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21.Business interruption is an example of an indirect loss.

 

22.Any risk is insurable for a high enough premium.

 

23.Property/casualty insurers have a tax incentive to hold preferred stock.

 

24.Municipal bonds are a logical investment for “qualified” pension plans.

 

25.Liability risk is much easier to gauge than property risk.

 

26.The law of large numbers practically guarantees that an insurer will be profitable if it has enough policy holders.

 

27.“Fully contributory plans” are funded with employee contributions only.

 

28.All insurers must deal with the problem of adverse selection.

 

29.“Superannuation” is an unwelcome development to the underwriter of a life annuty.

 

30.Insurance is almost entirely regulated by state, not federal law.

 

 

31.Pure risk is very similar to speculative or investment risk that is related to the variability of returns. Therefore, the insured can possibly have a gain or a loss from the insurance policies.

 

32.The insured need to pay premium for insurance to protect their financial loss.  Therefore, insurance industry increases cost of bearing risk in society.

 

33.Policy reserves are the major asset of the typical life insurance companies.

 

34. Since insurance is an application of theorem of large number, the risk to be insured must be homogeneous, similar, fortuitous, and occurring by chance.

 

35.If you are terminated before you are fully vested in an employer-sponsored plan, you may not get to keep previous contributions to your pension made by your employer. 

 

 

 

 

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