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IIC Principles and Practice of Insurance Sample Questions:
1. Which statement reflects the concept that the premium for each risk should be commensurate with that risk?
A) One or more persons should provide protection to another person against loss
B) Risks can happen to anyone, so each individual should purchase insurance
C) Proper settlement of losses should be paid out of the pool of funds
D) Risks more likely to have losses should pay higher premiums
2. Which insurance industry impact is an example of a surety?
A) A developer advancing funds to a building contractor for a guaranteed project
B) A manufacturer accepting shipping risks that are insured
C) A bank issuing a mortgage on an insured building
D) A doctor providing malpractice-covered services
3. What is the definition of subrogation?
A) The right of the insurer to take action against the insured in cases of fraud
B) The process allowing an insurer that paid a claim to recover the amount from the legally responsible party
C) The full payout an insurer makes before receiving the deductible
D) A promise by one party to release another from responsibility in exchange for money
4. What is a post-loss objective of risk management for an organization?
A) Peace of mind
B) Internal obligations
C) External development
D) Stable earnings
5. Which peril of operating a business is insurable?
A) Cybersecurity
B) Product obsolescence
C) Mismanagement
D) Under-capitalization
Solutions:
| Question # 1 Answer: D | Question # 2 Answer: A | Question # 3 Answer: B | Question # 4 Answer: D | Question # 5 Answer: A |


