SC PROPERTY, CASUALTY, SURETY, MARINE
EXAM
Principal - ANSWERS-The principal refers to an agent's employer (usually an
insurance company, but it could also mean anyone who contracts the agent to
work on their behalf and gives her the authority to do so). 2-A
Principle of Indemnity - ANSWERS-The principle behind all insurance contracts. It
states that, when a loss occurs, the insured should be restored to his or her
financial condition before the loss occurred, no better, no worse. The insured
cannot profit from a loss. 1-A
Privacy - ANSWERS-In insurance, the right of consumers to have their personal
information protected. 6-E
Private - ANSWERS-Private insurance is the term for any insurance other than
social insurance. Social insurance programs are run by the government instead of
by private individuals. 1-C
Private Crop Insurance - ANSWERS-Crop insurance that does not fall under the
Federal Crop Insurance Program and is provided directly to farmers by private
insurers. 3-E
Professional Liability - ANSWERS-Professional Liability Coverage is insurance that
protects practitioners such as doctors, lawyers, engineers, architects, etc.. It
,includes two types of coverage: malpractice insurance and errors and omissions
insurance.
Proof of Loss - ANSWERS-The form or statement that the policyholder is required
to submit to the insurer before she can be indemnified for a loss. 3-A
Proximate Cause - ANSWERS-The original occurrence, the source, of all the
subsequent damages. 1-H
Punitive Damages - ANSWERS-Intangible damages awarded to the plaintiff when
the defendant's actions show intentional heinous, antisocial behavior or extreme
indifference to harm. They are determined by the court. 1-L
Rating Systems - ANSWERS-Measure hazards of individual risk in a given area, and
sets premiums accordingly. 6-E/G
RC - ANSWERS-Replacement Cost, It refers to the cost of repairing or replacing an
insured item, based on the item's value at the time of the loss. 1-J
Rebates - ANSWERS-Refunding of part of the premium, due to the creation of a
new contract or change to an existing contract. 6-D
Reciprocal Insurers - ANSWERS-A Reciprocal Insurer is an unincorporated
organization of subscribers that operates through an attorneyin-fact to provide
insurance benefits for its members. 1-C
,Reinsurers - ANSWERS-Companies which sell insurance to insurers to reduce the
insurer's exposure to loss. 1-C
Reporting - ANSWERS-One of the adjuster's duties is to Report to the Principal.
The adjuster must give the principal frequent updates of her progress on any
given claim. 2-B
Replacement Cost (RC) - ANSWERS-A method of valuation based on the cost of
replacing an item at current market prices, regardless of depreciation. 1-J
Reservation of Rights - ANSWERS-A notification that an insurer might give to an
insured, informing him that a reported loss might not be covered under his
insurance policy. 1-L
Retroactive date - ANSWERS-Date preceding a policy period before which the
policy will not cover occurrences. 4-B
Revenue Assurance (Crop Insurance) - ANSWERS-A form of Crop Revenue
Insurance that provides a fixed revenue guarantee based on average county
prices 3-E
Revenue Protection (Crop Insurance) - ANSWERS-Also called Yield Protection, this
is the most comprehensive form of Crop Revenue Insurance, offering higher
coverage amounts than other types. The revenue guarantee is based on the
, higher of: harvestmarket price or early market price. Previously called Crop
Revenue Coverage (CRC) 3-E
Risk - ANSWERS-In the insurance industry, risk can have two meanings: 1) the
potential for financial loss; being exposed or open to damage, 2) an insured item.
1-D
Risk Avoidance - ANSWERS-Insurers' practice of denying insurance applications
that they believe would involve an inordinate amount of risk. 1-E
Risk Management - ANSWERS-Measures taken by an insurance company to
ensure that their exposure is not too high and to control the effect of a loss; for
example, an insurer might charge higher premiums to drivers who have received
speeding tickets. 1-E
Risk Management Agency - ANSWERS-A federal agency under the USDA that
administers the Federal Crop Insurance Program. 3-E
Risk Purchasing Groups - ANSWERS-Groups of people with similar insurance needs
who form an organization to buy insurance as a group. 1-C
Risk, Pure - ANSWERS-Risk that does not entail the possibility of gain; the only
possible outcomes are a loss or no loss. 1-D
EXAM
Principal - ANSWERS-The principal refers to an agent's employer (usually an
insurance company, but it could also mean anyone who contracts the agent to
work on their behalf and gives her the authority to do so). 2-A
Principle of Indemnity - ANSWERS-The principle behind all insurance contracts. It
states that, when a loss occurs, the insured should be restored to his or her
financial condition before the loss occurred, no better, no worse. The insured
cannot profit from a loss. 1-A
Privacy - ANSWERS-In insurance, the right of consumers to have their personal
information protected. 6-E
Private - ANSWERS-Private insurance is the term for any insurance other than
social insurance. Social insurance programs are run by the government instead of
by private individuals. 1-C
Private Crop Insurance - ANSWERS-Crop insurance that does not fall under the
Federal Crop Insurance Program and is provided directly to farmers by private
insurers. 3-E
Professional Liability - ANSWERS-Professional Liability Coverage is insurance that
protects practitioners such as doctors, lawyers, engineers, architects, etc.. It
,includes two types of coverage: malpractice insurance and errors and omissions
insurance.
Proof of Loss - ANSWERS-The form or statement that the policyholder is required
to submit to the insurer before she can be indemnified for a loss. 3-A
Proximate Cause - ANSWERS-The original occurrence, the source, of all the
subsequent damages. 1-H
Punitive Damages - ANSWERS-Intangible damages awarded to the plaintiff when
the defendant's actions show intentional heinous, antisocial behavior or extreme
indifference to harm. They are determined by the court. 1-L
Rating Systems - ANSWERS-Measure hazards of individual risk in a given area, and
sets premiums accordingly. 6-E/G
RC - ANSWERS-Replacement Cost, It refers to the cost of repairing or replacing an
insured item, based on the item's value at the time of the loss. 1-J
Rebates - ANSWERS-Refunding of part of the premium, due to the creation of a
new contract or change to an existing contract. 6-D
Reciprocal Insurers - ANSWERS-A Reciprocal Insurer is an unincorporated
organization of subscribers that operates through an attorneyin-fact to provide
insurance benefits for its members. 1-C
,Reinsurers - ANSWERS-Companies which sell insurance to insurers to reduce the
insurer's exposure to loss. 1-C
Reporting - ANSWERS-One of the adjuster's duties is to Report to the Principal.
The adjuster must give the principal frequent updates of her progress on any
given claim. 2-B
Replacement Cost (RC) - ANSWERS-A method of valuation based on the cost of
replacing an item at current market prices, regardless of depreciation. 1-J
Reservation of Rights - ANSWERS-A notification that an insurer might give to an
insured, informing him that a reported loss might not be covered under his
insurance policy. 1-L
Retroactive date - ANSWERS-Date preceding a policy period before which the
policy will not cover occurrences. 4-B
Revenue Assurance (Crop Insurance) - ANSWERS-A form of Crop Revenue
Insurance that provides a fixed revenue guarantee based on average county
prices 3-E
Revenue Protection (Crop Insurance) - ANSWERS-Also called Yield Protection, this
is the most comprehensive form of Crop Revenue Insurance, offering higher
coverage amounts than other types. The revenue guarantee is based on the
, higher of: harvestmarket price or early market price. Previously called Crop
Revenue Coverage (CRC) 3-E
Risk - ANSWERS-In the insurance industry, risk can have two meanings: 1) the
potential for financial loss; being exposed or open to damage, 2) an insured item.
1-D
Risk Avoidance - ANSWERS-Insurers' practice of denying insurance applications
that they believe would involve an inordinate amount of risk. 1-E
Risk Management - ANSWERS-Measures taken by an insurance company to
ensure that their exposure is not too high and to control the effect of a loss; for
example, an insurer might charge higher premiums to drivers who have received
speeding tickets. 1-E
Risk Management Agency - ANSWERS-A federal agency under the USDA that
administers the Federal Crop Insurance Program. 3-E
Risk Purchasing Groups - ANSWERS-Groups of people with similar insurance needs
who form an organization to buy insurance as a group. 1-C
Risk, Pure - ANSWERS-Risk that does not entail the possibility of gain; the only
possible outcomes are a loss or no loss. 1-D
