General Insurance Terms

Question 1

Risk

Answer 1

Uncertainty or chance of loss occurring

Question 2

Two Types of Risk

Answer 2

Pure/Speculative Risk

Question 3

I am a “STARR” at Handling Risk

Methods of Handling Risk

Answer 3

Share - risk shared among multiple parties
Transfer - insurance policy (transferred to ins company)
Avoid - avoid activities that lead to risk
Retain - self insurance
Reduce

Question 4

Insurance

Answer 4

The transfer of risk

Question 5

The Law of Large #’s

Answer 5

The more data you have, the more predictable a loss can be

Question 6

Gramm-Leach Bliley Act (GLBA)

Answer 6

Requires financial institutions and insurers protect the privacy of consumer information. Inform clients about privacy policies, allow consumers to opt out of information sharing with 3rd parties.

Question 7

Terrorism Risk Insurance Act (TRIA)

Answer 7

Enacted after 9/11/2001, insurers must offer terrorism coverage for commercial p&c policies, the government will assist when damages due to terrorism go above a specific threshold.