Due to high accident rates in South Africa during the Festive season, the Road Accident Fund has issued a warning to government that the fund will be insolvent soon. Advise the Minister on the cost of insurance that can collapse the scheme.
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Due to high accident rates in South Africa during the Festive season, the Road Accident Fund has issued a warning to government that the fund will be insolvent soon. Advise the Minister on the cost of insurance that can collapse the scheme.
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- insurance is pure liability coverage over and above the coverage provided by other types of policies.State Farm State Farm Fire and Casualty Company 11350 Johns Creek Parkway Duluth, GA 30098-0001 AT2 Matt & Sarah Justice 123 GetTheW St. Atlanta, GA 30306 YEAR 2007 NAMED INSURED SYMBOLS A DO NOT PAY PREMIUMS SHOWN ON THIS PAGE. IF AN AMOUNT IS DUE, THEN A SEPARATE STATEMENT IS ENCLOSED. YOUR CAR C D G H JINA M R1 U MAKE TOYOTA MODEL CAMRY COVERAGE & LIMITS 11-2097-4 P Liability Coverage Bodily Injury Limits Each Person, Each Accident A $100,000 $300,000 Property Damage Limit Each Accident $100,000 Medical Payments Coverage Limit- Each Person $1.000 BODY STYLE 4DR Comprehensive Coverage - $200 Deductible Collision Coverage - $1,000 Deductible Emergency Road Service Coverage Car Rental and Travel Expenses Coverage Limit- Car Rental Expense Each Day. Each Loss 80% menntunar $1.000 Uninsured Motor Vehicle Coverage (Difference-In-Limits) Bodily Injury Limits Each Person, Each Accident $50,000 $100,000 Property Damage Limit ($250 Deductible) Each Accident $50.000 Total premium for JUL 21…Ex-ante risk (such as adverse selection) is greater than ex-post risk (such as moral hazard) True False
- An office suffers a fire. This being short incurs $10,000 in extra expenses during the first month after the fire. The insurer has an extra expense policy for $70,000.what Is the maximum amount that will be paid for the first month? $0 $5,000 $1,000 $10,000Adverse selection occurs because of A) spreading of risks. B) diminishing marginal utility. C) of imperfect information. D) moral hazardInsurance companies are regulated under federal insurance laws. True False
- David Herbert earns $2,475 a month as a security guard for Baldwin Enterprises. His group medical insurance costs $3,300 a year. The company pays 80% of the cost of group insurance. How much is deducted each month from his paycheck for medical insurance?James has two young children (Finn and lain) who are visiting the doctor for their annual well-child check-ups. The doctor's office charges $105 for well-child appointments. Health insurance pays 100% of the costs associated with well-child visits and does not require a copayment. James' health plan monthly premium is $1,400 and has a $1,000 deductible. How much will James be charged when the appointment is done?Health insurance scams have resulted in (a) higher medical insurance costs (b)low quality medical technology (c)the failure of many health insurance companies (d)an increase in federal income tax
- Adverse Selection refers to a situation in insurance markets in which individuals change their behavior after obtaining coverage, resulting in increased insurance costs True or FalseA bank that provides financing for the purchase of an auto may require the insured to name the bank on an auto policy to this situation, the bank would have A fiduciary responsibility to the insurer An insurable interest in the auto A surety interest in the auto Rights of subrogationEconomics Consider a supplier that manufactures a product at $2 per unit and sells them to retailers at $7 per unit. The retailer sells each product to the end consumer at $10. At this retail price, market demand is normally distributed, with a mean of 1,000 and a standard deviation of 300. The supplier agrees to buy back unsold products for $b even though any leftover product at the end of sale period are worthless. a) What is the retailer's order quantity under local optimization when b=0? b) What is the optimal order quantity under global optimization? Round up to the nearest integer. Derive the optimal value of b. c) With the optimized value of b in the buyback clause, how many discs should an independent retailer order? Round up your solution to the nearest integer. d) What is the expected overstocking given the optimized value of $b? What is the expected understocking given the optimized value of $b? What is retailers' expected profit? What is the manufacturer's expected profit?