CRIS CRIS Risk Financing & Insurance Programs

Question 1

What is an Owner-Controlled Insurance Program (OCIP) in construction?

Accepted Answer

A single insurance program procured by the owner covering all contractors on a project

Answer

A policy purchased by the general contractor only

Answer

A government-mandated insurance pool for public projects

Answer

An insurance program controlled by subcontractors

Question 2

What distinguishes a Contractor-Controlled Insurance Program (CCIP) from an OCIP?

Accepted Answer

The CCIP is procured and administered by the general contractor rather than the owner

Answer

The CCIP covers only the owner's property

Answer

The CCIP excludes workers' compensation coverage

Answer

The CCIP is mandatory on federally funded projects

Question 3

A construction firm retains the first $500,000 of each loss and purchases excess coverage above that level. This arrangement is best described as:

Accepted Answer

A large deductible program

Answer

A captive insurance program

Answer

A retrospective rating plan

Answer

An occurrence-based policy

Question 4

Which risk financing technique involves a group of construction firms forming their own insurance company to cover their collective risks?

Accepted Answer

Group captive insurance

Answer

Retrospective rating plan

Answer

Self-insured retention

Answer

Assigned risk pool

Question 5

Under a retrospective rating plan, the final premium is calculated based on:

Accepted Answer

The insured's actual loss experience during the policy period

Answer

Industry average loss ratios only

Answer

A fixed rate set at policy inception with no adjustments

Answer

The insurer's investment returns

Question 6

A Risk Retention Group (RRG) differs from a standard commercial insurer primarily because:

Accepted Answer

RRGs are owned by their members who share a common business classification

Answer

RRGs are prohibited from writing workers' compensation

Answer

RRGs must be domiciled in all states where they write business

Answer

RRGs can only insure residential construction projects