Module 2 Flashcards
A risk handling technique where one shifts the potential for financial harm to another party
Transfer
This is reduced by characteristics of group techniques (group eligibility, a steady flow of lives, a minimum # of persons minimum portion participating, eligibility requirements, max benefit limits, etc)
Risk of Adverse Selection
The type of risk that can have 3 outcomes: loss, no loss, or gain
Speculative Risks
Process in insurance that works to make the victim of a loss whole again
Indemnificiation
A risk handling technique that involves an action or mechanism to reduce the probability or severity of a loss
Control
Behavior such as failure to replace the machine guards on manufacturing equipment is this type of hazard
Physical Hazard
The risk-handling alternative that is mutually exclusive from other riskhandling techniques
Avoidance
A technique in employee that will mitigate the impact of adverse selection if participants were allowed to enroll as individuals
Group Insurance Technique
A risk handing technique where risk is assumed and paid for by the person suffering the loss
Retention
A condition or action that increases the probability that a peril will occur
Hazard
A risk handling technique where the risk is not assumed
Avoidance
When an organization retains the risks related to providing employee benefits as opposed to an insurance company taking on the risks
Self Funding/Self Insurance Approach
With a large number of homogenous units, losses can be verified and measured. Losses should not be catastrophic.
Insurable Risk
Uncertainty of the actual number and value of claims a benefits plan with incur
Risk
A mechanism where the employee or employer pays money into a fund to cover any incurrence of loss
Insurance
The type of risk with only 2 alternatives: financial loss or no financial loss
Pure Risks
When individuals with higher-than-average risks join a group or may comprise a larger percentage of a group than anticipated because they will need and use the benefit
Adverse Selection
The act of not flossing one’s teeth regularly after getting dental insurance is this type of hazard
Morale Hazard
A risk handling technique where the potential for financial loss is shifted to an insurer
Insurance
Administrative overhead costs such as office costs, commission, taxes, licensing taxes, and load adjustments
Loading
A person who shops multiple doctors to get more opioids prescribed is this type of hazard
Moral Hazard
The greater the number of exposures, the more closely the actual results will approach the probable results
Law of Large Numbers
The cause of a loss, such as a fire or car accident
Peril
Transfer
A risk handling technique where one shifts the potential for financial harm to another party
Risk of Adverse Selection
This is reduced by characteristics of group techniques (group eligibility, a steady flow of lives, a minimum # of persons minimum portion participating, eligibility requirements, max benefit limits, etc)
Speculative Risks
The type of risk that can have 3 outcomes: loss, no loss, or gain
Indemnificiation
Process in insurance that works to make the victim of a loss whole again
Control
A risk handling technique that involves an action or mechanism to reduce the probability or severity of a loss
Physical Hazard
Behavior such as failure to replace the machine guards on manufacturing equipment is this type of hazard
Avoidance
The risk-handling alternative that is mutually exclusive from other riskhandling techniques
Group Insurance Technique
A technique in employee that will mitigate the impact of adverse selection if participants were allowed to enroll as individuals
Retention
A risk handing technique where risk is assumed and paid for by the person suffering the loss
Hazard
A condition or action that increases the probability that a peril will occur
Avoidance
A risk handling technique where the risk is not assumed
Self Funding/Self Insurance Approach
When an organization retains the risks related to providing employee benefits as opposed to an insurance company taking on the risks
Insurable Risk
With a large number of homogenous units, losses can be verified and measured. Losses should not be catastrophic.
Risk
Uncertainty of the actual number and value of claims a benefits plan with incur
Insurance
A mechanism where the employee or employer pays money into a fund to cover any incurrence of loss
Pure Risks
The type of risk with only 2 alternatives: financial loss or no financial loss
Adverse Selection
When individuals with higher-than-average risks join a group or may comprise a larger percentage of a group than anticipated because they will need and use the benefit
Morale Hazard
The act of not flossing one’s teeth regularly after getting dental insurance is this type of hazard
Insurance
A risk handling technique where the potential for financial loss is shifted to an insurer
Loading
Administrative overhead costs such as office costs, commission, taxes, licensing taxes, and load adjustments
Moral Hazard
A person who shops multiple doctors to get more opioids prescribed is this type of hazard
Law of Large Numbers
The greater the number of exposures, the more closely the actual results will approach the probable results
Peril
The cause of a loss, such as a fire or car accident
