Facultative reinsurance

• is a long term agreement

• is a case by case consideration of each risk

• applies only for a certain portfolio

• applies for a certain class

A “line guide”

• contains the criteria to accept or reject a risk

• is the same as the insurer's strategic plan

• is not linked to the insurer's strategic plan at all

• is informed by market considerations only

Hammurabi was from

• Elam

• Sumeria

• Babylon

• Uruk

Which of the following is NOT an underwriting function

• Investor of Capital

• settling claims

• accepting and rejecting risk

• portfolio building

Capacity in a line guide, refers to

• Capital

• Price

• Rate

• Premium

physical hazards can be partly eliminated by installing all of the following except

• fire extinguishers

• security cameras

• smoke alarms

• splinker systems

Risk is divided into all the following except

• Personal

• Property

• Indirect

• Liability

An underwriter can reject a risk if

• a loss occurs after renewal

• it is a soft market and there is a lot of capacity

• it is a zero deductible and the insured does not need to pay

• it falls short of minimum requirements in the line guide

Personal risks encompass the chance of loss from

• Unemployment

• Automobile

• Lost rent

• stolen stereo

Moral hazards include

• Old roof

• leaky pipes

• outdated factory equipment

• cluttered stairs