Iowa Life and Health Insurance Test Questions With Complete Solutions A group sharing the possibility of a loss. Risk transferred from individual to group. - Correct Answers ✅Risk Pooling The principle that the larger the number of individual risks in a group, the more certainty there is as to the amount of loss incurred in any period. This is based on the science of probability and the experience of mortality and morbidity statistics. - Correct Answers ✅Law of Large Numbers Involves the chance of both loss or gain. - Correct Answers ✅Speculative Risk Involves only the chance of loss, no possibility of a gain or profit. - Correct Answers ✅Pure Risk Immediate specific event that causes a loss. - Correct Answers ✅Peril Anything that increases the likelihood of loss through peril. - Correct Answers ✅Hazard a physical condition that increases the frequency or severity of loss - Correct Answers ✅Physical Hazard When the actions of the insured increase the likelihood that a loss will happen - Correct Answers ✅Moral Hazard 1 / 2
Iowa Life and Health Insurance Test Questions With Complete Solutions A condition of carelessness or indifference that increases the frequency or severity of loss. - Correct Answers ✅Morale Hazard Pure only because speculative involves a chance of gain. - Correct Answers ✅Which type of risk is insurable? Pure or speculative?Insurance company characterized by the fact its policyholders insure the risks of other policyholders. - Correct Answers ✅Reciprocal Insurer an arrangement by which an insurance company transfers or sells a portion of the risk to another insurer. - Correct Answers ✅Reinsurer An insurance company that conducts business in the state of incorporation. - Correct Answers ✅Domestic Insurer An insurer licensed to operate in a state but incorporated in another state. - Correct Answers ✅Foreign Insurer An insurer domiciled in a country other than the United States. - Correct Answers ✅Alien Insurer
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