Rmin 2500 Exam 2 With Correct Answers

claim adjuster {Ans: personnel that adjust claims}treaty reinsurance {Ans: primary insurer has agreed to cede insurance to the reinsurer and reinsurer agrees to accept the business. a contractual agreement/ not very flexible}underwriting cycle {Ans: cyclical pattern of underwriting stringency and premium levels}equity in rating {Ans: is the purpose of coinsurance}loss ratio {Ans: losses incurred/premium}per occurrence excess of loss {Ans: the reinsurer will pay when the aggregate loss due to the same peril exceeds the per occurrence retention level. (catastrophe contracts)}expense ratio {Ans: underwriting expense/premium}deductible (co-payment) {Ans: paid by the insured before insurance company starts to pay. Amount subtracted from total loss payment that otherwise would be payable. purpose is to eliminate small claims, reduce premiums, reduce moral hazards}calculate pure premium {Ans: (incurred losses and loss adjustment expennses)/# of exposure units}pure premium {Ans: portion of the rate needed to pay losses and loss-adjustment expenses}adverse selection {Ans: when high risks policies are purchased for cheap and low risk policies are charged too much}warrenty {Ans: statement becomes part of contract and is guaranteed be the maker to be true in all respects ex. said sprinkler system would always be in working