chapter 6 questions-principles of insurance

chapter 6 questions-principles of insurance - because oF a...

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6. Briefly describe the following types of claims adjustors: A. Agent: has the authority to settle small first-party claims up to some maximum limit. B. Company adjustor: can settle a claim. C. Independent adjustor: an organization or individual that adjusts claims for a fee. D. Public adjustor: can be involved in settling a claim. A public adjuster, however, represents the insured rather than the insurance company and is paid a fee based on the amount of the claim settlement. 7. A. What is the meaning of reinsurance? Arrangement by which primary insurer initially write insurance transfer of another insurer part or all potential losses. B. Briefly explain the reasons for reinsurance. Increase underwriting capacity Stabilize profits Reduce the unearned premium reserve Provide protection against a catastrophic loss Retire from business or from a line of insurance or territory Obtain underwriting advice on a line for which the insurer has little experience Application question 3. Property insurance company is a new property insurer. The company is growing rapidly
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Unformatted text preview: because oF a new homeowners that combines tradiTonal homeowner’s coverage with insurance that pays o² the mortgage iF the insured dies or becomes totally disabled. Premiums wri³en have increased substanTally; new agents have been hired; and the company is considering expanding into addiTonal states. However, its growth has been hampered by statutory accounTng rules that required and insurer to write o² immediately its ´rst year acquisiTon expenses but do not allow Full recogniTon oF premium income unTl the policy period has expired. In premium income unTl the policy period has expired. In this case, explain how reinsurance will enable Property Insurance to conTnue to grow in an orderly Fashion. Reinsurance can be used to increase the insurance company’s underwri±ng capacity to write a new business, to stabilize profts, reduce the unearned premium reserve, and to provide protec±on against a catastrophic loss....
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