Insurance Terms and Definitions, Quizzes of Credit and Risk Management

Download Insurance Terms and Definitions and more Quizzes Credit and Risk Management in PDF only on Docsity! TERM 1 insurance DEFINITION 1 the pooling of fortuitous losses by transfer of such risks to insurers, who agree to indemnify insureds for such losses TERM 2 pooling of losses DEFINITION 2 spreading of losses incurred by the few over the entire grouprisk reduced by the law of large numbers TERM 3 payment of fortuitious losses DEFINITION 3 insurance pays for losses that are unforseen, unexpected, and occur as a result of chance TERM 4 indemnification DEFINITION 4 the insured is restored to his or her approximate financial position prior to the occurrence of the loss TERM 5 large number of exposure units DEFINITION 5 to predict average loss TERM 6 accidental and unintentional loss DEFINITION 6 to control moral hazardto assure randomness TERM 7 determinable and measurable loss DEFINITION 7 to fascilitate loss adjustment TERM 8 no catastrophic loss DEFINITION 8 to allow the pooling technique to workexposures to catastrophic loss can be managed TERM 9 calculable chance of loss DEFINITION 9 to establish an adequate premium TERM 10 economically feasible premium DEFINITION 10 so people can afford to paypremium must substantially less than the face value of the policy