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I&RM (CH.3)
Chapter 3
11
Insurance
Undergraduate 1
01/06/2016

Additional Insurance Flashcards

 


 

Cards

Term
Risk Management
Definition
A process that identifies loss exposure faced by an organization and selects the most appropriate techniques for treating the exposure
Term
Loss Frequency
Definition
the probable number of losses that may occur during some given time period
Term
Loss Severity
Definition
-the probable size of the loss that may occur
-units = dollars
Term
Maximum Possible Loss
Definition
the worst loss that could happen to a firm during its lifetime
Term
Probable Maximum Loss
Definition
the worst loss that is most likely to happen
Term
Retention Level
Definition
the dollar amount of losses that the firm will retain
ex: deductible
Term
Deductible
Definition
-a provision by which a specified amount is subtracted from the loss payment otherwise payable to the insured
-the insured "skin in the game"
Term
Excess Insurance
Definition
a plan in which the insurer does not participate in the loss until the actual loss exceeds the amount a firm has decided to retain
Term
Manuscript Policy
Definition
Policy designed for a firm's specific needs and requirements
Term
Risk Management Policy Statement
Definition
Statement that outlines the risk management objectives of the firm, as well as company policy with respect to treatment of loss exposure
Term
Risk Management Manual
Definition
describes the risk management program of the firm
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