MI LIFE PRODUCER UPDATED PRACTICE
SOLUTION QUESTIONS AND VERIFIED
ANSWERS
●● What do career agencies do?
Answer: They are contracted to represent an insurer in a specific area.
●● insurance
Answer: is the transfer of risk from one party to another through a legal
contract or the transfer of risk through the pooling (accumulation) of
funds.
●● Benefits of Insurance
Answer: most contracts offered to individuals and organizations in
society, including health, property, and casualty policies, are contracts of
indemnity whose primary purpose is to pay off financial losses and
reimburse the insured.
●● multi-line insurers.
Answer: Companies that sell more than one line of insurance are known
as
●● Stockholders
,Answer: May or may not be policyholders.
●● life insurance
Answer: creates an instant estate, regardless of when death occurs.
●● Private vs. Government Insurance
Answer: There are two types of insurance companies:
●● Multi-line insurer
Answer: Companies that sell more than one line of insurance are known
as
●● Stock Insurance Company
Answer: This company typically issues nonparticipating insurance
policies.
●● nonparticipating policy
Answer: policies do not allow policyholders to participate in board
elections or dividends and instead aim to increase profit for the
shareholders.
●● Mutual Companies
,Answer: Referred to as participating companies because the
policyowners participate in dividends.
●● participating
Answer: policies allow policyholders to participate in the company by
electing the board of directors and receiving dividends from the divisible
surplus.
●● Divisible Surplus
Answer: The amount of earnings paid to policyowners as dividends after
the insurance company sets aside funds required to cover reserves,
operating expenses, and general business purposes.
●● Pure assessment mutual company
Answer: operates on the basis of loss-sharing by group members.
●● Risk Retention Group
Answer: Risk purchasing group only has to be licensed in one state but
may insure members in any State.
●● Reciprocal Insurers
Answer: organized on the basis of ownership by their policyholders.
●● Fraternal Benefit Society
, Answer: the organization must be nonprofit, have a lodge system that
includes ritualistic work, and maintain a representative form of
government with elected officers.
●● Lloyd's of London
Answer: not an insurer but rather a syndicate of individuals and
companies that individually underwrite insurance.
●● ceding company
Answer: the company transferring the risk is called
●● Reinsurer
Answer: The company assuming the risk is the
●● Primary Insurer
Answer: In a reinsurance agreement, the insurance company that
transfers its loss exposure to another insurer is called the
●● captive insurer
Answer: An insurer established and owned by a parent firm for the
purpose of insuring the parent firm's loss exposure is known as
●● Industrial Insurance
SOLUTION QUESTIONS AND VERIFIED
ANSWERS
●● What do career agencies do?
Answer: They are contracted to represent an insurer in a specific area.
●● insurance
Answer: is the transfer of risk from one party to another through a legal
contract or the transfer of risk through the pooling (accumulation) of
funds.
●● Benefits of Insurance
Answer: most contracts offered to individuals and organizations in
society, including health, property, and casualty policies, are contracts of
indemnity whose primary purpose is to pay off financial losses and
reimburse the insured.
●● multi-line insurers.
Answer: Companies that sell more than one line of insurance are known
as
●● Stockholders
,Answer: May or may not be policyholders.
●● life insurance
Answer: creates an instant estate, regardless of when death occurs.
●● Private vs. Government Insurance
Answer: There are two types of insurance companies:
●● Multi-line insurer
Answer: Companies that sell more than one line of insurance are known
as
●● Stock Insurance Company
Answer: This company typically issues nonparticipating insurance
policies.
●● nonparticipating policy
Answer: policies do not allow policyholders to participate in board
elections or dividends and instead aim to increase profit for the
shareholders.
●● Mutual Companies
,Answer: Referred to as participating companies because the
policyowners participate in dividends.
●● participating
Answer: policies allow policyholders to participate in the company by
electing the board of directors and receiving dividends from the divisible
surplus.
●● Divisible Surplus
Answer: The amount of earnings paid to policyowners as dividends after
the insurance company sets aside funds required to cover reserves,
operating expenses, and general business purposes.
●● Pure assessment mutual company
Answer: operates on the basis of loss-sharing by group members.
●● Risk Retention Group
Answer: Risk purchasing group only has to be licensed in one state but
may insure members in any State.
●● Reciprocal Insurers
Answer: organized on the basis of ownership by their policyholders.
●● Fraternal Benefit Society
, Answer: the organization must be nonprofit, have a lodge system that
includes ritualistic work, and maintain a representative form of
government with elected officers.
●● Lloyd's of London
Answer: not an insurer but rather a syndicate of individuals and
companies that individually underwrite insurance.
●● ceding company
Answer: the company transferring the risk is called
●● Reinsurer
Answer: The company assuming the risk is the
●● Primary Insurer
Answer: In a reinsurance agreement, the insurance company that
transfers its loss exposure to another insurer is called the
●● captive insurer
Answer: An insurer established and owned by a parent firm for the
purpose of insuring the parent firm's loss exposure is known as
●● Industrial Insurance
