Which of the following statements is (are) true with regard to Roth IRAs?
I. The portion of a Roth IRA distribution that is attributable to investment income is
taxable.
II. There is a maximum income level above which Roth IRA contributions are not
allowed.
A) I only
B) II only
C) both I and II
D) neither I nor II
Factors a risk manager must consider in selecting an insurer include which of the
following?
I. The availability of risk management services
II. The financial strength of the insurer
A) I only
B) II only
C) both I and II
D) neither I nor II
Under certain conditions, the wrongful acts of one person can be attributed to another
person. This practice is called
A) imputed negligence.
B) mediation.
C) comparative negligence.
D) strict liability.
Which of the following statements concerning the selection of risk management
techniques and insurance market conditions is (are) true?
I. It’s easier to purchase affordable insurance during a ‘soft ” market than during a
“hard” market.
II. Retention is used more during a ‘soft” market than during a “hard” market.
A) I only
B) II only
C) both I and II
D) neither I nor II
Daryl, age 42, quit his job. His employer offered a defined contribution pension plan,
and the balance in the account was $30,000 when Daryl quit. He can avoid immediate
taxation of these funds by
A) taking a lump-sum distribution.
B) using an IRA rollover account.
C) receiving the money through four equal installments.
D) using the funds to purchase common stock issued by the former employer.
Roger owns some farmland that he rents to a tenant. The tenant lives in an old
farmhouse on the property and raises crops on the land. Roger is concerned about
possible legal liability if the tenant injures someone. Roger requires the tenant to have
liability insurance and to add himself to the liability coverage through an endorsement.
Under the tenant’s liability insurance, Roger is a(n)
A) additional insured.
B) first-named insured.
C) second-named insured.
D) other insured.
Which of the following statements about the characteristics of social insurance
programs is true?
A) Benefits are loosely related to a worker’s earnings.
B) Benefits are paid primarily on the basis of individual equity.
C) Participation in social insurance programs is voluntary.
D) Social insurance programs must be fully funded at all times to pay required benefits.
Under the Affordable Care Act, if a health insurer does not meet the minimum loss ratio
requirement, the insurer must
A) pay a fine to the federal government.
B) issue rebates to the people the insurer covered.
C) not sell any health insurance for a period of one year.
D) reduce the premium on the policies it sells the following year.
An integrated risk management program is a risk management program which
combines
A) pure and speculative risks.
B) property and liability risks.
C) personnel-related risk and property risk.
D) direct and indirect loss risk.
Which of the following is (are) included among the duties of an insured following a loss
covered under the Homeowners 3 policy?
I. To file a proof of loss within a specified time period after the insurer’s request
II. To prepare an inventory of damaged personal property
A) I only
B) II only
C) both I and II
D) neither I nor II
A-1 Electrical Service is an electrical contractor that employs 14 electricians. A-1 faces
many loss exposures. One general liability exposure arises out of faulty work that A-1
electricians may perform for customers at their homes or businesses. This liability
exposure is known as
A) premises and operations liability.
B) products liability.
C) completed operations liability.
D) contingent liability.