- What is the meaning of the term reinsurance?
- Explain the reasons for reinsurance.
- Explain the term securitization of risk.
What unfair trade practices are each of the following insurance agents violating? Explain the terms that you use.
- Agent Jones offers a client to pay a portion of the premium if the client purchases a policy.
- Agent Peterson convinces a client to replace a life insurance policy with a new policy that adds little value.
Julia owns a building worth $800,000. She insures the building for $300,000 with Company A, $400,000 with Company B, and $100,000 with Company C. There is a fire, and the building sustains $100,000 in damage.
- How much will Julia collect in insurance?
- How much will each company pay?
- What insurance term describes this situation?
- What is its purpose?