Module 6

Question 1

are companies that provide
coverage on assets (e.g., house, car, etc.) and also liability insurance for
accidents, injuries, and damage to other people or their belongings.

Answer 1

property and casualty insurers

Question 2

Property and Casualty Insurers Focus on Risks That Result in Losses To
Property and Possessions. Examples Include:

Answer 2

Auto insurance
Home insurance
Marine insurance
Worker’s compensation insurance
Professional liability insurance
Cyber liability insurance
Event liability insurance
Contractor’s liability insurance

Question 3

protects contractors and construction professionals from liability claims related to their work or construction projects. It covers bodily injury, property damage, and other risks in the
construction industry.

Answer 3

contractor’s liability insurance

Question 4

offers coverage for liability claims arising from events, such as concerts, conferences, weddings, or sports events. It
protects event organizers from potential lawsuits and other liability risks from the occurrences planned for that specific event.

Answer 4

event liability insurance

Question 5

provides coverage for losses resulting from cyber
incidents such as data breaches, hacking, cyber extortion, or business
interruption due to cyberattacks. It helps businesses manage the financial and reputational risks of cyber threats should sensitive information be
stolen.

Answer 5

cyber liability insurance

Question 6

covers businesses against liability claims arising from injuries or damages caused by their products.

Answer 6

product liability insurance

Question 7

also known as errors and omissions
(E&O) insurance, protects professionals from claims of negligence, errors,
or omissions in their services. It is commonly used by doctors, lawyers,
architects, and other professional service providers.

Answer 7

professional liability insurance

Question 8

provides benefits to employees who suffer work-related injuries or illnesses. It covers medical expenses, lost wages, and rehabilitation costs. Workers’ compensation also protects
employers from liability for workplace injuries.

Answer 8

worker’s compensation insurance

Question 9

Covering losses to shipping vehicles.

Answer 9

marine insurance

Question 10

Covering losses to residences and property arising from extreme weather,
fire, theft, or other incidents. In addition, covering liability to third parties
from actions by the insured.

Answer 10

home insurance

Question 11

Covering losses to individuals and properties arising from auto accidents
and other unforeseen auto events.

Answer 11

auto insurance

Question 12

The assets of an insurance company are primarily

Answer 12

financial asset

Question 13

Permanent life insurance policies develop a saving element over time
called

Answer 13

cash value

Question 14

is a separate set of financial statements held by a
life insurance company, maintained to report assets and liabilities for specific
products that are separated from the insurer’s general account.

Answer 14

separate account

Question 15

are a liability item on the balance sheet must be offset by assets equal to the
amount.

Answer 15

policy reserve

Question 16

is a statutory account designed to absorb asset value fluctuations not caused by
changing interest rate.

Answer 16

the asset valuation reserve

Question 17

Is a liability that represents fund owed to policyholders and to beneficiaries.

Answer 17

The reserve amount helds ok deposit

Question 18

is the difference between a life insurer’s total assets and total liabilities.

Answer 18

policy holders surplus

Question 19

Refers to the process of determining the rates or premiums to be charged
for insurance policies.

Answer 19

ratemaking

Question 20

In property and casualty insurance, there are three basic rate-making
methods:

Answer 20

Judgement Rating
Class Rating
Merit Rating

Question 21

This method is used when the factors that determine potential losses are varied and cannot be statistically analyzed. It involves the individual assessment of
each exposure unit, and the rate is determined based on the underwriter’s judgment.

Answer 21

Judgement Rating

Question 22

Also known as manual rating, this method involves placing exposures with similar
characteristics in the same underwriting class and charging each the same rate.
It offers easy application and the ability to quickly obtain rates.

Answer 22

Class Rating

Question 23

This method involves adjusting class or manual rates based on the loss experience of the insured. It aims to encourage loss control activities by adjusting rates according to the insured’s loss experience.

Answer 23

Merit Rating

Question 24

The general insurance sector in the Philippines is projected to grow, with property insurance being the leading line, estimated to account for

Answer 24

36.8%

Question 25

The rate-making process in property and casualty insurance in the Philippines is
influenced by several factors, including the following:

Answer 25

-Reinsurance and Cession Ratios
-Economic Conditions and Demand for Insurance
-Regulatory environment and market conduct regulation
-Competition and Underwriting Performance
-Inflation and Claims Costs

Question 26

provides financial protection for loved ones should the policyholder die. Once a
policy is issued, an insurer may not cancel it based on a change in the policyholder’s health status.

Answer 26

Life insurance

Question 27

provides coverage over a specified period of time. Typically, term insurance policies are written for 1, 5, 10, or 20 years, or to a specified age (such as 65). Term policies only pay a death benefit to the beneficiary if the policyholder dies during the specified term and so is a good choice when the policyholder needs protection for a temporary time or a specific need.

Answer 27

Term life insurance