General Insurance Essentials - C81 + C82 EXAM (updated 2026)
Questions & Answers | Latest Already Graded A+
What is the duty of a risk manager?
Identifying loss exposures
Which type of professional would be responsible for educating other corporate
managers about risk and acting as a resource to other managers, in much the
same way as a broker would for a small business client?
Risk Manager
A small, popular coffee shop is severely damaged by fire.Which party has
insurable interest in the coffee shop?
bank that holds a mortgage on the building in which the coffee shop is located
How can insurance be an aid to credit?
Because it is virtually impossible to obtain credit without having insurance on the
item concerned
How can insurance be an aid to security?
By substituting a certain premium payment in place of an uncertain loss payment
How can risk be spread?
By volume, diversity of risks, and diversity of location
,What does a broker do?
Acts on behalf of an insured in placing business with insurance companies
What does it mean to indemnify?
To provide compensation for loss or expenses incurred
What is the premium?
The price of insurance protection for a specified risk for a specified period of
time
What is the specific risk covered by life insurance?
The death of the insured
What type of insurance covers goods in transit on land?
Inland transportation
What concept upholds the principle of indemnity?
Insurable Interest
What 3 departments are unique to insurance companies?
Actuarial, claims, and underwriting
,What is facultative reinsurance?
Reinsurance of risks on an individual case-by-case basis subject to acceptance
or rejection by the insurer (the opposite of Treaty reinsurance)
What is subscribed capital?
The amount of stock sold by a corporation
What is the basic task of an underwriting department?
Select risks to insure
What is the term used when an insurance company re-insures its liability with
another insurance company?
Cession
What is treaty insurance?
Reinsurance in which an agreement between the insurer and the reinsurer provides
for automatic reinsurance without the insurer having to submit every risk to the
reinsurer.
(opposite of faculative reinsurance)
What is underwriting profit?
The amount of money an insurance company gains as a result of its insurance
operations
, what math term relates to the degree of certainty in predicting future losses?
the law of large numbers
Describe mutual insurance companies
They are based on the principle of mutual aid, where each policyholder is a
member.
Describe stock companies
They are companies whose main purpose is making a profit for shareholders.
Questions & Answers | Latest Already Graded A+
What is the duty of a risk manager?
Identifying loss exposures
Which type of professional would be responsible for educating other corporate
managers about risk and acting as a resource to other managers, in much the
same way as a broker would for a small business client?
Risk Manager
A small, popular coffee shop is severely damaged by fire.Which party has
insurable interest in the coffee shop?
bank that holds a mortgage on the building in which the coffee shop is located
How can insurance be an aid to credit?
Because it is virtually impossible to obtain credit without having insurance on the
item concerned
How can insurance be an aid to security?
By substituting a certain premium payment in place of an uncertain loss payment
How can risk be spread?
By volume, diversity of risks, and diversity of location
,What does a broker do?
Acts on behalf of an insured in placing business with insurance companies
What does it mean to indemnify?
To provide compensation for loss or expenses incurred
What is the premium?
The price of insurance protection for a specified risk for a specified period of
time
What is the specific risk covered by life insurance?
The death of the insured
What type of insurance covers goods in transit on land?
Inland transportation
What concept upholds the principle of indemnity?
Insurable Interest
What 3 departments are unique to insurance companies?
Actuarial, claims, and underwriting
,What is facultative reinsurance?
Reinsurance of risks on an individual case-by-case basis subject to acceptance
or rejection by the insurer (the opposite of Treaty reinsurance)
What is subscribed capital?
The amount of stock sold by a corporation
What is the basic task of an underwriting department?
Select risks to insure
What is the term used when an insurance company re-insures its liability with
another insurance company?
Cession
What is treaty insurance?
Reinsurance in which an agreement between the insurer and the reinsurer provides
for automatic reinsurance without the insurer having to submit every risk to the
reinsurer.
(opposite of faculative reinsurance)
What is underwriting profit?
The amount of money an insurance company gains as a result of its insurance
operations
, what math term relates to the degree of certainty in predicting future losses?
the law of large numbers
Describe mutual insurance companies
They are based on the principle of mutual aid, where each policyholder is a
member.
Describe stock companies
They are companies whose main purpose is making a profit for shareholders.
