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HS311 - Ch2
Managing Risks
| Question | Answer |
|---|---|
| Risk Management | The systematic process for dealing with risk |
| Enterprise Risk management | The approach to managing all of an organizations risks (pure hazardsa and speculative risks) and opportunities in order to maximize the organizations value |
| Risk Control | Risk management techniques used to minimize the frequency and severity of losses. |
| Loss Reduction | Risk control measure that aims to reduce the severity of loss |
| Noninsurance transfers | Risk control measure that uses a contract other than an insurance contract. |
| Risk Financing | Techniques used to pay for any losses that do occur. |
| Risk Retention | Risk financing method whereby a person or organization keeps, or retains, the financial burden of any loss rather than transferring them to an insurer or other party |
| Deductable | The initial portion of a covered loss borne by the insured |
| Self-Insurance | Formal programs of risk retention |
| Captive Insurer | A separate subsidiary insurance company established to write its own insurance |
| Risk Transfer | Loss financing method that shifts risk to some other party |
| Hold harmless Agreement | A type of non-insurance transfer whereby the transferee agrees to hold the transeror harmless in case of legal liability to others |
| Insurance Equation | The equality between the sources and uses of income: Premiums+Investment Earnings+Other Income = Covered Losses+Cost of doing Business+Profits |
| Credibility | The degree of reliability places on past experience to predict what will happen in the future |
| Risk Financing | Risk Retention & Risk transfer |
| Risk Avoidance | Is the most extreme form of risk control whereby a party decides not to incur a loss exposure or to eliminate one that already exists |
| Loss Prevention | Risk control measure intended to lower the probability of loss or the frequency with which a given type of loss occurs |
| Mortality | The relative incidence of death |
| Morbitity | The relative incidence of disease |
| Risk Identification | The careful and systematic discovery of all risks that confront a household or organization |
| Maximum Possible loss | The worst loss that could happen |
| Third-Party Administrator (TPA's) | A firm that administers self-insurance programs for a fee |
| Voluntary Benefits | Benefits made available to employees for an additional fee |
| Cafeteria Plans | A plan which allows employees to choose among several different types of benefit options |
| Premium-Conversion Plan | Paying for additional benefits with salary reductions |
| Flexible Spending Accounts (Sec 125 Plans) | A plan that allows employees to pay for certain types of non-insurance expenses with pre-tax dollars |
| Maximum probable loss | The worst loss that is likely to happen |
Created by:
djseibel
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