1. I Insurance is a scheme based on probability of events occurring and the pooling of risks to restore its contributors to their prior position if the event occurs.

2. Insurance – involves the probability of a risk occurring eg. getting sick Assurance – is based on a risk that is bound to occur eg. death

3.  Indemnity  Insurable interest  Utmost good faith  Proximate cause  Subrogation  Contribution  Benefits

4. LLife assurance & endowment MMarine insurance MMotor Insurance HHealth Insurance BBusiness Insurance ◦F◦Fire ◦B◦Burglary ◦E◦Employer’s Liability ◦P◦Plate Glass ◦B◦Bad Debts ◦G◦Goods in transit

5.  (a)List TWO responsibilities of a government to its citizens.  (b)Government can assist business by providing them with subsidies. Governments can also assist consumers through price control measures. ◦ Define the terms ‘subsidy’ and ‘price control’.  (c )Dave recently opened a small appliance store. He sells radios, television sets, stoves and refrigerators. Dave was advised that he should insure his business. ◦ (i)List THREE principles upon which insurance is based. ◦ (ii)State how the principles identified in (c)(i) above will apply to Dave’s appliance store if he insures the business.  (d)Dave is thinking of expanding his business. He approached his bank for a loan. Dave was advised that he can use his house as collateral for the loan but ONLY if the house is insured. ◦ (i)Define the term ‘collateral’. ◦ (ii)Explain why the bank requires that Dave’s house MUST be insured if he intends to use it as collateral for loan.