Risk Management and Insurance
5051. Managing Risk (1.5
Prerequisite: Business foundation courses.
Risk Management requires the firm to identify opportunities for gain and exposures to unexpected loss. The firm must then assess the potential consequences, and plan to finance the consequences of the adverse event if it happens. This course is designed to introduce the risk management process in the context of general corporate management. Each step in the process will be reviewed in detail, including setting the risk management context, identification of risk, measurement and analysis of potential impact, and appropriate treatment techniques. Risk financing options will be discussed in the context of global insurance and alternative capital markets. While the risk management process encompasses all types of risks, we will focus our identification discussion on the class of risks known as pure risk events; those that pose the threat of a loss if they happen, but no possibility of a gain.
Note: Implementation planned for Fall 2005-Pending approval
5101. Life and Health
Insurance and Employee Benefits (3
Analysis of the major areas in non-pension employee benefits. Reviews overall considerations in employee benefit design including federal and state regulation, group insurance and the group insurance technique, sources of healthcare benefits, HMOs, PPOs, managed care systems and disability income benefits. Considers flexible benefits plans and funding considerations. Income tax implications and healthcare cost containment issues are also examined. Group and individual life insurance theory and practice and their use in employee benefits plans.
5102. Retirement Plans (3
Composed of two sections: 1) Reviews basic features and defined contribution approaches of retirement income. Examines sponsor objectives served by the creation of qualified retirement plans, tax and non-tax qualification requirements, and individual account retirement plans. Subjects: profit sharing plans, Section 401(k) and 403(b), employee stock ownership, cash balance, simplified employee pension, and executive retirement arrangements. 2) explores defined benefit plans and plan administration, fundamentals of pension plans with emphasis on the defined benefit approach to providing retirement income. Subjects: plan design, actuarial aspects (costs and funding), investment of plan assets, and plan termination insurance. Provides a basic foundation of retirement income.
5103. Health Risks (3
Focuses on: 1) special characteristics of risk managementin healthcare institutions/agencies; 2) health insurance issues (as benefit for patients and revenue source for providers); 3) health economics (macro) as related to above.
5104. Property and
Liability Insurance (3 s.h.)
Provides a graduate level introduction to the property-liability insurance industry. Attention given to structure of marketplace, regulatory framework, and relationship between the property-liability insurance industry and the firms which it protects. Discusses issues effecting the industry from an economic, legal, and public policy. Applications include product liability, environmental impairment liability, and worker's compensation issues.
5105. Advanced Applications
in Risk Management (3 s.h.)
Divided into five parts. 1) reviews statistical distributions common in insurance e.g., negative binomial, pareto, and log normal distributions and evaluates their ability to model long-tail losses. 2) considers inferences from insurance data, e.g., the fitting of theoretical distributions using the method of moments and maximum and credibility theory. 3) considers loss reserve runoffs and forecasting future. 4) applies portfolio theory (including correlation analysis) to show the relationship between firm value (net worth) and insurance purchases. 5) reviews discounted cash flow techniques to determine premiums and illustrate financial aspects of captive formation.
5182. Independent Study (1-6
Special study in a particular aspect of insurance and risk under the direct supervision of appropriate graduate faculty member. No more than six hours of independent study may be counted toward degree requirements.