Introduction to Risk Management
RM 357E  

 

Professor: Patricia M. Arnold, CPCU, ALCM
 
Office: GSB 5.126A
calendar
Phone: 475-6728
syllabus
Office Hours: 2 - 4 PM Friday, or by app't.
e-mail address: mailto:pat.arnold@mccombs.utexas.edu
Class location: UTC 4.102, 11AM -12 (# 04005/37085) or 12 - 1 PM (#04010/37090), M-W-F
or pma55@austin.rr.com
Calendar - Spring 2009
Textbook: Rejda, George E., Principles of Risk Management and Insurance (10th Ed.), Addison Wesley publishers, Boston, Mass., 2007 (required)
  • This course will examine the way in which business and society make an assessment of, control and transfer risk.
  • It is designed for the student with no previous knowledge of risk management.
Reading and Homework Assignments
  • Reading and homework assignments are shown below. Reading assignments will be drawn primarily from the textbook, supplemented by articles and website readings from other publications.
  • Homework will be assigned from time to time, and generally will be due the following class session.
  • The "Course Documents" folder on our Blackboard website contains extensive additional resources.
Evaluation & grading - see syllabus

DATE

TOPICS and chapter outlines

Homework: READING ASSIGNMENTS, REFERENCE AND LEARNING MATERIALS

January 21 Syllabus Overview Slideshow: Intro slideshow; Rejda public website; Safety; review key concepts and Blackboard resources
Part One: Introduction to Risk Management
January 23 Risk in Our Society
  • Perils, hazards
  • Direct and indirect loss
  • Pre and post-loss risk management
    •
Reading: Chapter 1
January 26 & 28 Insurance and Risk
  • Insurer side: public policy and affordability/availability, indemnification, insurance product overview
  • Undercurrents in pricing, markets in risk management
  • Retaining risk
 Reading: Chapter 2  

Review Blackboard "Assignments" and "Course Documents"

January 30 & Feb 2 Introduction to Risk Mgmt
  • Client Side: Components of the cost of risk
  • Use of contracts, variety of insurance products
  • Evaluating the costs of a loss and who impacted
  • PML and Retaining risk - client side, insurer side

 

 Reading: Chapter 3
February 4 & 6 Advanced Topics in Risk Mgmt
  • Valuing losses to property, legal risk
  • Strategies for client v. insurer
  • Management of physical risk, contract risk
  • Cost of risk, resources - drivers, strategic decision making, ERM
Reading: Chapter 4
Part Two: The Private Insurance Industry
February 9 Types of Insurers & Marketing Systems
  • Distribution systems, supply/demand dynamics
  • Roles in production, underwriting, claims
 Reading: Chapters 5 
February 11 Quiz 1 and homework 1 assigned Resources for Homework 1: see Blackboard
February 13 & 16 Insurance Company Operations
  • Documents - binder, loss report, proof of loss, claim draft
  • Reinsurance - use, cost, alternatives
Homework 1 due in class Feb. 16		 Reading: Chapter 6
February 18 Financial Operations of Insurers (pricing and ratemaking)
  • Convergence of financial services – insurance and banking, securities
  • Rating and classification systems
  • FACTS book: stats, lines of coverage, where premium dollar goes, who writes what
  • NAIC and TDI, A M Best, OPIC
Reading: Chapter 7
February 20 & 23 Government Regulation of Insurance
  • History of regulation - federal, state
    • - of the “business of insurance”
  • Advisory organizations
 Reading: Chapter 8 
February 23 Reinsurance

  • Current dynamics - courts, client exposures, regulatory, political
  • Reinsurance and Excess & Surplus Lines  (E & S) markets
  
February 25Exam PrepChapters 1 thru 8
February 27 Exam #1 chapters 1 - 8
Part Three: Legal Principles in Risk & Insurance
March 2 Fundamental Legal Principles
  • Unfair claims practices, market conduct and compliance
    • (Texas Ins. Code)
  • Analytical approach
  • Insurable interest & valuation, subrogation
  • First party v. third party analysis
Reading: Chapter 9
March 4

Analysis of Insurance Contracts

  • C.O.P.E. and building code / location / jurisdiction
  • Waiver & estoppel
  • Other Insurance
 Reading: Chapter 10
March 6 & 9 The Liability Risk
  • Personal “legal liability” based on “tort”/negligence allegations, also business legal liability based on same – NOT breach of contract, breach of warranty, failure to perform/complete/fiduciary failure.
  • Dispute resolution
  • Appraisal clause
 Reading: Chapter 19

Reading: Alternative Dispute Resolution (RIMS mag. 10/06)

  • Diff methods/remedies to resolve disputes
  • Tort versus contract - remedies?
March 11 Quiz 2 and homework 2 assigned Resources for Homework 2:
Part Five: Personal Property and Liability Risks
March 23

 

 Homeowners Insurance, Sec. I
  • Homeowners Form 3
  • Valuation in risk mgmt process
  • Endorsements: RCOC, increased cost
  • Schedule vs. blanket
Reading: Chapter 20
March 25

Homeowners Insurance, Sec. II

  • Negligence
  • Limited exclusions
  • Personal vs. Business liability
  • Endorsement for Personal Injury
Hand in homework 2 		Reading: Chapter 21
March 27 Automobile Insurance
  • Exclusions, extensions, non-ownership (and DOC endorsement), other insurance, limits
  • Underwriting and rating criteria
  • Temporary substitute,, newly acquired
  • Def'n of insured, vicarious liab., permissive user
 Reading: Chapter 22
March 30 Automobile Insurance and Society
  • Valuation and autos
  • Primary/excess-umbrella
  • Transportation/delivery & mobile equipment
 Reading: Chapter 23 (except sections on no-fault)

 

April 1 & 3 Other Property and Liability Insurance Coverages
  • Dwelling Policy Special Form 3
  • Inland Marine (floaters)
  • Umbrellas
  • Flood
  • FAIR Plan, MAP, JUA, underserved markets
 Reading: Chapter 24 (not sections on life/health, title, mobile home, boat, aviation)
April 6Exam PrepChapters 9-10, 19-24, practice crossword
April 8 Exam #2 - Part Three & Five Chapters 9, 10, 19-24
Part Six: Commercial Property and Liability Risks
April 13 & 15 Commercial Property Insurance
  • Coinsurance
  • Limitations, extensions, conditions, valuation, agreed value, seasonal fluctuations
  • Tenant's improvements & betterments
  • Warranty and vacancy clause
  • Lease of equipment & premises, contractual and statutory obligations, responsibilities
  • Interdependencies  
Reading: Chapter 25
April 17 Commercial Liability Insurance
  • Certificate of insurance
  • Premises/Operations and Products/Completed Operations
  • workshop lease agreements
 Reading: Chapter 26
April 20 Commercial Liability Insurance (cont'd)
  • Excess/umbrella
  • Contractual, ENOL / Hired auto
  • Mobile Equipment
  • Exclusions, def'ns, conditions
  • Environmental impairment, liquor, auto
  • PD to own work/product (recall, impaired property/failure to perform, faulty workmanship)
 Chapter 26 continued
April 22 Quiz 3 and homework 3 assigned Resources for Homework 3: see Course Documents on Blackboard
April 24 Social Insurance
  • Exclusive remedy
  • Structure of coverage
  • Employment dynamics

 

 Reading: Chapter 18 (social insurance background and workers' compensation sections only)
April 27 Management and Professional Liability topics
  • Employment dynamics
  • Management liabilities, employment practices, EBL (fiduciary liab.), D & O
Hand in homework 3 		 
April 29 Medical Malpractice, other liability issues (cont'd) Professional liability
May 1 Crime Insurance & Surety Bonds Reading: Chapter 27
May 4 Crime Insurance & Surety Bonds (cont'd)
  • Insurance versus bonding
  • Crime insurance in CL
 Chapter 27 continued
May 6 Prep - exam 3  
May 8 Exam #3 - Part Six Chapter 25-27, 18 (portion)
Updated 4/21/2009