General Insurance PrinciplesCâu 196 / 474
A filed rate must be adequate, not excessive and not unfairly discriminatory. The rate itself is built from the expected loss cost plus:
a.reinsurance premiums returned to policyholders as dividends
b.the policy limit multiplied by the coinsurance percentage
c.expenses of doing business and an allowance for profit
d.the insured's deductible and the agent's fiduciary funds
Giải thích
A rate is the price of one unit of exposure: expected losses, plus a loading for expenses such as commissions, taxes and overhead, plus profit and contingencies. Premium is then the rate times the number of exposure units. Adequacy guards solvency, the excessive test guards buyers, and unfair discrimination means charging different prices to insureds with the same expected loss. Deductibles and limits shape one policy, not the rate structure.
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Câu hỏi liên quan cùng chủ đề
- A primary insurer must cede, and the reinsurer must accept, every risk falling in a defined class. This arrangement is:
- Under the McCarran-Ferguson Act, regulation of the business of insurance is:
- Producers who are salaried or commissioned employees of one insurer, and who do not own the renewal rights to their accounts, belong to the:
- A producer offers to pay a client's first month of premium out of her own commission if the client signs today. This practice is:
- An insurer earns $10,000,000 of premium in a year and incurs $7,500,000 of losses on that business. Its loss ratio is:
- A producer promises to add a water back-up endorsement, forgets to order it, and the client later suffers an uncovered basement loss. The producer's exposure is met by:
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