RMI 201 EXAM 2025 QUESTIONS
AND ANSWERS
insurable risk - ANSWER✔✔-1) risk that is faced by a large number of people and for which the
amount of the loss can be predicted; 2) risk which is accidental or unintentional; 3) Loss must be
measurable; 4) cannot be catastrophic; 5) loss is calculable; 6) accessible premium rates
worker's compensation - ANSWER✔✔-health insurance plan providing treatment for workers
injured on the job
Speculative Risk - ANSWER✔✔-Risk could have loss or gain.
Pure risk - ANSWER✔✔-a risk that presents the chance of loss but no opportunity for gain
strategic risk - ANSWER✔✔-risks regarding the firm's financial goals and objectives
enterprise risk - ANSWER✔✔-encompasses all major risks faced by a business firm, which include:
pure risk, speculative risk, strategic risk, operational risk, and financial risk
Reinsurance - ANSWER✔✔-An insurance company does not want to assume all the risk for their
company. They often purchase insurance from other insurance companies. The shifting of an
insured risk from one insurance company to another is called...
FOR STUDY PURPOSES ONLY COPYRIGHT © 2025 ALL RIGHTS RESERVED 1
,Underwriting - ANSWER✔✔-the process of selecting, classifying, and pricing applicants for
insurance
coinsurance - ANSWER✔✔-a provision under which both the insured and the insurer share the
covered losses
liability insurance - ANSWER✔✔-bodily and property payment to others if a member of the
insured household accidentally causes harm to other people or property
chance of loss - ANSWER✔✔-probability of risk
TRIA - ANSWER✔✔-Terrorism Risk Insurance Act
Insurance applied outside the U.S - ANSWER✔✔-not liable - no coverage; example war i Ukraine
non-insurance - ANSWER✔✔-alternative insurance options outside insurance company: 1) self
insurance; 2) Risk retention; 3) captive insurance; 4) warranties
captive insurance - ANSWER✔✔-an insurer owned by a parent firm for the purpose of insuring the
parent firm's loss exposures
Adverse selection - ANSWER✔✔-people who are higher risk of loss seek insurance at standard
rates.
Non-diversified risk - ANSWER✔✔-a risk which is not spread out
Diversified - ANSWER✔✔-risk effecting a large amount of people, spread out over a large
population
objective risk - ANSWER✔✔-not opinionated: data and evidence
FOR STUDY PURPOSES ONLY COPYRIGHT © 2025 ALL RIGHTS RESERVED 2
, characteristics of insurance - ANSWER✔✔-- Pooling of losses
- Risk transfer
- Indemnification
- Payment of fortuitous losses
risk manager - ANSWER✔✔-identifying risks for the company and to determine how likely a risk is,
as well as its severity of impact on the company.
underwriter - ANSWER✔✔-analyzes risk, decide if should insure good or bad risk
pooling assests - ANSWER✔✔-sharing losses inside a group
Sally started a business. Starting a new business is risky. Sally wants to make a profit. What type of
risk is sally's business? - ANSWER✔✔-Speculative - don't know if the business will succeed or fail.
why TRIA - ANSWER✔✔-TRIA protects people and business alike by accepting liability of specific
losses in the event of a terrorist attack. This included property loss, physical loss, and financial loss
like workers compensation.
liability risk - ANSWER✔✔-relates to harm or injury to other people or their property because of
your actions
hazard - ANSWER✔✔-creates potential for loss
steps in risk management - ANSWER✔✔-1. Identify possible risks
2. Analyze risks
FOR STUDY PURPOSES ONLY COPYRIGHT © 2025 ALL RIGHTS RESERVED 3
AND ANSWERS
insurable risk - ANSWER✔✔-1) risk that is faced by a large number of people and for which the
amount of the loss can be predicted; 2) risk which is accidental or unintentional; 3) Loss must be
measurable; 4) cannot be catastrophic; 5) loss is calculable; 6) accessible premium rates
worker's compensation - ANSWER✔✔-health insurance plan providing treatment for workers
injured on the job
Speculative Risk - ANSWER✔✔-Risk could have loss or gain.
Pure risk - ANSWER✔✔-a risk that presents the chance of loss but no opportunity for gain
strategic risk - ANSWER✔✔-risks regarding the firm's financial goals and objectives
enterprise risk - ANSWER✔✔-encompasses all major risks faced by a business firm, which include:
pure risk, speculative risk, strategic risk, operational risk, and financial risk
Reinsurance - ANSWER✔✔-An insurance company does not want to assume all the risk for their
company. They often purchase insurance from other insurance companies. The shifting of an
insured risk from one insurance company to another is called...
FOR STUDY PURPOSES ONLY COPYRIGHT © 2025 ALL RIGHTS RESERVED 1
,Underwriting - ANSWER✔✔-the process of selecting, classifying, and pricing applicants for
insurance
coinsurance - ANSWER✔✔-a provision under which both the insured and the insurer share the
covered losses
liability insurance - ANSWER✔✔-bodily and property payment to others if a member of the
insured household accidentally causes harm to other people or property
chance of loss - ANSWER✔✔-probability of risk
TRIA - ANSWER✔✔-Terrorism Risk Insurance Act
Insurance applied outside the U.S - ANSWER✔✔-not liable - no coverage; example war i Ukraine
non-insurance - ANSWER✔✔-alternative insurance options outside insurance company: 1) self
insurance; 2) Risk retention; 3) captive insurance; 4) warranties
captive insurance - ANSWER✔✔-an insurer owned by a parent firm for the purpose of insuring the
parent firm's loss exposures
Adverse selection - ANSWER✔✔-people who are higher risk of loss seek insurance at standard
rates.
Non-diversified risk - ANSWER✔✔-a risk which is not spread out
Diversified - ANSWER✔✔-risk effecting a large amount of people, spread out over a large
population
objective risk - ANSWER✔✔-not opinionated: data and evidence
FOR STUDY PURPOSES ONLY COPYRIGHT © 2025 ALL RIGHTS RESERVED 2
, characteristics of insurance - ANSWER✔✔-- Pooling of losses
- Risk transfer
- Indemnification
- Payment of fortuitous losses
risk manager - ANSWER✔✔-identifying risks for the company and to determine how likely a risk is,
as well as its severity of impact on the company.
underwriter - ANSWER✔✔-analyzes risk, decide if should insure good or bad risk
pooling assests - ANSWER✔✔-sharing losses inside a group
Sally started a business. Starting a new business is risky. Sally wants to make a profit. What type of
risk is sally's business? - ANSWER✔✔-Speculative - don't know if the business will succeed or fail.
why TRIA - ANSWER✔✔-TRIA protects people and business alike by accepting liability of specific
losses in the event of a terrorist attack. This included property loss, physical loss, and financial loss
like workers compensation.
liability risk - ANSWER✔✔-relates to harm or injury to other people or their property because of
your actions
hazard - ANSWER✔✔-creates potential for loss
steps in risk management - ANSWER✔✔-1. Identify possible risks
2. Analyze risks
FOR STUDY PURPOSES ONLY COPYRIGHT © 2025 ALL RIGHTS RESERVED 3
