国开《高级商务英语阅读》阶段学习测验（第7章，5%）

Read the following passage and then match the statements (1-7) to the letter (A, B, C or D).

A     Risks which can be insured by private companies typically share the following common characteristics:

Large number of similar exposure units: Since insurance operates through pooling resources, the majority of insurance policies are provided for individual members of large classes, allowing insurers to benefit from the law of large numbers in which predicted losses are similar to the actual losses. Exceptions include Lloyd’s of London, which is famous for insuring the life or health of actors, sports figures and other famous individuals. However, all exposures will have particular differences, which may lead to different premium rates.

B     Definite loss: The loss takes place at a known time, in a known place, and from a known cause. The classic example is death of an insured person on a life insurance policy.

Fire, automobile accidents, and worker injuries may all easily meet this criterion. Other types of losses may only be definite in theory. Occupational disease, for instance, may involve prolonged exposure to injurious conditions where no specific time, place or cause is identifiable. Ideally, the time, place and cause of a loss should be clear enough that a reasonable person, with sufficient information, could objectively verify all three elements.

C     Affordable premium: If the likelihood of an insured event is so high, or the cost of the event so large, that the resulting premium is large relative to the amount of protection offered, it is not likely that the insurance will be purchased, even if on offer. Further, as the accounting profession formally recognizes in financial accounting standards, the premium cannot be so large that there is not a reasonable chance of a significant loss to the insurer. If there is no such chance of loss, the transaction may have the form of insurance, but not the substance.

D     Limited risk of catastrophically large losses: Insurable losses are ideally independent and non-catastrophic, meaning that the losses do not happen all at once and individual losses are not severe enough to bankrupt the insurer; insurers may prefer to limit their exposure to a loss from a single event to some small portion of their capital base. Capital constrains insurers, ability to sell earthquake insurance as well as wind insurance in hurricane zones. In the US, flood risk is insured by the federal government.

In commercial fire insurance it is possible to find single properties whose total exposed value is well in excess of any individual insurer\’s capital constraint. Such properties are generally shared among several insurers, or are insured by a single insurer who syndicates the risk into the reinsurance market.

Automobile accidents are definite losses.    1   

2. Insurance policies are provided for individual members of large classes.    2   

3. Insurance will not be purchased if the likelihood of an insured event is too high.    3   

4. The insurance of large properties is generally shared among several insurers.    4   

5. It is difficult to identify the time, place or cause of an occupational disease.    5   

6. Losses do not happen all at once so that the insurer will not go bankrupt.    6   

7. Different exposures may lead to different premium rates.    7