The principle of _____________ ensures that an insured does not profit by insuring with multiple insurers. a. Subrogation b. Co-insurance c. Indemnity d. Particular Average 5. ___________ may be described as a social device to reduce or eliminate the risk of loss to life and property. a. Investment b. Saving c. Insurance d. Loan 6. The document which embodies the contract in insurance is called ___________. a. Security b. Policy c. Certificate d. None of these 9. The principle of utmost good faith is also known as ____________. a. Subrogation b. Causa proxima c. Insurable interest d. Uberrima fides
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10. The indemnity principle means that the insured is not entitled to make a profit on his loss: a. subrogation b. causa proxima c. indemnity d. uberrima fides 11. The purpose of subrogation is to hold the negligent person responsible for the loss and prevent the insured from collecting twice for the same loss. a. subrogation b. causa proxima c. indemnity d. uberrima fides 12. The causa proxima principle in insurance mentions that the cause of loss must be direct and insured in order to claim for compensation. a. subrogation b. causa proxima c. indemnity d. uberrima fides 13. The insurable interest principle in insurance mentions that the assured must have insurable interest in the life or property insured. a. subrogation b. causa proxima c. indemnity d. insurable interest
Adi S.
Insurance Reimbursement An insurance policy reimburses a loss up to a benefit limit of $10 .$ The policyholder's loss, $Y,$ follows a distribution with density function: $$f(y)=\left\{\begin{array}{ll}{\frac{2}{y^{3}}} & {\text { for } y>1} \\ {0} & {\text { otherwise }}\end{array}\right.$$ What is the expected value of the benefit paid under the insurance policy? Choose one of the following. (Hint: The benefit paid will be equal to the actual loss if the actual loss is less than the limit. Otherwise it will equal the limit.) Source: Society of Actuaries. $\begin{array}{lllllll}{\text { (a) } 1.0} & {\text { (b) } 1.3} & {\text { (c) } 1.8} & {\text { (d) } 1.9} & {\text { (e) } 2.0}\end{array}$
Probability and Calculus
Expected Value and Variance of Continuous Random Variables
Insurance Reimbursement An insurance policy reimburses a loss up to a benefit limit of $10 .$ The policyholder's loss, $Y$ follows a distribution with density function: $$ f(y)=\left\{\begin{array}{ll}{\frac{2}{y^{3}}} & {\text { for } y>1} \\ {0} & {\text { otherwise }}\end{array}\right. $$ What is the expected value of the benefit paid under the insurance policy? Choose one of the following. (Hint: The benefit paid will be equal to the actual loss if the actual loss is less than the limit. Otherwise it will equal the limit.) Source: Society of Actuaries. $\begin{array}{llllll}{\text { a. } 1.0} & {\text { b. } 1.3} & {\text { c. } 1.8} & {\text { d. } 1.9} & {\text { e. } 2.0}\end{array}$
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