Questions 1. Assume that you have limits of 15/25/15 ($15,000/$25,000/$15,000), the minimum required in the state where your car is garaged. If you are driving in a state that requires 25/50/20 ($25,000/$50,000/$20,000) and are involved in an accident, your insurer will interpret your policy as if it had the higher limits. Thus, even though you have to meet only the requirements where you live, your policy will provide the limits you need in any state or province in which you may be driving. Identify the provision in your automobile insurance policy that makes this possible. a. Indemnification b. Stacking c. Out-of-state d. Redlining e. Gentrification 2. This Act of 1986 directs that employers of more than twenty employees who maintain a group medical plan must allow certain minimum provisions for continuation of benefit coverage. The Act’s continuation provisions require that former employees, their spouses, divorced spouses, and dependent children be allowed to continue coverage at the individual’s own expense upon the occurrence of a qualifying event. Identify this Act. a. Consolidated Omnibus Budget Reconciliation Act b. Health Insurance Portability and Accountability Act c. American Recovery and Reinvestment Act d. Public Company Accounting Reform and Investor Protection Act e. Gramm Leach Bliley Act 3. This liability occurs in situations where the firm is liable for an independent contractor’s negligence because the firm did not use reasonable care in selecting someone competent. Identify it. a. Professional liability b. Premises liability c. Operations liability d. Contingent liability e. Nonownership liability 4. Which of the following types of annuities guarantees that the annuitant and/or beneficiary will receive, during the liquidation period, minimum payments equal to the single premium in an immediate annuity or the accumulation value in a deferred annuity? a. Temporary annuity b. Refund annuity c. Joint annuity d. Deferred annuity e. Structured settlement annuity 5. Which of the following reasons can be attributed to the long-term financing gap faced by the Social Security and Medicare programs? a. Increasing birth rates and health care costs b. Pay-as-you-go system and declining birth rates c. Traditional system and increased longevity d. Increased birth rates and declining longevity e. Increased morbidity and birth rates 6. If medical doctors fail to use reasonable care and diligence, and they fail to use their best judgment in exercising their skill and applying their knowledge, they are guilty of: a. malpractice. b. defamation. c. vilification. d. class-action. e. nonownership. 7. Liability stemming from activities of the firm in installing equipment or doing other jobs for hire off its own premises is called: a. professional liability. b. premises liability. c. completed operations liability. d. contingent liability. e. nonownership liability. 8. Flood insurance can be purchased through any licensed property or c ...

1. Questions
1. Assume that you have limits of 15/25/15
($15,000/$25,000/$15,000), the minimum required in the state
where your car is garaged. If you are driving in a state that
requires 25/50/20 ($25,000/$50,000/$20,000) and are involved
in an accident, your insurer will interpret your policy as if it
had the higher limits. Thus, even though you have to meet only
the requirements where you live, your policy will provide the
limits you need in any state or province in which you may be
driving. Identify the provision in your automobile insurance
policy that makes this possible.
a. Indemnification
b. Stacking
c. Out-of-state
d. Redlining
e. Gentrification
2. This Act of 1986 directs that employers of more than twenty
employees who maintain a group medical plan must allow
certain minimum provisions for continuation of benefit
coverage. The Act’s continuation provisions require that former
employees, their spouses, divorced spouses, and dependent
children be allowed to continue coverage at the individual’s
own expense upon the occurrence of a qualifying event. Identify
this Act.
a. Consolidated Omnibus Budget Reconciliation Act
b. Health Insurance Portability and Accountability Act
c. American Recovery and Reinvestment Act
d. Public Company Accounting Reform and Investor Protection
Act
e. Gramm Leach Bliley Act
3. This liability occurs in situations where the firm is liable for
an independent contractor’s negligence because the firm did not

2. use reasonable care in selecting someone competent. Identify it.
a. Professional liability
b. Premises liability
c. Operations liability
d. Contingent liability
e. Nonownership liability
4. Which of the following types of annuities guarantees that the
annuitant and/or beneficiary will receive, during the liquidation
period, minimum payments equal to the single premium in an
immediate annuity or the accumulation value in a deferred
annuity?
a. Temporary annuity
b. Refund annuity
c. Joint annuity
d. Deferred annuity
e. Structured settlement annuity
5. Which of the following reasons can be attributed to the long-
term financing gap faced by the Social Security and Medicare
programs?
a. Increasing birth rates and health care costs
b. Pay-as-you-go system and declining birth rates
c. Traditional system and increased longevity
d. Increased birth rates and declining longevity
e. Increased morbidity and birth rates
6. If medical doctors fail to use reasonable care and diligence,
and they fail to use their best judgment in exercising their skill
and applying their knowledge, they are guilty of:
a. malpractice.
b. defamation.
c. vilification.
d. class-action.
e. nonownership.

3. 7. Liability stemming from activities of the firm in installing
equipment or doing other jobs for hire off its own premises is
called:
a. professional liability.
b. premises liability.
c. completed operations liability.
d. contingent liability.
e. nonownership liability.
8. Flood insurance can be purchased through any licensed
property or casualty insurance agent or from some direct writing
insurers. Some insurers actually issue the flood insurance
policies, in partnership with the federal government, as a
service and convenience for their policyholders. In those
instances, the insurer handles the premium billing and
collection, policy issuance, and loss adjustment on behalf of the
federal government. Identify these insurers.
a. Stock insurers
b. Write Your Own insurers
c. Mutual insurers
d. High network insurers
e. Subrogate insurers
9. Identify exclusion (f) in bodily injury and property damage
liability in a commercial general liability policy.
a. Nonfortuitous liability
b. Contractually assumed liability
c. Liquor liability
d. Pollution liability
e. Workers’ compensation liability
10. Identify the hazard that generally exists when a person can
gain from the occurrence of a loss.
a. Causal hazard
b. Collective hazard
c. Physical hazard

4. d. Morale hazard
e. Moral hazard
11. In linear regression, if ‘X’ is the year (Year 1, 2, 3… and so
on), how would you calculate future claims?
a. Future claims = X + Slope + Intercept
b. Future claims = Slope + Intercept * X
c. Future claims = (Slope + Intercept)/X
d. Future claims = Intercept + Slope * X
e. Future claims = (Intercept + Slope) * X
12. This disability insurance policy provision coordinates
benefits under different disability policies by providing for a
reduction in benefit payments if the total amount of income
payments under all insurance policies covering the loss exceeds
earnings at the time disability commences, or exceeds the
average earnings for two years preceding disability, whichever
is greater. Identify this provision.
a. Coinsurance provision
b. Indemnity provision
c. Average earnings provision
d. stop-loss limit provision
e. coordination of benefits provision
13. Which of the following is covered by umbrella policies?
a. Personal injury liability
b. Obligations under workers’ compensation
c. Owned or rented aircraft without underlying coverage
d. Property damage to any property in the care, custody, or
control of the insured
e. Any act committed by or at the direction of the insured with
intent to cause personal injury or property damage
14. In product liability, negligence actions against
manufacturers surfaced once the _____ doctrine was removed.
a. assumption of risk

5. b. last clear chance
c. comparative negligence
d. attractive nuisance
e. privity
15. The linear regression model postulates that; Y = b + mX +
e. In this equation, what does ‘m’ stand for?
a. Y-intercept
b. Random variable with a mean of zero
c. Number of claims
d. Dollar amount per claim
e. Slope
16. If a person who receives payment from the insurer has the
right to recover damages from another, the insurer has the right
to:
a. gentrification.
b. subrogation.
c. redlining.
d. demutualization.
e. blockbusting.
17. During the liquidation or distribution period, annuity units
are exchanged for:
a. dollar value of annuity.
b. preference shares.
c. stock options.
d. unit plans.
e. accumulation units.
18. If the employees do not have enough credits for a cafeteria
plan, they can pay the additional cost through payroll deduction
on a pretax basis using a(n):
a. core plus plan.
b. premium conversion plan.
c. modular cafeteria plan.

6. d. 401(k) plan.
e. contributory modular plan.
19. The health savings account can be part of a health
maintenance organization, preferred provider organization, or
indemnity plan, as long as it has a:
a. 100 percent reimbursement guarantee.
b. second surgical opinion provision.
c. stop-loss limit.
d. high deductible.
e. coordination of benefits provision.
20. _____ annuity is a special type of single premium
immediate annuity issued by a life insurer and its terms are
negotiated by the plaintiff, the defendant, and their attorneys.
a. Structured settlement
b. Accumulated
c. Surrender value
d. Unstructured resolution
e. Flexible resolution
21. The Social Security funding burden is being borne by a
shrinking sector of society because:
a. mortality rates have increased and longevity has declined.
b. birth rates have increased and death rates have decreased.
c. longevity has increased and birth rates have declined.
d. mortality and birth rates have increased.
e. longevity has increased and morbidity rates have declined.
22. Homeowners policies exclude loss caused by flood due to
the problem of adverse selection because:
a. only large insurers would be able to insure flood risk,
creating unfair competition.
b. only those living in flood-prone areas would buy the
coverage.

7. c. it encourages nonfortuitous events.
d. only stock insurers would insure flood risk.
e. only mutual insurers would insure flood risk.
23. Which of the following statements correctly differentiate
between perils and hazards?
a. Perils refer to the number of losses during a specified period
and hazards refer to the average dollar value of a loss per
occurrence.
b. Both perils and hazards are causes of loss; perils are tangible,
hazards are intangible.
c. Perils are causes of loss; hazards are conditions that increase
perils.
d. Perils are diversifiable risks; hazards are nondiversifiable
risks.
e. Perils are consequences of losses; hazards are cause of losses
24. The difference between the life expectancy and healthy
adjusted life expectancy is a measure of the average equivalent
number of years lost due to:
a. bad health and disability.
b. a bad economy.
c. bad health excluding disability.
d. death of a breadwinner in the family.
e. to disability excluding bad health.
25. Which of the following life insurances is usually offered as
a supplement to a separate program of group term benefits?
a. Group yearly renewable
b. Group whole
c. Group variable
d. Group universal
e. Group limited-payment
26. The linear regression model postulates that; Y = b + mX +
e. In this equation, ‘b’ stands for:

8. a. the y-intercept.
b. A random variable with a mean of zero.
c. the number of claims.
d. the dollar amount per claim.
e. the slope.
27. Identify the coverage that fills in the coverage gap that
arises when the negligent party meets the financial
responsibility law of the state, but the auto accident victim has
losses in excess of the negligent driver’s liability limit.
a. Stacking coverage
b. Supplementary motorist coverage
c. Nonfortuitous coverage
d. Underinsured motorist coverage
e. Uninsured motorist coverage
28. In a population pyramid, a pyramid with a very large base
would mean a large number of:
a. old people.
b. smokers.
c. young children.
d. working individuals.
e. females.
29. In addition to covering an insured’s liability due to bodily
injury or property damage, the insurer promises to defend
against suits claiming such injuries. The insurer’s obligation to
defend against liability ends when:
a. the claims are filed after the retroactive date.
b. a number of exclusions are intended to standardize the risk
and/or to limit duplicate coverage.
c. it has paid out its limits for any of the coverages in
settlements or judgments.
d. the claims are filed after the extended reporting period.
e. the time lag between premium payments and loss payments is
smaller.

9. 30. These accounts allow employees to pay for specified
benefits with before-tax dollars. In the absence of a these
account, the employee would have purchased the same services
with after-tax dollars. They can either add flexibility to a
cafeteria plan or can accompany traditional benefit plans with
little other employee choice. Identify these accounts.
a. Modular plus accounts
b. Premium conversion accounts
c. Core plus accounts
d. Modular conversion accounts
e. Flexibility spending accounts
31. Which of the following statements is true about cafeteria
plans?
a. Modular cafeteria plans are more flexible than the core plus
cafeteria plans.
b. Long-term care is included in cafeteria plans, while a 401(k)
plan is excluded.
c. If there are not enough credits, the employee can pay the
additional cost through payroll deduction on a pretax basis
using a modular conversion plan.
d. The flexible spending account is part of a cafeteria plan.
e. A core plus cafeteria plan requires less administrative cost
than a modular cafeteria plan.
32. If the commercial general liability policy is a(n) _____
policy, it will cover liability for events that take place within
the policy period, regardless of when the plaintiff makes a
claim.
a. actual cash
b. claims-made
c. extended replacement
d. occurrence
e. replacement

10. 33. Which of the following is true about the age structure and
the population pyramid of China?
a. It has a fully reversed age pyramid.
b. It has an age structure similar to that of a young, developing
country.
c. It has experienced the natural evolutionary baby boom.
d. It has a rectangular-shaped population pyramid rather than an
inverted pyramid.
e. It has an age structure similar to that of a mature, developed
country.
34. This ISO’s liability program, available to all ISO-
participating insurance companies, was filed with state
insurance regulators for approval effective April 1, 1998. It was
the newest line introduced in more than twenty years. Because
of an increase in the number of lawsuits filed for sexual
harassment and similar liability suits, the coverage became
imperative to most businesses. Identify this insurance coverage.
a. Employment practices liability program
b. Capital asset liability program
c. Professional liability program
d. Inland marine liability program
e. Business owners liability policy
35. Title I of this Act of 1996 protects employees who change
jobs from having to start a new waiting period before a
preexisting condition is covered. After the enactment of this
Act, a person with diabetes could change jobs, and health
insurance providers, without fear of losing coverage on that
specific condition. Identify this Act.
a. Public Company Accounting Reform and Investor Protection
Act
b. Sarbanes Oxley Act
c. Health Insurance Portability and Accountability Act
d. Consolidated Omnibus Budget Reconciliation Act
e. American Recovery and Reinvestment Act

11. 36. You own an annuity plan that gives you the freedom to
change the amount of contributions, stop contributions, and
resume them at will. This plan is called:
a. single premium deferred annuity.
b. single premium immediate annuity.
c. flexible premium deferred annuity.
d. accumulation annuity.
e. variable premium annuity.
37. Carelessness or lack of concern can be categorized as a:
a. causal hazard.
b. collective hazard.
c. physical hazard.
d. morale hazard.
e. moral hazard.
38. The health savings account can be part of a health
maintenance organization, preferred provider organization, or
indemnity plan, as long as it has a:
f. 100 percent reimbursement guarantee.
g. second surgical opinion provision.
h. stop-loss limit.
i. high deductible.
j. coordination of benefits provision.
Final Examination FINC 352
Mini-Case Study
KEN AND BARBARA JONES
PERSONAL INFORAMTION AND BACKGROUND
Ken Jones, 47 years old, and Barbara Jones, 44 years old, have
been married for 19 years. They have two children, John and
Joan Jones, ages 17 and 15 respectively. The Jones own two
cars and a five-bedroom home located in Silver Spring,

12. Maryland. Ken owns a financial advisory firm, Jones Wealth
Management, and Barbara works as the vice president for
Computer Technologies, a local computer consulting firm.
Ken Jones started Jones Wealth Management 12 years ago. He
works as a financial planner and has four employees working
for him. He owns the building where Jones Wealth Management
is located.
Barbara Jones has been vice president of Computer
Technologies for five years. Her previous employer, Advanced
Technology Networks, took out and paid the premiums on a key
person life insurance policy on Barbara. Advanced Technology
Networks remains the owner and beneficiary of the policy on
Barbara’s life, but Barbara has the right to buy the policy for its
cash value when she retires.
The Jones estimate that the cost to educate John and Joan Jones
at state university will be $45,000 and $55, 000 respectively.
PROPERTY AND CASULATY INSURANCE INFORMAITON
Car
100/300/50 Liability limits
$10,000 Medical payment
$250 Comprehensive Deductible
$500 Collision Deductible
100/300 Uninsured Motorists
100/300 Underinsured Motorists
Ken is the principal driver
Truck
10/100/50 Liability Limits
$10,000 Medical Payments
50/100 Uninsured Motorists
50/100 Underinsured Motorists
Barbara is the principal driver

13. Home
Homeowner’ Insurance (1)
HO-3 Policy Form $1,000 Deductible
$256,000 Dwelling
$25,600 Other Structures
$100,000 Liability
$1,000 Medical Payments
$2,000 Personal computer coverage on valued
basis (2)
(1) The replacement cost is $370,000
(2) Depreciation on the computer equals $1,000
LIFE INSURANCE INFORMATION
Ken Jones
Ken Jones has a universal life policy that he bought 12 years
ago when he started his business. The face value of his policy is
$500,000. The policy currently has $61,000 cash value. Ken has
paid $5,000 per year in annual premiums since the policy’s
inception. Barbara is the primary irrevocable beneficiary, and
John and Joan are contingent beneficiaries. Ken also own a
deferred annuity that will make payments for 10 years. Ken
purchased this deferred annuity several years ago (3). The
annuity is currently worth $50,000, and annual payments are
expected to be $6,000 per year starting on Ken’s 62nd birthday.
Ken is also shopping for some additional life insurance so that
money would be available to fund the college education ofr
John and Joan if something were to happen to Ken.
(3) The annuity was purchases with a $35,000 lump-sum
payment
Barbara Jones
Barbara owns a whole life policy that she bought eight years
ago. The face value of her policy is $250,000. The policy
currently, has $1,200 in dividends and $5,500 in cash value.
Barbara has paid $1,000 per year in premiums since the policy’s
inception. Ken is the primary beneficiary of the policy. Barbara

14. also participates in a split-dollar insurance plan for executives
at Computer Technologies. The plan was set up five-years ago
when Barbara joined the company. Barbara owns the policy, and
Ken is the beneficiary.
HEALTH INSRUANCE POLICY INFORMATION
Ken Jones
Ken recently purchased an individual disability income policy
that uses a split definition of disability. The policy has a 60-day
elimination period and a benefit period of five-years. Ken is
also interested in purchasing long-term care insurance and has
recently priced some policies. He is also interested in
purchasing a long-term care policy with the lowest possible
premiums and a short waiting period.
Barbara Jones
Barbara carries major medical coverage for the entire family
through Computer Technologies. The family calendar year
deductible is $500, and the policy has an 80 percent so
insurance provision. The coinsurance stop-loss provision limits
the Jones’ total out-of-pocket costs per calendar year to $5,000
plus any deductibles. Barbara has recently considered
purchasing a disability income policy. Her primary concern is a
reduction in her income due to total disability or a less-than-
total disability and decreased work capacity. Her goal is to keep
premiums relatively low.
39. Ken and Barbara were hosting a barbeque in their backyard,
when the fire in the barbeque pit escalated out of control and
caused $64,000 of fire damage to their house. The neighbor’s
house also suffered damages of $10,000. The neighbor collected
from his own homeowner’s insurance policy for damages to his
house. His insurer then brought action against Ken and Barbara
for repayment. The neighbor’s insurance company demonstrated
what principle?
A. Indemnity

15. B. Insurable interest
C. Adverse selection
D. Subrogation
40. Which of the following is a risk reduction technique that
Ken could use to help lower his insurance premiums?
A. Increase the deductible on his auto insurance policy
B. Use hold-harmless agreements in leases.
C. Install a security system in his home.
D. Cover employee theft losses out of business income.
41. Which of the following would help Ken lower his
homeowner’s insurance premiums?
A. Changing his policy to an HO-5
B. Changing his dwelling coverage to broad from open-perils
coverage
C. Changing his liability coverage limit to $200,000
D. Changing his personal property coverage to open-perils
42. Barbara was in the Jones’ detached garage, starting the lawn
mower, when the lawn mower caught fire and burned the
garage. Damages to the garage totaled $10,000. What was the
insurance company’s payout to the Jones for the loss to the
garage?
A. $9,000 under Coverage A
B. $9,000 under Coverage B
C. $7,649 under Coverage A
D. $7,649 under Coverage B
43. In December 2014, John Jones was driving the truck when
he pulled into an intersection and hit another car. Two teenage
girls were in the other car. One girl sustained injuries totaling
$65,000, and the other girl sustained injuries totaling $23,000.

16. The girls were driving a car that also sustained $12,000 in
damages. John sustained injuries totaling $4,000, and damages
to the truck totaled $3,000. What is the maximum that the
insurance company could be required to pay out to the other
parties in John’s auto accident?
A. $99,500
B. $88,000
C. $85,000
D. $84,500
44. What was the insurance company’s total payout to John for
the December 2014 auto loss?
A. $0 because John was at fault
B. $4,000 under Liability coverage
C. $4,000 under Medical Payments coverage
D. $7,000 under Medical Payments and Liability coverages
45. In February 2014 Barbara was feeling ill and was admitted
to the hospital. It was determined that she had appendicitis, and
an appendectomy was performed. Barbara’s hospital bill totaled
$7,000, including $100 for books Barbara bought from the
hospital gift shop. Next, in November 2014 Barbara caught
pneumonia and was hospitalized for three weeks. Barbara’s
hospital bill totaled $22,000. During Barbara’s hospital stay,
how much out-of-pocket expenses were incurred for the.
November 2014 claim?
A. $17,200
B. $4,800
C. $4,400
D. 3,720
46. Which of the following changes would help Ken lower his
disability insurance premiums with the least effect on his
coverage?
A. Changing his definition of disability to an own occupation
definition

17. B. Changing his definition of disability to an any occupation
definition
C. Changing his benefit period to 10-years
D. Changing his elimination period to 90-days
47. Which of the following long-term care policies would be
most appropriate for Ken?
A. $100 daily benefit with a two-year benefit period and a 90-
day elimination period
B. $250 daily benefit with a five-year benefit period and a 30-
day elimination period
C. $100 daily benefit with a one-year benefit period and a 30-
day elimination period
D. $150 daily benefit with a three-year benefit period and no
elimination period
48. Which of the following is correct concerning Ken’s current
beneficiary designation on his life insurance policy?
A. If Barbara and the children are still living when Ken dies,
the life insurance death benefit will be split evenly among them
all.
B. If Barbara predeceases Ken, the children will receive the life
insurance proceeds after Ken dies and must pay estate taxes on
the proceeds.
C. Ken has the right to assign his policy to whomever he wishes
without the consent of any of his beneficiaries
D. If John predeceases Ken, Barbara will receive the life
insurance proceeds
49. If Barbara Jones dies next year, which of the following
statements is correct?
A. The key person policy on her life is payable to Ken income –
tax free.
B. Ken can buy the key person policy at Barbara’s death for its

18. cash value.
C. Advanced Technology Networks (her previous employer) can
deduct the premiums on the key person policy up to the first
$50,000 of coverage
D. Advanced Technology Networks will receive the proceeds of
the key person policy income-tax-free but possibly subject to
the corporate alternative minimum (ATM) tax.
50. If Ken surrenders his life insurance policy for its cash
value, what would he report on his income tax?
A. $1,000 ordinary income
B. $1,000 capital gain
C. $3,500 ordinary income
D. $3,500 capital gain
Term Paper: Website Migration Project
Due Week 10 and worth 200 points Tony’s Chips has recently
been sold to a new independent company. The new company has
hired you to manage a project that will move the old Website
from an externally hosted solution to an internal one. The
company’s leadership is very concerned about redundancy for
their site, insisting that a back-up site be available as a failover
in case the main site goes down. In addition, they want the site
redesigned to allow customers to order products online.
As part of your job, you must complete a 10-to-15 page paper
that follows this project through the system development life
cycle (SDLC). This assignment will require you to do the
following:
· Discuss what it will take to build a Web architecture, move an
existing Website with minimal downtime, and provide a disaster
recovery solution to ensure the site is always available.
·

19. . The Web architecture should describe and justify operating
system choices (i.e., Linux, Apache, MYSQL, PHP, Windows,
IIS, SQL, etc.).
· Evaluate alternatives to the company self-hosting the site.
· Build a Gantt chart using Microsoft Project or equivalent
software, showing all tasks associated with implementing the
Website.
· The chart should include a minimum of five (5) tasks, each
with three (3) sub-tasks.
· Explain and justify the system architecture you have selected.
· Illustrate the system architecture using Visio or equivalent
software.
· Create a use case that documents the event of a customer
ordering a bag of chips from the new Website.
· The use case should include a graphical representation using
Visio or equivalent software and a text description of the
events.
· Discuss the support operations that the internally hosted
Website will require after implementation.
· Explain how you will evaluate the performance of the new site
and the success of your project.