module 1&2

Question 1

A person or organization that processes claims and performs other administrative services in accordance with a service contract, usually in the field of employee benefits

Answer 1

Third Party Administrator (TPA)

Question 2

For a given group of insureds, the number and timing of covered losses that will occur in that group

Answer 2

Mortality Tables

Question 3

Remuneration paid to an employee over a tax year as money or an equivalent arising from employment, subject to certain deductions, exemptions and tax credits

Answer 3

Employee Income

Question 4

Any arrangement under which an employer contributes to another person and under which payments are made to or for the benefit of employees or former employees

Answer 4

Employee Benefit Plan

Question 5

Individuals with similar risk characteristics grouped to determine average experience for the purpose of setting prices

Answer 5

Risk Classification

Question 6

The activities of plan design, plan administration, and plan funding

Answer 6

Plan Management

Question 7

A document which indicates the rights and obligations of all parties

Answer 7

Code of Ethics (CLHIA-Canadian Life and Health Insurance Association)

Question 8

Risk arising from the possibility of death, poor health, or outliving one’s savings (person)

Answer 8

Personal Risk

Question 9

A non-insurance transfer of risk arrangement that includes a hold harmless agreement exempting a party from liability it would otherwise be responsible for.

Answer 9

Indemnity Agreement/Clause

Question 10

The tendency of individuals with a greater-than-average likelihood of loss to seek insurance protection to a greater extent than those with an average or less-than-average likelihood of loss

Answer 10

Substandard (Impaired) Risk

Question 11

A type of insurance contact where the amount payable when a loss occurs is specified in advance, regardless of the actual amount of the loss.

Answer 11

Valued Contract

Question 12

Any individual who is eligible to be insured under the master contract

Answer 12

Plan Member

Question 13

A legally binding document outlining the insurance arrangement between an insurer and the group contact holder

Answer 13

Master Contact or Policy

Question 14

A minimum amount of capital an insurer is required to hold in case actual payouts differ significantly from expected payouts due to events beyond insurers control

Answer 14

Minimum Continuing Capital and Surplus Requirement (MCCSR)

Question 15

The organization that provides a plan to a group

Answer 15

Plan sponsor

Question 16

The spouse or children of a plan member

Answer 16

Dependents

Question 17

A type of contact in which the insurer continues to pay claims as long as the plan sponsor makes premium payments according to the terms of the group contract

Answer 17

Unilateral Contract

Question 18

A request for a group insurance coverage by a prospective contract holder

Answer 18

Master Application

Question 19

The process by which the insurer evaluates the risk of the plan, makes decisions about its acceptability for insurance, establishes premium rating basis, and prices plan accordingly

Answer 19

Underwriting

Question 20

The document used in a MEP arrangement for employers not bound by the collective agreement/ when the collective agreement does not specify particular contributions to the trust fund

Answer 20

MEP Participation Agreement

Question 21

A regulatory requirement for financial soundness

Answer 21

OSFI

Office of the Superintendent of Financial Institutions

Question 22

Plans offered to employers in the same industry or type of business or to individuals in the same profession

Answer 22

Association of Employers

Question 23

A type of risk that is assumed as a conscious choice, with three possible outcomes: loss, gain, or no change

Answer 23

Speculative Risk

Question 24

The Plan Sponsor organization (eg employer) that enters into the group insurance contract.

Answer 24

Group Policyholder

Question 25

The amount a Policyholder must pay for a certain amount of insurance coverage.

Answer 25

Premium

Question 26

Regulatory requirements addressing incorporation, governance and investment management.

Answer 26

Insurance Companies Act (ICA)

Question 27

A physical characteristic or condition of the proposed insured that may increase the possibility of a loss.

Answer 27

Physical Hazard

Question 28

The net income that results from a business subject to deductions for the costs of doing business including benefit costs.

Answer 28

An Employer’s Income

Question 29

Categories of individuals whom a plan sponsor may want to consider protecting under its group benefits plan.

Answer 29

Classification

Question 30

Interest, dividends, and capital gains, less certain deductions.

Answer 30

Trust fund income

Question 31

The amount of money available to the plan to provide benefits to plan members and cover the costs of administering the plan.

Answer 31

Funding Sources

Question 32

Plans available to individuals to insure their outstanding debt (e.g. mortgages, lines of credit)

Answer 32

Creditor Plans

Question 33

Determination of who assumes the financial liability for paying claims expenses and whether to insure or self-insure benefits.

Answer 33

Funding Arrangement

Question 34

Plans with the most prevalent type of plan sponsor

Answer 34

Single - Employer Plans

Question 35

Plans covering employees working under the terms of a collective agreement

Answer 35

MEP

Multi-Employer Plan

Question 36

Risk that is related to events outside the risk taker’s control, with loss as the only possible outcome.

Answer 36

Pure Risk

Question 37

A document that establishes the terms and conditions for management of a trust and empowers trustees to make decisions related to trust operations.

Answer 37

Trust Agreement

Question 38

Individuals or companies that provide advice to group benefits plan sponsors.

Answer 38

Advisor

Question 39

When the reputation, financial position, or criminal record of a proposed insured indicates that dishonest action in the insurance transaction increases the possibility of a loss.

Answer 39

Moral Hazard

Question 40

Any type of plan that provides benefits to the plan members as one group independent of government-sponsored benefits.

Answer 40

Group benefits plan

Question 41

The process of measuring risk, exposure, deciding whether to accept and insure the applicant, and determining how much coverage to provide and premium to charge.

Answer 41

Underwriting

Question 42

The amount payable by the insurer to a claimant, assignee, or beneficiary when the insured suffers a loss covered by the policy.

Answer 42

Benefit