Page 375 - IC38 GENERAL INSURANCE

Answers to Test Yourself

Answer 1
The correct option is I.
Probability and severity of risk affect insurance ratemaking.
Answer 2
The correct option is I.
Pure premium is sufficient enough to pay for losses, however it does not
account for administrative expenses or profit.
Answer 3
The correct option is II.
An insurance agent should report to the insurer any detection of moral hazard.
Answer 4
The correct option is II.
Liability insurance can insure the doctor against claims of negligence.

Self-Examination Questions

Question 1
_____________ decides whether to accept or not to accept the risk.
I. Assured
II. Underwriter
III. Agent
IV. Surveyor
Question 2
_______________ is the price of a given unit of insurance.
I. Rate
II. Premium
III. Sum Assured
IV. Bonus

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