky or dangerous by avoiding it.

A

Avoidance.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Paying for a loss out of your own assets.

A

Retention.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Reducing the likelihood of loss.

A

Reduction.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

A principle that makes insurance companies profitable. The larger the number, the less uncertainty there will be about the risk.

A

Law of large numbers.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

What makes an insurable risk?

A

CANHAM: A risk must be Calculable, Affordable, Non-catastrophic, Homogenous, Accidental, and Measurable.

19
Q

The tendency of higher-risk individuals to get and keep insurance more often and for longer than an average individual.

A

Adverse selection.

20
Q

Insurance for an insurance company.

A

Reinsurance.

21
Q

Coverage purchased by a primary insurer to cover a single risk—or a block of risks—held in the primary insurer’s book of business.

A

Facultative reinsurance.

22
Q

Reinsurer agrees to cover all risks, even though the reinsurer hasn’t performed individual underwriting for each policy.

A

Treaty reinsurance.

23
Q

An insurance company owned by its stockholders/shareholders. A board of directors oversees it. Any profit is paid as a dividend to the stockholders. Non-participating policy.

A

A stock company.

24
Q

An insurance company without stockholders. Owned by policyowners/policyholders. Dividends are paid to the policyholders. Participating policy.

A

A mutual company.

25
Q

An unincorporated group of people who agree to insure each other’s losses under a contract.

A

A reciprocal insurer.

26
Q

A group where the insurance company is formed for the sole purpose of providing liability insurance for its policyholders. It is owned by insureds and must be in the same type of business.

A

Risk retention group (RRG).

27
Q

Not an insurance company, but an underwriting group.

A

Lloyd’s Association.

28
Q

Retention of risk by not transferring to any other party. Money needs to be set aside to pay for one’s own losses.

A

Self-insurers.

29
Q

Insurance purchased from an insurance company.

A

Private insurance.

30
Q

State or federal insurance benefits. Social Security, military life, federal employee benefits, retirement benefits, flood insurance, crop losses, workers’ compensation, insurance for the needy, etc.

A

Government insurance.

31
Q

An insurance company based in its home state.

A

Domestic.

32
Q

An insurance company based in a state other than its home state.

A

Foreign.

33
Q

An insurance company based in a country other than the U.S. and its territories.

A

Alien.

34
Q

License an insurance company must have in order to sell in their state.

A

Certificate of authority.

35
Q

When an insurance company has a certificate of authority, they are considered a(n):

A

Authorized company.

36
Q

When an insurance company doesn’t have a certificate of authority, they are considered a(n):

A

Non-admitted company.

37
Q

Insurers represented by non-admitted companies and provide insurance for an extremely high risk.

A

Surplus lines insurers.

38
Q

An agent that sells for multiple companies.

A

Independent agent.

39
Q

An agent that only sells for one company.

A

Exclusive/captive agent.

40
Q

An agent that recruits, hires, trains, etc. other agents to sell insurance under them.

A

General agent/managing general agent (MGA).

41
Q

A company that pays salaries to employees who sell for the company.

A

Direct writing company.

42
Q

Marketing without an agent. Usually done via mail, TV, newspaper advertising, Internet ads, etc.

A

Direct response marketing.

43
Q

Where one person acts on behalf of someone else.

A

Agency.

44
Q

Authority written in a contract.

A

Express authority.

General Insurance (1 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions