CAIB II - CHAPTER II Exams with 100% Correct verified answers 2024/2025, Exams of Business Administration

Download CAIB II - CHAPTER II Exams with 100% Correct verified answers 2024/2025 and more Exams Business Administration in PDF only on Docsity! CAIB II - CHAPTER II Exams with 100% Correct verified answers 2024/2025 A proposal for insurance that's presented to the underwriter for consideration. It can include an application, and additional verbal and written information (i.e., previous policy premium, loss details and history, financial statements and photos). "Submission." 1) Assists to identify loss exposures; 2) Helps eliminate purchase of coverage that isn't needed; 3) Assists in development of underwriting information the insurer needs. Three purposes of survey forms. 1) Alerts broker to possible loss exposures; 2) Ensures needed coverages are not overlooked; 2) Helps reduce potential for an E&O claim. Three advantages of using a property checklist with clients. Frame. The type of commercial building construction that's likely to produce the highest insurance rate. Fire resistive. The type of commercial building construction that's likely to produce the lowest insurance rate. 25 years or older. The age a building has to be for an insurer to request information about recent renovations or upgrading. 1) Roof; 2) Wiring; 3) Over-current protection; 4) Plumbing; 5) Heating. The five kinds of building upgrades to a building that are likely of most interest to insurers. 1) Heating; 2) Electrical services; 3) Detachment; 4) Protection; 5) Occupancy. Five hazards common to most commercial property risks. Because the proximity to other commercial buildings can increase the risk. Why the distance or detachment from other commercial risks is an important rating consideration. Low profit margins force out some of the competition, insurers have a more disciplined underwriting approach, little or no rate discounts. The characteristics of a "hard market". A condition that may cause a peril to occur. "Hazard." A condition relating to the use of tangible property that could cause a peril to occur. Can be characteristics of the risk itself or the environment it's in. (e.g., type of construction, occupancy, housekeeping, external exposures, geography and protection.) "Physical hazard." The characteristics of the applicant that could cause a peril to occur -- financial condition, associates, moral character. "Moral hazard." The attitude of the applicant that could cause a peril to occur -- indifference to loss, poor management. "Morale hazard." 1) Broker; 2) Government records; 3) Financial rating services. Three external sources of underwriting information. 1) Loss experience data; 2) Inspection reports; 3) Field representatives. Three internal sources of underwriting information. Business that's substandard but the insurer agrees to accept as a favour or accommodation to the broker. "Accommodation business." The existence of other insurance policies the applicant has with the same insurer. "Supporting business."