An insurer must receive an accurate premium, based upon an accurate accounting o

Question

An insurer must receive an accurate premium, based upon an accurate accounting of the risk assumed. For some line/types of policies this cannot be calculated until after the policy term. Which supporting function enables the correct calculation and charging of policies such as these?
Question 3 options:
  
1)    Actuarial
  
2)    Premium Auditing
  
3)    Investment
  
4)    Accounting and finance

State laws mandate certain financial requirements before a new insurer can be granted a license. Which of the following is an accurate statement?
Question 22 options:
  
1)    The minimum financial requirement applies only to surplus for mutual insurers but the initial surplus may not include borrowed funds
  
2)    Stock insurers must meet minimum initial capital and pain-in surplus requirements which can vary from state to state
  
3)    Reciprocal insurers are exempt from minimum financial requirements
  
4)    Risk-based capital requirements are unfair to property insurers

Explanation / Answer

Question 1:

Answer: Actuarial

Actuarial function determines the amount of premium for a particular policy. Actual function is generally carried out by underwriters. It includes various mathematical and scientific models that helps in determining the premium for a policy.

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