IC47A-1 CASUALTY ACTUARIAL SCIENCE PART 1 - 07
| Q1.The normal state of events is for an individual or entity to retain its exposures to possible loss is known as? |
| a) Contractual transfer to a non-insurer |
| b) Risk retention |
| c) Transfer to an Insurer |
| d) None of these |
| Q2.What has an advantage of reducing the variability in losses from what an individual entity would have if its exposures were not pooled with the exposures of others? |
| a) Reserving |
| b) Collecting |
| c) Reducing |
| d) Pooling |
| Q3.The basic rating unit underlying an insurance premium is called an __. |
| a) Severity |
| b) Frequency |
| c) Credibility |
| d) Exposure |
| Q4.Which of the following statements about the loss Ratio Method of the rate-making process is incorrect? |
| a) Based on premium |
| b) Requires existing rates |
| c) Uses on-level premium |
| d) Produces indicated rates |
| Q5.Which of the following is correct about the Loss Ratio Method? |
| a) Uses on-level premium |
| b) Based on exposure |
| c) Produces indicated rates |
| d) Does not require existing rates |
| Q6.___ is any conscious action intended to reduce the frequency, severity, or unpredictability of accidental losses. |
| a) Risk control |
| b) Risk avoidance |
| c) Rate making |
| d) Risk financing |
| Q7.What may be a desirable rating-variable characteristic and this is one that is under the control of the insured and if the insured moderates behavior in a certain way, premiums will be reduced? |
| a) Controllability |
| b) Considerations |
| c) Causality |
| d) Affordability |
| Q8.Which of the following formulas is correct? |
| a) Assets = Liabilities / Owners' Equity |
| b) Assets = Liabilities * Owners' Equity |
| c) Assets = Liabilities - Owners' Equity |
| d) Assets = Liabilities + Owners' Equity |
| Q9.In the context of risk classification, it usually arises where classification schemes are more refined, with the attendant spreading of rates. thus, high rates are often seen as causing ____ problems. |
| a) Causality |
| b) Considerations |
| c) Controllability |
| d) Affordability |
| Q10.Once an insurer has satisfied its obligation to the policyholder, the company may pursue recoveries from third parties for some part of the indemnity amount paid to the policyholder. This right of recovery is called _____. |
| a) Salvage |
| b) Subrogation |
| c) Loss Development |
| d) None of these |