Insurance Companies' Attempts to Minimize Adverse Selection and Moral Hazard

question 71

Multiple Choice

Insurance companies' attempts to minimize adverse selection and moral hazard explain which of the following insurance practices?

• A)risk-assessment screening
• B)risk-based premiums
• C)restrictive provisions
• D)all of the above
• E)only A and B of the above

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Definitions:

Fallacy Of Composition

The logical error of assuming that what is true for the individual parts must also be true for the whole group.

Slippery Slope Fallacy

A logical fallacy that asserts without sufficient evidence that a relatively small first action leads inevitably to a chain of related (negative) events.

Predicted Outcome

A predicted outcome is the expected result of an experiment or model, often based on theoretical insight or previous data.

Hasty Generalization

A fallacy in which a conclusion is not logically justified by sufficient or unbiased evidence.