UTAH HEALTH AND LIFE INSURANCE EXAM
STUDY GUIDE 2026 QUESTIONS WITH
SOLUTIONS GRADED A+
◉ Commercial Insurers. Answer: Also knowns as private insurance
companies. Are in the business of selling insurance for a profit. (Usually
only selling 1 line of Insurance)
◉ Multi-Line Insurer. Answer: An insurance company selling more than
one line of insurance.
◉ Stock Companies. Answer: Organized and incorporated under state
laws , for the purpose of making a profit for its stockholders
(Shareholders). (Traditionally called Nonparticipating Insurers
◉ Nonparticipating Insurers. Answer: Policyholders do not participate in
reviewing dividends or electing board of directors. (Unless they are also
a stockholder of the company.
◉ Mutualization. Answer: Transformation of a stock insurer into a
mutual insurer.
◉ Demutualization. Answer: Transformation of a mutual insurer to a
stock insurer.
,◉ Dividends from a stock insurer are subject to ______ because they are
considered profit. Answer: Taxation
◉ Mutual Insurers are knowns as ____. Answer: Participating Insurers.
Because Policyholders PARTICIPATE in reviewing dividends and
electing board of directors. (These dividends are NOT subject to taxation
because dividends are considered to be a return of premium.)
◉ Mixed Insurer. Answer: When a company operates as both
Participating and Nonparticipating.
◉ Strong Assessment Mutual Companies are ____. Answer: Classified
by the way they charge premium.
◉ Pure Assessment Mutual Company. Answer: Operates based on loss-
sharing by group members. No premium is payable in advance. Instead,
each member is assessed an individual portion of losses that occur.
◉ Advance Premium Assessment Mutual. Answer: Charges a premium
at the beginning of the policy period. If the original premium exceeds
the operating expenses & losses the surplus is returned to the
policyholder as dividends. If premiums are no enough to meet losses,
additional assessments are levied against the members.
,◉ Fraternal Benefit Societies. Answer: Special types of mutual
companies, nonprofit religious, ethnic or charitable organizations that
provide insurance solely to their members. (Must be formed for reasons
other than obtaining insurance)
◉ Risk Retention Groups. Answer: Mutual companies formed by a
group of people in the same industry or profession. (pharmacists,
dentists, engineers)
◉ Service Providers. Answer: Offer benefits to subscribers in return for
the payment of a premium. (HMOs & PPOs)
◉ Reciprocal Insurers. Answer: Unincorporated groups of individual
members that provide insurance for other members through Indemnity
Contracts. (Each member acts as both insurer and insured & are
managed by Attorney in Fact)
◉ Reinsurers. Answer: Make arrangements with other insurance
companies to transfer a portion of their risk to the reinsurer. (Reinsurer is
the company assuming the risk for the Ceding company)
◉ Ceding Company. Answer: The company transferring risk to the
Reinsurer in a reinsurance agreement.
, ◉ Captive Insurer. Answer: An Insurer established & owned by the
parent company to insure the parent company's loss exposure.
◉ Home Service Insurer. Answer: (also knows as INDUSTRIAL
INSURANCE) Sold by home service or debit life insurance companies.
(Small face amounts; usually $1,000-$2,000 w/ premiums paid weekly)
◉ Government Insurance. Answer: Federal & State insurers providing
social insurance programs to protect against universal risks by
redistributing income to people who cannot afford the cost of incurring
such losses themselves.
◉ Social Security, Medicare, Medicaid, SGLI & VGLI, & Tri-Care are
all examples of ____. Answer: Government Insurance
◉ Social Security. Answer: (Old Age Survivor Disability, OASD)
Provides income benefits for the elderly, survivors of those who died
young, & those qualifying for federal disability
◉ Medicare. Answer: Health Insurance to CARE for the elderly
◉ Medicaid. Answer: Health Insurance to AID the financially needy
◉ SGLI & VGLI. Answer: (Serviceman's or Veteran's Group life
Insurance.) Life insurance for active and retired members of the military.
STUDY GUIDE 2026 QUESTIONS WITH
SOLUTIONS GRADED A+
◉ Commercial Insurers. Answer: Also knowns as private insurance
companies. Are in the business of selling insurance for a profit. (Usually
only selling 1 line of Insurance)
◉ Multi-Line Insurer. Answer: An insurance company selling more than
one line of insurance.
◉ Stock Companies. Answer: Organized and incorporated under state
laws , for the purpose of making a profit for its stockholders
(Shareholders). (Traditionally called Nonparticipating Insurers
◉ Nonparticipating Insurers. Answer: Policyholders do not participate in
reviewing dividends or electing board of directors. (Unless they are also
a stockholder of the company.
◉ Mutualization. Answer: Transformation of a stock insurer into a
mutual insurer.
◉ Demutualization. Answer: Transformation of a mutual insurer to a
stock insurer.
,◉ Dividends from a stock insurer are subject to ______ because they are
considered profit. Answer: Taxation
◉ Mutual Insurers are knowns as ____. Answer: Participating Insurers.
Because Policyholders PARTICIPATE in reviewing dividends and
electing board of directors. (These dividends are NOT subject to taxation
because dividends are considered to be a return of premium.)
◉ Mixed Insurer. Answer: When a company operates as both
Participating and Nonparticipating.
◉ Strong Assessment Mutual Companies are ____. Answer: Classified
by the way they charge premium.
◉ Pure Assessment Mutual Company. Answer: Operates based on loss-
sharing by group members. No premium is payable in advance. Instead,
each member is assessed an individual portion of losses that occur.
◉ Advance Premium Assessment Mutual. Answer: Charges a premium
at the beginning of the policy period. If the original premium exceeds
the operating expenses & losses the surplus is returned to the
policyholder as dividends. If premiums are no enough to meet losses,
additional assessments are levied against the members.
,◉ Fraternal Benefit Societies. Answer: Special types of mutual
companies, nonprofit religious, ethnic or charitable organizations that
provide insurance solely to their members. (Must be formed for reasons
other than obtaining insurance)
◉ Risk Retention Groups. Answer: Mutual companies formed by a
group of people in the same industry or profession. (pharmacists,
dentists, engineers)
◉ Service Providers. Answer: Offer benefits to subscribers in return for
the payment of a premium. (HMOs & PPOs)
◉ Reciprocal Insurers. Answer: Unincorporated groups of individual
members that provide insurance for other members through Indemnity
Contracts. (Each member acts as both insurer and insured & are
managed by Attorney in Fact)
◉ Reinsurers. Answer: Make arrangements with other insurance
companies to transfer a portion of their risk to the reinsurer. (Reinsurer is
the company assuming the risk for the Ceding company)
◉ Ceding Company. Answer: The company transferring risk to the
Reinsurer in a reinsurance agreement.
, ◉ Captive Insurer. Answer: An Insurer established & owned by the
parent company to insure the parent company's loss exposure.
◉ Home Service Insurer. Answer: (also knows as INDUSTRIAL
INSURANCE) Sold by home service or debit life insurance companies.
(Small face amounts; usually $1,000-$2,000 w/ premiums paid weekly)
◉ Government Insurance. Answer: Federal & State insurers providing
social insurance programs to protect against universal risks by
redistributing income to people who cannot afford the cost of incurring
such losses themselves.
◉ Social Security, Medicare, Medicaid, SGLI & VGLI, & Tri-Care are
all examples of ____. Answer: Government Insurance
◉ Social Security. Answer: (Old Age Survivor Disability, OASD)
Provides income benefits for the elderly, survivors of those who died
young, & those qualifying for federal disability
◉ Medicare. Answer: Health Insurance to CARE for the elderly
◉ Medicaid. Answer: Health Insurance to AID the financially needy
◉ SGLI & VGLI. Answer: (Serviceman's or Veteran's Group life
Insurance.) Life insurance for active and retired members of the military.
