1) Flood insurance can be purchased through any licensed property or casualty in

Question

1)

Flood insurance can be purchased through any licensed property or casualty insurance agent or from some direct writing insurers. Some insurers actually issue the flood insurance policies, in partnership with the federal government, as a service and convenience for their policyholders. In those instances, the insurer handles the premium billing and collection, policy issuance, and loss adjustment on behalf of the federal government. Identify these insurers.

Stock insurers

Write Your Own insurers

Mutual insurers

High network insurers

Subrogate insurers

2)

Identify exclusion (f) in bodily injury and property damage liability in a commercial general liability policy.

Nonfortuitous liability

Contractually assumed liability

Liquor liability

Pollution liability

Workers’ compensation liability

3)

Identify the hazard that generally exists when a person can gain from the occurrence of a loss.

Causal hazard

Collective hazard

Physical hazard

Morale hazard

Moral hazard

4)

n linear regression, if ‘X’ is the year (Year 1, 2, 3… and so on), how would you calculate future claims?

Future claims = X + Slope + Intercept

Future claims = Slope + Intercept * X

Future claims = (Slope + Intercept)/X

Future claims = Intercept + Slope * X

Future claims = (Intercept + Slope) * X

5)

This disability insurance policy provision coordinates benefits under different disability policies by providing for a reduction in benefit payments if the total amount of income payments under all insurance policies covering the loss exceeds earnings at the time disability commences, or exceeds the average earnings for two years preceding disability, whichever is greater. Identify this provision.

Coinsurance provision

Indemnity provision

Average earnings provision

stop-loss limit provision

coordination of benefits provision

6)

Which of the following is covered by umbrella policies?

Personal injury liability

Obligations under workers’ compensation

Owned or rented aircraft without underlying coverage

Property damage to any property in the care, custody, or control of the insured

Any act committed by or at the direction of the insured with intent to cause personal injury or property damage

Explanation / Answer

Ans 1. Write Your Own insurers

The NFIP is administered by FEMA, now part of the Department of Homeland Security. Flood insurance was initially only available through insurance agents who dealt directly with the federal program. The “direct” policy program has been supplemented since 1983 with a private/public cooperative arrangement, known as “Write Your Own,” through which a pool of insurance companies issue policies and adjust flood claims on behalf of the federal government under their own names, charging the same premium as the direct program.

Ans 2.Pollution liability

Commercial General Liability (CGL) insurance protects business owners against claims of liability for bodily injury, property damage, and personal and advertising injury (slander and false advertising).Premises/operations coverage pays for bodily injury or property damage that occurs on your premises or as a result of your business operations. Its not includes pollution liability.

Ans 3 Moral Hazards

Moral hazards are hazards that involve behavior that can be construed as negligence or that borders on criminality. They involve dishonesty on the part of people who take out insurance (called “insureds”). Risk transfer through insurance invites moral hazard by potentially encouraging those who transfer risks to cause losses intentionally for monetary gain. Generally, moral hazards exist when a person can gain from the occurrence of a loss.

Ans.4

Future claims = Intercept + Slope × (X)

Ans 5) coordination of benefits provision

coordinates benefits under different disability policies by providing for a reduction in benefits payments if the total amount of income payments under all insurance policies covering the loss exceeds earning at the time disability commences or exceeds the average earnings for two years preceding disability, whichever is greater.

Ans 6) Personal injury liability

Umbrella insurance provides coverage for:

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