Sections 3 & 4 (99 pts)

Question 1

Advantages & Disadvantages of Guaranteed Cost Plans

Answer 1

section 3

Question 2

2 types of Retrospectively Rated Plans

Answer 2

loss paid retro plan

& incurred retro plan

Question 3

what must be done to get Qualified Self Insurance Plan?

Answer 3

request approval for certificate of authority to be a self-insured entity. must hire actuarial to determine sufficient reserves and fund balance, and in most cases purchase excess insurance coverage.

Question 4

role of a risk manager

Answer 4

identify, assess, and direct the strategy to address potential risks that my impact the safety, security, financial standing, and reputation of the organization

Question 5

what are the methods to select an insurance provider

Answer 5

• appointment
• RFP
• Conceptual Bidding
• Open Bidding

Question 6

general considerations when using a RFP

Answer 6

Identification of the parties & intro
Description of project or service
Requirements
Timeline
Costs
Legal matters
Post-contract activities

Question 7

define and describe the role and focus of claims management

Answer 7

• role: promptly resolve losses which are subject to insurance or an active retention program, including claims by other individuals or entities.
• focus: gathering & utilizing claims data to improve business performance. enforcing contractual obligations such as insurance cert requirements. mitigating damages after a loss. settling claims for lowest reasonable dollar. identifying and combatting fraud, managing claims reserving (setting & reviewing)

Question 8

describe the roles and focus of actuarial services

Answer 8

• assure the organization that ins premiums and retentions are appropriate.
• provide analytical tools to assess and benchmark your organization against others.
• make loss projections used for forecasting and budgeting.
• evaluate the ultimate value of losses, the key components of loss sensitive risk financing programs
• provide statements of actuarial opinion

Question 9

considerations when hiring an insurance provider

Answer 9

• location
• expertise
• staff
• chemistry of relationship
• # of similar accounts
• licensing for lines & states
• representation of sufficent # of insurers w acceptable ratings
• services offered
• proof of E&O
• references
• commissions, fees, compensation transparency

Question 10

things to consider before making changes to a companies risk financing program

Answer 10

• exposures & risk
• impact to current staff
• budget
• timeframe
• how long needed for
• delivery expectations
• service level expectations

Question 11

when are premiums deductible

Answer 11

• the year paid (cash basis organization)
• OR pro rata over the policy term (accrual basis)
• OR as losses paid

Question 12

what determines premium deductibility

Answer 12

-risk of loss must be transferred to an independent third party
AND
-policies or contracts must shift significant risk
-must meet basic minimum criteria of 10%, probability of loss of at least 110% of premium