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Question 1 of 10
1. Question
Many higher limits can have few appearances and few claims and as a result,
Correct
This can create restrictions as volatility can point to counterintuitive results.
Incorrect
This can create restrictions as volatility can point to counterintuitive results.
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Question 2 of 10
2. Question
One method in selecting loss development factors to be applied to a specific loss limit is
Correct
This approach may not reduce the volume of data used in the analysis.
Incorrect
This approach may not reduce the volume of data used in the analysis.
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Question 3 of 10
3. Question
When using traditional loss experience to calculate empirical ILFs,
Correct
It is generally assumed that inflation is the same for each claim.
Incorrect
It is generally assumed that inflation is the same for each claim.
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Question 4 of 10
4. Question
A profit and contingencies provision is intended to,
Correct
An additional provision, or risk load, is often considered in increased limits pricing for the added risk.
Incorrect
An additional provision, or risk load, is often considered in increased limits pricing for the added risk.
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Question 5 of 10
5. Question
ILFs calculated in practice usually make the simplifying assumption that
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The variable factor also should be kept under consideration.
Incorrect
The variable factor also should be kept under consideration.
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Question 6 of 10
6. Question
The loss elimination ratio (LER) is defined to be
Correct
In other words, LER is the difference between the expected losses at the base level deductible and the expected losses at the deductible D, divided by the expected losses at the base level deductible.
Incorrect
In other words, LER is the difference between the expected losses at the base level deductible and the expected losses at the deductible D, divided by the expected losses at the base level deductible.
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Question 7 of 10
7. Question
In practice, the insurer will often not be aware of,
Correct
As a result, data from policies with deductibles higher than the deductible factor being prices=d cannot be used to calculate that relativity.
Incorrect
As a result, data from policies with deductibles higher than the deductible factor being prices=d cannot be used to calculate that relativity.
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Question 8 of 10
8. Question
One data consideration is an issue with incomplete data due to
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For example, An insured with a $1,000 deductible may decide not to report a claim where the loss is $1,200.
Incorrect
For example, An insured with a $1,000 deductible may decide not to report a claim where the loss is $1,200.
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Question 9 of 10
9. Question
Even though a primary may transfer part of the risk underlying its insurance portfolio to a reinsurer,
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If a reinsurer is unable to meet its financial obligation to the primary insurer, the primary insurer is still obligated to satisfy the terms of the originally issued policy.
Incorrect
If a reinsurer is unable to meet its financial obligation to the primary insurer, the primary insurer is still obligated to satisfy the terms of the originally issued policy.
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Question 10 of 10
10. Question
Reinsurers may also reduce the amount of the reinsurance they assume by,
Correct
It is also referred to as retrocession i.e the action of ceding territory back to a country or government.
Incorrect
It is also referred to as retrocession i.e the action of ceding territory back to a country or government.