C120 IIC Application/Narrative Questions Flashcards - CH.1-9 The line guide specifies the criteria that an underwriter must consider when accepting or rejecting a risk. List FIVE (5) of the areas the underwriter should consider when making a decision - ✔✔• Licensing • Types of business • Lines of business • Territory • Capacity • Reinsurance • Pricing When assessing a risk, what questions does an underwriter explore before making a decision? - ✔✔• Length of time in business? • Type of loss? • Perils? • Physical hazards? • Moral hazard? Explain the difference between pure risk and speculative risk. List the types of insurable risks - ✔✔• Pure risk is a risk that entails a chance of loss but no chance of profit • Speculative risk is a risk where there is a chance of loss and a chance of profit • Types of insurable risks o Personal risks o Property risks o Liability risks Kumar purchases a compact SUV. He has been driving for more than 12 years and has a clean record. Kumar has been working at his job for 18 months, and the SUV is his first big purchase. He rents an apartment in a high-traffic neighbourhood that has seen a spike in crime and accidents over the past few years. Being an owner of a new automobile and living in a high-crime, high- accident neighbourhood puts Kumar at risk of financial loss arising out of a collision or theft. a. What is the underwriter's responsibility in assessing Kumar as a risk? - ✔✔. Underwriter's assessment • Driving record • Past losses • Financial stability • Length of time at residence • Length of time at job (employment) Kumar purchases a compact SUV. He has been driving for more than 12 years and has a clean record. Kumar has been working at his job for 18 months, and the SUV is his first big purchase. He rents an apartment in a high-traffic neighbourhood that has seen a spike in crime and accidents over the past few years. Being an owner of a new automobile and living in a high-crime, high- accident neighbourhood puts Kumar at risk of financial loss arising out of a collision or theft. b. What kind of risk does this represent for Kumar, and how might it affect him? - ✔✔Type of risk for Kumar • Being the owner of an automobile, there is always a chance of a collision and that is a pure risk • There could be a risk of injury to Kumar • There could be incurred medical costs • There could be a loss of wages due to lost time at work • The vehicle could be damaged or destroyed Kumar purchases a compact SUV. He has been driving for more than 12 years and has a clean record. Kumar has been working at his job for 18 months, and the SUV is his first big purchase. He rents an apartment in a high-traffic neighbourhood that has seen a spike in crime and accidents over the past few years. Being an owner of a new automobile and living in a high-crime, high- accident neighbourhood puts Kumar at risk of financial loss arising out of a collision or theft.
read moreLoading sample please wait !
Barmerit customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
You can quickly pay through credit card or Barmerit-credit for the summaries. There is no membership needed.
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Price $10.50
