The Ideal Insurance System

question 57

Multiple Choice

The ideal insurance system:

• A) reduces the probability of accidental and fortuitous losses due to increased predictability
• B) requires the transfer of a large number of exposures to loss to a pool, where a fund exists in advance of losses having to be paid
• C) works best when a large proportion of the participants in the pool submits a claim
• D) eliminates all hazards

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Definitions:

Birth Rate

The number of live births per thousand of the population in a given year.

Divorce Rates

A statistical figure that represents the number of divorces occurring within a population during a given time period, often expressed per 1,000 inhabitants or as a percentage of marriages.

Three Mile Island

Nuclear power plant near Harrisburg, Pennsylvania, site of 1979 accident that released radioactive steam into the air; public reaction ended the nuclear power industry’s expansion.

Nuclear Plant

A facility that generates electricity by using nuclear reactors to produce steam that drives turbine generators.