- What is the difference between eligibility and acceptability? (4)
Acceptability is concerned with the expectations of the identified stakeholders with the expected performance outcomes, which can be return, risk and stakeholder reactions. However, Eligible business means a start-up company, an early-stage company, or an existing company that is developing a new product or technology.
2-Provide a brief definition of Pure Premium. (2)
Pure Premium is the amount of money an insurer must pay to cover claims, including the costs to administer and investigate such claims. Loss cost, along with other items, is factored in when calculating premiums.
3. What is the difference between frequency and severity? (4)
Frequency refers to the number of claims an insurer anticipates will occur over a given period of time. Severity refers to the costs of a claim a high-severity claim is more expensive than an average claim, and a low-severity claim is less expensive
4-What is the difference between named perils coverage and open perils coverage? (4)
Named Perils provides coverage only for those perils listed in the policy, such as fire, theft, falling objects and vandalism. Open Perils provides insurance coverage for any reason not specifically excluded.
5. What is the difference between replacement cost and actual cash value? (4)
Replacement cost is what you would pay for the item at today’s cost. Actual cash value is what you would pay for a similar item at today’s cost minus depreciation.
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