Reference no: EM132932765

1) a. Explain the law of large numbers.

b. What is the meaning of adverse selection? Name two methods that insurers use to control adverse selection.

2) a) Briefly explain the basic principles of underwriting.

b) Briefly describe the following types of claim adjustors:
i) Company adjustor
ii) Independent adjustor
iii) Public adjustor
iv) Agent

3) Explain why the insurance industry is regulated.

4) Briefly explain the six characteristics of an ideally insurable risk.

5) How does the principle of insurable interest help to reduce moral hazard?

6) Differentiate between waiver and warranty.

7) a) What is the difference between peril and hazard?

b) Define physical hazard, moral hazard, attitudinal hazard and legal hazard.

8) Describe the following types of deductibles:
i) straight deductible
ii) calendar-year deductible
iii) aggregate deductible