Risk Managers Working Outside the U

question 39

Multiple Choice

Risk managers working outside the U.S.often use admitted insurers,even when they are not legally required to do so by the foreign government. Why?

• A)even when the foreign government does not require it, the US government does
• B)this is part of the unwritten code of ethics that US risk managers voluntarily adhere to
• C)it results in both premiums and losses being expressed in terms of local currency
• D)because foreign insurance contracts are generally written in English

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Definitions:

Selling Expenses

Costs incurred directly and indirectly in making sales, including salaries, commission, advertising, and promotional materials.

Administrative Expenses

Operating expenses not directly tied to the production of goods or services, such as salaries of administrative staff, office supplies, and utilities.

Contribution Margin

The amount by which sales revenue exceeds variable costs. It represents the portion of sales that helps to cover fixed costs.

Bottleneck Hour

The time period in a production process where the flow is constricted due to limitations in capacity or resources, causing delays.