ALU 201 Practice Test – Questions With Definite
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Terms in this set (37)
Written underwriting guidelines are They are relied upon heavily by both the ceding
the key documents that direct the company and reinsurance pricing actuaries to
course of the underwriting process. establish the criteria and direction of profitable
selection of risks.
cost-benefit studies provide objective evidence needed to
evaluate the cost-effectiveness of an underwriting
requirement in particular or the underwriting process
in general.
The most common complications in 1.hepatic steatosis, which occurs in 90% of heavy
the liver include: drinkers2.alcoholic hepatitis (10-35%) 3.cirrhosis (10-
20%).
In the early to middle 1980s, blood Human Immunodeficiency Virus (HIV).
testing gained more widespread use
in the life insurance industry to help
detect proposed insureds infected
with:
asset risk The risk that the assets supporting the product line
lose some or all of their value.
business risk This is a "catch-all" category of risk management to
cover anything not specifically included in the C1, C2
or C3 category.
, insurance risk The risk that the price for the insurance product
provided is inadequate. This could occur primarily
from the mis-estimation of the underlying expected
mortality or the introduction of a risk not
contemplated when the product was priced (e.g., an
influenza epidemic, HIV infection or any other
mortality event that materially changes the
expectations of the underlying mortality curve).
interest rate risk The risk that assets must be sold at a loss in order to
meet the cash needs of a policyholder. This risk (and
the management of it) has precipitated a significant
amount of industry work aimed at matching the
liability cash flows of a product with the cash flows of
the invested assets. This risk management process is
known as asset/liability management (or ALM).
revocable or inter vivos trust is a type of living trust, and is set
up before the death of the grantor. It provides
several advantages to the grantor, but no estate tax
savings.
inter-vivos aka revocable trust
generation skipping trust (gst) void the costs of repeated estate tax payments that
occur when assets are transferred through
successive generations (with each transfer being
subject to a separate estate tax) and also addresses
any concerns the grantor may have about the effect
that unearned wealth might have on the character of
his or her descendents.
Charitable trusts are public trusts and may hypothetically exist for an
unlimited period because they serve the betterment
of society, and not a specific individual or a small
group. irrevocable and must not name a specific
individual(s) but instead a class of beneficiaries.
Solutions
Save
Terms in this set (37)
Written underwriting guidelines are They are relied upon heavily by both the ceding
the key documents that direct the company and reinsurance pricing actuaries to
course of the underwriting process. establish the criteria and direction of profitable
selection of risks.
cost-benefit studies provide objective evidence needed to
evaluate the cost-effectiveness of an underwriting
requirement in particular or the underwriting process
in general.
The most common complications in 1.hepatic steatosis, which occurs in 90% of heavy
the liver include: drinkers2.alcoholic hepatitis (10-35%) 3.cirrhosis (10-
20%).
In the early to middle 1980s, blood Human Immunodeficiency Virus (HIV).
testing gained more widespread use
in the life insurance industry to help
detect proposed insureds infected
with:
asset risk The risk that the assets supporting the product line
lose some or all of their value.
business risk This is a "catch-all" category of risk management to
cover anything not specifically included in the C1, C2
or C3 category.
, insurance risk The risk that the price for the insurance product
provided is inadequate. This could occur primarily
from the mis-estimation of the underlying expected
mortality or the introduction of a risk not
contemplated when the product was priced (e.g., an
influenza epidemic, HIV infection or any other
mortality event that materially changes the
expectations of the underlying mortality curve).
interest rate risk The risk that assets must be sold at a loss in order to
meet the cash needs of a policyholder. This risk (and
the management of it) has precipitated a significant
amount of industry work aimed at matching the
liability cash flows of a product with the cash flows of
the invested assets. This risk management process is
known as asset/liability management (or ALM).
revocable or inter vivos trust is a type of living trust, and is set
up before the death of the grantor. It provides
several advantages to the grantor, but no estate tax
savings.
inter-vivos aka revocable trust
generation skipping trust (gst) void the costs of repeated estate tax payments that
occur when assets are transferred through
successive generations (with each transfer being
subject to a separate estate tax) and also addresses
any concerns the grantor may have about the effect
that unearned wealth might have on the character of
his or her descendents.
Charitable trusts are public trusts and may hypothetically exist for an
unlimited period because they serve the betterment
of society, and not a specific individual or a small
group. irrevocable and must not name a specific
individual(s) but instead a class of beneficiaries.
