Passage Two
　　Insurance is almost as important to business as banking. It works quite simply by spreading over a large number of people, the costs or the losses which otherwise would fall on the few who actually suffer them.
　　Fire, for instance, normally damages only a few businesses each year but almost all companies buy insurance to protect themselves against it. What happens is that most companies pay regular small amounts of money, called the premium to insurance groups and so a large fund of money builds up. Then the few who have suffered fires claim the cost of the damages. After investigation, the claims are paid out by the insurance companies.
　　For the operation to work, insurance companies have to calculate what is the chance or probability of certain events happening, and what the cost of making accidents good will be, and how many people will pay, what rates, to have protection. Premiums are fixed in proportion to the risk involved.
　　There are four principles backing up every insurance contract. The first, known as indemnity, is that the insured should get back the same value as was lost. If you insure your watch against the risk of its being stolen, then the insurance company will only pay out the cost of a similar, second. hired watch unless you make a special agreement with them.
　　The second principle is that of agreeing that the insurer has to own, or have the insurable interest in, the property covered, both at the time of affecting the insurance and at the time of loss. This is usual for policies covering fire；but the insurance on ships and their cargoes can be transferred to new owners if required.
　　Thirdly it is necessary for the agreement to be concluded in good faith. Generally the company providing insurance cover charges a premium based on what it is told. If a company fails to mention that a warehouse sometimes contains explosives the underwriter may declare the contract not valid and refuse to pay a claim if the warehouse blows up.
　　Finally, insurers distinguish between remote and immediate causes of an event. If there is an earthquake and a house is damaged, catches fire and is flooded by firemen when putting out the flames, the compensation due will depend on the exact words used in the detailed insurance contract. Usually companies do not provide cover against earthquake damage, so the house owner may not get any compensation for the effects of the fire or water, as these were a direct result ofthe earthquake.
　　66. What are the four principles backing up every insurance contract?
　　A. Indenmity, the insurable interest, premium and good faith.
　　B. Indemnity, the cost of the damage, the exact words in the contract and the insurableinterest.
　　C.Indemnity, the insurable interest, good faith and remote and immediate causes of anevent.
　　D. Indemnity, the insurable interest, the cost of the damages and good faith.
　　67. I n Para. 2, the term "premium" means ___________
　　A. the cost of the damage
　　B. a sum of money paid regularly to an insurance company
　　C. proportion of the risk involved
　　D. a large fund of money
　　68. Which of the following is NOT true according to the passage?
　　A. Premiums are usually decided in proportion to the risk involved.
　　B. Insurance companies often do not provide cover against earthquake damages.
　　C. Insurance on ships and their cargoes can be transferred to new owners if required.
　　D. Those who buy insurance can claim the cost of damages if they suffer from firescaused by an earthquake.
　　69. Which of the following is implied, but not directly stated in the passage?
　　A. A regular small sum of money will cover your losses.
　　B. Insurance companies usually do not provide cover against earthquake losses.
　　C. An insurance company can build up a large sum of money from those who pay insurance charge.
　　D. You cannot cover the losses you suffer if the results of the investigation by insurance company turn out not to be in your favor.
　　70. The purpose of this passage is ___________ .
　　A. to get you familiar with insurance business
　　B. to advise you to insure your properties
　　C. to tell you how to get compensation from an insurance company
　　D. to teach you how to sign an insurance contract

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