# Shared Flashcard Set

## Details

FIL 354
Exam 2
16
Insurance
04/15/2014

Term
 Risk control measures include all of the following EXCEPT:a. avoidanceb. separationc. retentiond. preventione. Duplication
Definition
 C. Retention
Term
 In a regression analysis, the variable that we are interested in predicting is called the:Independent VariableDependent VariableIndicator VariableRandom Variable
Definition
 Dependent Variable
Term
 Litigation management, such as using arbitration, mediation or settling outside of the court, is an example of loss prevention?True or False
Definition
 False
Term
 ABC company signs a contract with DEF company under which DEF agrees to build a commercial building for ABC company. XYZ company agrees to perform the job on behalf of DEF if DEF failed to perform tasks promised. Who is the surety and the principal in this case?
Definition
 XYZ Company- suretyDEF- principal
Term
 Purchasing raw materials from different suppliers represent which of the following risk management techniques?AvoidanceLoss preventionSelf-insuranceLoss reduction
Definition
 Loss reduction
Term
 By purchasing insurance, a firm essentially lowers its taxable income in years when losses are low and increase taxable income in years when losses are high.True or False
Definition
 True
Term
 A firm with a lower current ratio will have greater capacity to retain.True or False
Definition
 False
Term
 Which of the following actions would increase the tax payment of a company?Increase in insurance premium payments.Recognition of depreciation on a new machine for accounting purposes.Reduction in retained losses.
Definition
 Reduction in retained losses
Term
 What is the probability that the next loss will be greater than \$1196 if loss severity follows a normal distribution with mean=\$1000 and SD=\$100?.01.025.05.10
Definition
 0.025
Term
 What is a statistically significant variable?
Definition
 The absolute value of T is >2; or P < .05
Term
 A regression coefficient is a point estimation of the relationship between the independent variable and the dependent variable. If we want to determine how confident we are about the point estimation, we should look at:T statP-valueConfidence intervalAdjusted R-square
Definition
 confidence interval
Term
 Transferring liability to another party through a waiver is an example of:Loss preventionAvoidancerisk control transferrisk financing transfer
Definition
 Risk control transfer
Term
 Which of the following policies will cover a claim filed in 2002 due to an injury caused by a detective product in 1998?A 2002 claims made policy with a retroactive date of July 1, 1999.A 1998 occurrence policy.A 2002 occurrence policy.
Definition
 A 1998 occurrence policy.
Term
 Which of the following is NOT an example of risk transfer:InsuranceHold harmless agreementCaptiveExculpatory Clauses
Definition
 Captive
Term
 Firms that care about liquidity will choose which of the following retention funding agreement?No advance fundingFunded ReserveUnfunded Reserve
Definition
 Funded Reserve
Term
 Retro premiums are sensitive to an insured's loss history in the past couple of years.True or False
Definition
 False
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