Social Science Business Insurance
ARe 320
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According to expert Ari Chester, there are four or five C. Optimization
ways that reinsurance can improve a primary insurer's
financial standing. Which one of those following ways is According to Ari Chester, optimization refers to using reinsurance to improve a
described by him as "a reinsurer might have a different primary insurer's return on equity by leveraging the reinsurer's different
diversification, a different investment base, so that the diversification or investment base.
insurer uses reinsurance to improve its return on equity?"
Select one:
A. Protection
B. Portfolio management
C. Optimization
D. Extending capacity
Alexis is an underwriter at CLK Reinsurance, and is B. HRT stresses its very profitable professional liability book of business and HRT's
evaluating a prospective primary insurer's (HRT Insurance) efforts to keep increasing the profits and sales margins in the future.
specialty coverage portfolio before CLK finalizes any
reinsurance agreement between the two companies. As This signals a potential underwriting concern, because the insurer is focusing on
she evaluates the insurer's various coverages, which one profit and sales growth rather than adequately managing risk exposures.
of the following will give her the most concern moving
forward?
Select one:
B. HRT stresses its very profitable professional liability
book of business and HRT's efforts to keep increasing the
profits and sales margins in the future.
C. HRT has a proven record of advanced loss prevention
measures as well as verifiable instances of efforts to
continue to control large property losses.
D. HRT has a diverse portfolio of commercial accounts
from many geographic areas and climate-related zones
that may experience localized catastrophic losses.
, All of the following are true concerning trends over the C. There have been a greater number of wildfire ignitions over the last decade
past several years of natural disasters such as wildfires than the preceding one.
and tornadoes, EXCEPT:
Select one: While wildfires have become more destructive and severe, the number of
A. Tornadoes are not getting bigger, but are hitting ignitions has not necessarily increased — in fact, many reports show that the
larger, developed communities. number of fires has remained steady or even decreased, but each event tends to
B. Mitigation of such loss exposures is more important burn more acreage and cause more damage due to factors like drought,
than ever as more and more homeowners and businesses development in wildland-urban interfaces, and climate change.
are impacted by natural disaster.
C. There have been a greater number of wildfire ignitions
over the last decade than the preceding one.
D. The severity and size of such events has increased in
comparison to their frequency, because the events are
hitting large, developed communities.
All of those working in the accounts payable department C. Policies and procedures.
at Greenwood Engineering Products must attend
mandatory training annually to review and test their Greenwood is using formal rules, training, and procedures to guide employees in
handling of incoming payments, with special attention to safely handling sensitive financial information. This is exactly what policies and
their customers' bank and credit card accounts and any procedures risk control entails—establishing consistent practices to prevent errors
other sensitive personal information. Greenwood takes or losses.
this risk control responsibility seriously by controlling risk
through
Select one:
A. Regular inspections.
B. Protection.
C. Policies and procedures.
D. Maintenance programs.
Andrew received a pro rata facultative certificate stated B. "25% of $2,000,000."
as "$500,000 part of $2,000,000." That is the same as
Select one: A pro rata facultative certificate indicates that the reinsurer is responsible for a
A. "$500,000 xs of $2,000,000." proportion of the total risk, rather than excess.
B. "25% of $2,000,000."
C. "$2,000,000 less $500,000."
D. "$1,500,000 xs of $500,000."
Anthony was reviewing Schedule F of the NAIC Annual A. Part 2
Statement for Prime Insurance. He noted that a loss
portfolio transfer had taken place in the current year and Part 2 is the place for portfolio reinsurance transaction details
wanted more details on the reinsurer involved and
reinsurance agreement. Which one of the following parts
of Prime Insurance's Schedule F would provide Anthony
with this information?
Select one:
A. Part 2
B. Part 3
C. Part 4
D. Part 5
ARe 320
Save
Students also studied
ARe 321 API 320 Health Insurance: Types, Payers, an... Jackson
50 terms 19 terms 22 terms 12 terms
dfaust22 Preview dfaust22 Preview smithmp9 Preview MK
According to expert Ari Chester, there are four or five C. Optimization
ways that reinsurance can improve a primary insurer's
financial standing. Which one of those following ways is According to Ari Chester, optimization refers to using reinsurance to improve a
described by him as "a reinsurer might have a different primary insurer's return on equity by leveraging the reinsurer's different
diversification, a different investment base, so that the diversification or investment base.
insurer uses reinsurance to improve its return on equity?"
Select one:
A. Protection
B. Portfolio management
C. Optimization
D. Extending capacity
Alexis is an underwriter at CLK Reinsurance, and is B. HRT stresses its very profitable professional liability book of business and HRT's
evaluating a prospective primary insurer's (HRT Insurance) efforts to keep increasing the profits and sales margins in the future.
specialty coverage portfolio before CLK finalizes any
reinsurance agreement between the two companies. As This signals a potential underwriting concern, because the insurer is focusing on
she evaluates the insurer's various coverages, which one profit and sales growth rather than adequately managing risk exposures.
of the following will give her the most concern moving
forward?
Select one:
B. HRT stresses its very profitable professional liability
book of business and HRT's efforts to keep increasing the
profits and sales margins in the future.
C. HRT has a proven record of advanced loss prevention
measures as well as verifiable instances of efforts to
continue to control large property losses.
D. HRT has a diverse portfolio of commercial accounts
from many geographic areas and climate-related zones
that may experience localized catastrophic losses.
, All of the following are true concerning trends over the C. There have been a greater number of wildfire ignitions over the last decade
past several years of natural disasters such as wildfires than the preceding one.
and tornadoes, EXCEPT:
Select one: While wildfires have become more destructive and severe, the number of
A. Tornadoes are not getting bigger, but are hitting ignitions has not necessarily increased — in fact, many reports show that the
larger, developed communities. number of fires has remained steady or even decreased, but each event tends to
B. Mitigation of such loss exposures is more important burn more acreage and cause more damage due to factors like drought,
than ever as more and more homeowners and businesses development in wildland-urban interfaces, and climate change.
are impacted by natural disaster.
C. There have been a greater number of wildfire ignitions
over the last decade than the preceding one.
D. The severity and size of such events has increased in
comparison to their frequency, because the events are
hitting large, developed communities.
All of those working in the accounts payable department C. Policies and procedures.
at Greenwood Engineering Products must attend
mandatory training annually to review and test their Greenwood is using formal rules, training, and procedures to guide employees in
handling of incoming payments, with special attention to safely handling sensitive financial information. This is exactly what policies and
their customers' bank and credit card accounts and any procedures risk control entails—establishing consistent practices to prevent errors
other sensitive personal information. Greenwood takes or losses.
this risk control responsibility seriously by controlling risk
through
Select one:
A. Regular inspections.
B. Protection.
C. Policies and procedures.
D. Maintenance programs.
Andrew received a pro rata facultative certificate stated B. "25% of $2,000,000."
as "$500,000 part of $2,000,000." That is the same as
Select one: A pro rata facultative certificate indicates that the reinsurer is responsible for a
A. "$500,000 xs of $2,000,000." proportion of the total risk, rather than excess.
B. "25% of $2,000,000."
C. "$2,000,000 less $500,000."
D. "$1,500,000 xs of $500,000."
Anthony was reviewing Schedule F of the NAIC Annual A. Part 2
Statement for Prime Insurance. He noted that a loss
portfolio transfer had taken place in the current year and Part 2 is the place for portfolio reinsurance transaction details
wanted more details on the reinsurer involved and
reinsurance agreement. Which one of the following parts
of Prime Insurance's Schedule F would provide Anthony
with this information?
Select one:
A. Part 2
B. Part 3
C. Part 4
D. Part 5
