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Question 1 of 30
Which of the below can be considered a true sentence regarding the reinsurance market?Correct
One of the most difficult thing regarding the reinsurance market is the information which is both rare and hard to collect. The reinsurance market is highly integrated at the global level and essentially over-the-counter.
Question 2 of 30
When is basket retention used in general and why is it useful for considering the variants presented?
I. Basket retention is used when there are significant property and casualty losses from the same occurrence.
II. The Basket retention limits a ceding company’s loss in events involving multiple policies to single retention versus having to pay two retentions.
III. Basket retention could be used but not necessarily when there are significant properties.
IV. The Basket retention limits ceding companies gain in events involving multiple policies to single retention versus having to pay two retentions.Correct
The basket retention is used and helpful when there are significant property and casualty losses from the same occurrence or when a ceding company’s loss in events involving multiple policies to single retention versus having to pay two retentions.
Question 3 of 30
What will prudent insurers do in any given situation considering the options you are given?
I. Will avoid over-exposure in general.
II. Will try to avoid exposure at any risk.
III. Will always only take risks they have experience in.
IV. Only use facultative reinsurance to reinsure business.Correct
The prudent insurers will try in any given situation to try to avoid over-exposure at any risk.
Question 4 of 30
Which of the statement from the solutions offered about prudent insurers do you consider to be true?Correct
In any moment that is possible, the prudent insurers will avoid over-exposure on any risk.
Question 5 of 30
What do you consider that solvency margin is, considering some of the options given?Correct
The solvency margin refers to the amount by which assets must exceed liabilities.
Question 6 of 30
What does the assumed reinsurance accounting refer to in general considering the options given to you below?Correct
Reinsurance accounting refers to the insurers writing direct insurance contracts.
Question 7 of 30
What is the main difference between the retroactive reinsurance versus the prospective reinsurance?Correct
The main difference between the retroactive reinsurance versus the prospective reinsurance comes from the loss covered differently.
Question 8 of 30
Based on the “Reinsurance Principles and Practices” by Harrison which are the principal functions of reinsurance?
I. Increase large line capacity.
II. Provide catastrophe protection.
III. Stabilize loss experience.
IV. Provide surplus relief.Correct
The “Reinsurance Principles and Practices” by Harrison includes the following points: increasing large line capacity, providing catastrophe protection, stabilizing loss experience and providing surplus relief.
Question 9 of 30
Which is one of the first functions of reinsurance by definition from your point of view?Correct
One of the first functions of the reinsurance is to increase large-line capacity.
Question 10 of 30
How does reinsurance stabilize the ceding company claim, experience and his account?
I. The claim will represent a request by an insured for an insured event, for covered losses or damages.
II. Stabilize a ceding company’s specific results with claims and experience.
III. Assist the ceding company’s proper and prudent management of its account or balance sheet.
IV. The experience will be the ceding company’s overall history of claims/losses and related reserves.Correct
One of the ways the reinsurance will stabilize the ceding company claim experience and his account is by a requesting by an insured for an insured event, for covered losses or damages.
Question 11 of 30
When withdrawing from a market segment, the primary insurer base some of the options, which are those?
I. Cancel all policies (if regulations permit) and refund the unearned premiums to insure.
II. Stop writing insurance policies and continue in-force insurance without certain expiration limit.
III. Withdraw from the market segment by purchasing portfolio reinsurance.
IV. Stop writing new insurance policies and continue in-force insurance until all policies expire.Correct
When the withdrawing from a market segment and the primary insurer base some of the options are to cancel all policies, withdraw from the market segment by purchasing portfolio reinsurance and stop writing new insurance policies.
Question 12 of 30
Which types related to the excess of loss reinsurance do you think are true?
I. Catastrophe excess of loss.
II. Per policy excess of loss reinsurance.
III. Per occurrence excess of loss reinsurance.
IV. Aggregate excess of loss reinsurance.Correct
The types related to the excess of loss reinsurance are the catastrophe excess of loss, per policy and occurrence excess of loss reinsurance and Aggregate excess of loss reinsurance.
Question 13 of 30
How could the aggregate deductible be defined considering the options given down below?Correct
The aggregate deductible could be defined as the limit deductible a policyholder would be required to pay on claims during a given period of time.
Question 14 of 30
Which from the list below are some unique factors in the insurance market?
I. Market research.
II. Demands for technology.
III. Regulatory controls.
IV. Economic forces.Correct
Some of the factors that are unique in the insurance market are market research, regulatory controls and the economic forces.
Question 15 of 30
Which of the below is a true statement when you think about reinsurance in general?Correct
Through reinsurance, we understand a business that is different from others, for example, retail insurance. The regulatory approach in case of the reinsurance is different than others.
Question 16 of 30
Which are some of the reasons someone should choose using reinsurance?
I. Improves policyholder protection bypassing mortality and other risks (persistency, investment) to the reinsurer.
II. Provides readily available financing for new business in exactly the right amount.
III. Reduces ceding company’s solvency requirements in proportion to risk transfer to a reinsurance company.
IV. Ceding company’s cost of using reinsurer’s capital is tied to the profitability of business ceded.Correct
Some of the reasons someone should choose using reinsurance is to mproves policyholder protection, reduces ceding company’s solvency requirements and more.
Question 17 of 30
Which of the statements presented are true regarding the claim adjuster?Correct
Claim adjuster can be considered any person that represents the insurer only in case the policyholder presents a claim for payment.
Question 18 of 30
Which of the below describes the bank deposit approach in the circumstances of basic insurance accounting?Correct
The bank deposit approach in the circumstances of basic insurance is accounting, the initial deposit grows with credited interest. Also, the ending deposit for a reporting period is dependent solely on the beginning balance.
Question 19 of 30
When would a misrepresentation on the insurance application be considered fraud?
I. Never: statements by the applicant are only representations.
II. When the application is incomplete.
III. If it is material.
IV. If it is intentional.Correct
The misrepresentation on the insurance application is considered fraud only in case this was done intentional and material.
Question 20 of 30
Which of the following cannot be considered to be a goal of risk retention?
I. To minimize the insured’s level of liability in any given event of a loss.
II. To minimize the insured’s level of liability in the event of a loss.
III. To reduce expenses and to improve cash flow.
IV. To increase control of claim reserving and claims settlements.Correct
It cannot be considered a goal of risk retention the idea of minimizing the insured’s level of liability in the event of a loss.
Question 21 of 30
Which of the below best describes from your point of view the insurance by definition?Correct
Through an insurance contract, we understand a written agreement in order for the insurer to indemnify the insured person against a specified loss in return for money.
Question 22 of 30
What beneficiary designation has the first claim to the death proceeds of a life insurance policy?Correct
The beneficiary designation that has the first claim to the death proceeds of a life insurance policy is called the primary beneficiary.
Question 23 of 30
An applicant for life insurance misstated her age on the policy application. How will this affect the death benefit?Correct
In case of an applicant for life insurance misstated her age on the policy application, the death benefit will be adjusted to the amount that the insured could obtain for her correct age.
Question 24 of 30
Which of the two types of policy assignments requires a transfer of all ownership rights in the policy to a third party?Correct
Some of the types of policy assignments require to transfer of all ownership rights in the policy to a third party is called the absolute assignment.
Question 25 of 30
What are representations of life insurance applications considering the below?Correct
The representations of life insurance applications are the statements made by the applicant that are true to the best of the applicant’s knowledge.
Question 26 of 30
Which dividend option is automatically selected by the company if not chosen by the policy owner?Correct
The dividend option that is automatically selected by the company if not chosen by the policy owner is called the paid-up additions.
Question 27 of 30
What life policy rider allows the company to forgo collecting the premium if the insured becomes disables?Correct
The life policy rider that allows the company to forgo collecting the premium if the insured becomes disables is called the waiver of premium.
Question 28 of 30
What type of beneficiary do you think that is next in line after the primary beneficiary?Correct
The second person after the beneficiary that is next in line after the primary beneficiary is called the contingent beneficiary.
Question 29 of 30
What is the consideration on the part of the insurer considering the below options given?Correct
The consideration on the part of the insurer could be also considered as a promise to pay policy benefits.
Question 30 of 30
What is the name for a life insurance policy rider that provides coverage on the insured’s family members?Correct
The name of the life insurance policy rider that provides coverage on the insured’s family members is called the other-insured rider.