Which of the Following Statements Best Reflects the Concept Behind

question 91

Multiple Choice

Which of the following statements best reflects the concept behind the rule of indemnity?

• A) If a large number of people are exposed to the same risk, a predictable number of losses will occur during a given period of time.
• B) If a written contract exists between the insured and an insurance company, the insured is entitled to receive the maximum amount stated in the contract in the event of a loss.
• C) If an insurance company's premiums generate excess funds, these excess funds must be returned to the policyholders in the form of dividends or reductions in future premiums.
• D) An insured person cannot collect more than the actual loss from an insurable risk.

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Definitions:

Average Workers' Pay

The mean wage earned by employees in a specific job, industry, or region, calculated by dividing total wages by the number of workers.

Pay Structure

The organization of different levels of pay within a company or industry, usually based on factors like experience, education, and performance.

Market Rate

The average cost or compensation for a particular job or service in the broader market or industry.

Lateral Career Moves

Moves within a company or organization to roles of similar rank and pay, typically to gain a broader range of experience or skills.