This document contains summaries of answers to 6 questions about risk management methods, elements of life insurance organizations, types of medical insurance policies, pricing objectives and elements in insurance, insurable interest and its creation, and the role of insurance in managing risk financing. The summaries discuss loss control, internal risk reduction, legal status of organizations, individual and group medical policies, rate adequacy, insurable interest in common law, and risk transfer from businesses and individuals to insurance providers.

1. Get Answers of following Questions here
Master of Business Administration- smude MBA Semester 4 spring 2015
MF0018 & INSURANCE AND RISK MANAGEMENT
Q1. Explain the risk management methods.
Answer: Risk Management Methods
These methods are not mutually exclusive and may be largely categorized as:
• Loss control
• Loss financing
• Internal risk reduction
Usually, loss control and internal risk reduction include the decisions to invest (or forgo investing) resources to
cut down the expected losses. These are theoretically similar to other investment decisions, such as a company’s
decision to purchase a new plant or an …
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Q2. An organization is a legal entity which is created to do some activity of some purpose. There are
elements of a life insurance organization. Explain the elements of life insurance organization.
Answer: Elements of a Life Insurance Organization
An ‘organization’ is a legal entity which is created to do some activity or to achieve some purpose. It is created
under some law, which gives it a status and identity. Because of the identity, the organization is considered to be
a person in law. Therefore, it can …
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Q3. Insurance is the most important industry. Elaborate the different types of mediclaim and liability
policies.
Answer: Types of Mediclaim/Health Policy
Individual mediclaim policy
Individual and group mediclaim policies are similar in scope and nature. These policies provide for
reimbursement of hospitalization/domiciliary hospitalization expenses for illness/disease suffered or accidental
injury sustained during the policy …
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Q4. Give short notes on:
• Pricing objectives.
• Pricing elements.
• Rate computation
Answer:
Pricing objectives
I. Rate adequacy: To avoid financial problems and insolvency, insurance company rates must be adequate in
the light of benefits promised under the company’s insurance products. Rate adequacy means that for a given
block of policies, total payments collected now …
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Q5. Explain the creation and application of insurable interest. Give the differences between wagering and
insurance.
Answer: Creation of insurable interest
There are a number of ways in which insurable interest will arise or be limited:
(a) By common law: Where the essential elements of insurable interest are automatically present, the same can
be described as having arisen at common law. The common l…
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Q6. Identify the role of insurance in managing risk financing. Explain the importance of insurance
transaction. Discuss in different perspectives of insured and insurer
Answer: Role of insurance in managing risk financing

2. Business organizations and individuals take insurance policies. These insurance policies help them to cover the
losses in case of any emergency. Here, the idea is to transfer the risk involved with the business to the insurance
provider by taking an insurance …
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