NAIC 390 COMPREHENSIVE STUDY GUIDE
2026 FULL QUESTIONS AND SOLUTIONS
GRADED A+
◍ Preconditions.
Answer: Ensures regulators have appropriate regulatory authority over
insurers; operate independently of political interference; maintain an
adequate staff of sufficiently trained personnel; and treat confidential
information appropriately.
◍ Permitted Accounting Principle.
Answer: Specifically requested by an insurer and allowed by a state
regulator on a case-by-case basis. Also known as Permitted Account
Practices - Practices that state of domicile has granted to a specific company
that differ from NAIC statutory accounting any differences between a states
SAP whether prescribed or permitted are to be disclosed.
◍ which of the following is true?.
Answer: life insurance protects against the risk of premature death and
annuities can reduce risks associated with outliving income
◍ United States v. South-Eastern Underwriters Association.
Answer: In 1944 this overturned Paul v. Virginia. Insurance was interstate
commerce and subject to federal regulation. Focused on anti-trust laws
◍ What is a difference between a formula-based reserving system and a
prinicpal based reserving system for life insurance products?.
Answer: principle-based reserving is a prescribed method of determing the
reserves based on assumptions for mortality and interest rates
◍ The Federal Employee Retirement Income Security Act federal standards
for _____..
, Answer: employee welfare benefit plans, including health
◍ McCarran-Ferguson Act.
Answer: enacted in 1945 and gave states the authority to regulate the
business of insurance without interference from federal regulation unless
federal law specifies otherwise.
◍ Statements of Statutory Accounting Principles (SSAPs).
Answer: Disclosures that are required to assist readers of the financial
statements in their understanding. This also increases the transparency of the
information. These fundamental concepts are found in the statements in the
preamble:o Conservatismo Consistencyo RecognitionThe above concepts
assure the guidance is consistent with the underlying objectives of statutory
accounting.
◍ Regulatory Framework.
Answer: Includes: Core principles, model laws & regulations and
accreditation.
◍ Which of the following insurance coverages can be purchased from a federal
insurance program?.
Answer: Flood Insurance
◍ The Health Insurance Portability and Accountability Act of 1945
requirements in both group and individual markets related to?.
Answer: guaranteed renewability
◍ What is the purpose of the product filing requirements locator?.
Answer: provides a single point concerning detailed information about filing
requirements across different states and jurisdiction
◍ When do consumers generally read their insurance policies?.
Answer: when they have a claim
◍ Which type of health insurance is triggered by the inability to participate in
activiites of daily living?.
Answer: Long-Term Care
, ◍ Which of the following would eventually cause an insurance company to
have insolvency?.
Answer: Inadequate Reserves
◍ Which of the following is one of the three main distribution insurance
comapnies to distribute insurance products?.
Answer: captive brokers
◍ investigating and settling a claim would be considered what type of expense
for an insurer?.
Answer: Claims/Loss Adjustment Expense
◍ Independent agents represent and sell policies for?.
Answer: many insurance companies at one time
◍ NAIC Members.
Answer: Group of 56 and are the elected or appointed state government
officials who along with their departments and staff regulate the conduct of
insurance companies and agents in their respective state or territory.
◍ NAIC Accreditation program.
Answer: Started in 1989 to establish and maintain standards to promote
sound insurance company financial solvency regulation.
◍ What is a key difference between participating and non-participating life
products?.
Answer: Participating Life Products allowed policyholders to potential
receive dividends, unlike non-participating life products which dont.
◍ What is the main characteristics of a no- fault insurance system to a system
based on tort liability?.
Answer: Policyholders receive compensation from their own insurance
company regardless of who caused the accident (Quicker Access to Medical
and Financial Benefits)
◍ Core Principle 5.
Answer: Control of Broad -based Risk Transactions Activities· Control of
2026 FULL QUESTIONS AND SOLUTIONS
GRADED A+
◍ Preconditions.
Answer: Ensures regulators have appropriate regulatory authority over
insurers; operate independently of political interference; maintain an
adequate staff of sufficiently trained personnel; and treat confidential
information appropriately.
◍ Permitted Accounting Principle.
Answer: Specifically requested by an insurer and allowed by a state
regulator on a case-by-case basis. Also known as Permitted Account
Practices - Practices that state of domicile has granted to a specific company
that differ from NAIC statutory accounting any differences between a states
SAP whether prescribed or permitted are to be disclosed.
◍ which of the following is true?.
Answer: life insurance protects against the risk of premature death and
annuities can reduce risks associated with outliving income
◍ United States v. South-Eastern Underwriters Association.
Answer: In 1944 this overturned Paul v. Virginia. Insurance was interstate
commerce and subject to federal regulation. Focused on anti-trust laws
◍ What is a difference between a formula-based reserving system and a
prinicpal based reserving system for life insurance products?.
Answer: principle-based reserving is a prescribed method of determing the
reserves based on assumptions for mortality and interest rates
◍ The Federal Employee Retirement Income Security Act federal standards
for _____..
, Answer: employee welfare benefit plans, including health
◍ McCarran-Ferguson Act.
Answer: enacted in 1945 and gave states the authority to regulate the
business of insurance without interference from federal regulation unless
federal law specifies otherwise.
◍ Statements of Statutory Accounting Principles (SSAPs).
Answer: Disclosures that are required to assist readers of the financial
statements in their understanding. This also increases the transparency of the
information. These fundamental concepts are found in the statements in the
preamble:o Conservatismo Consistencyo RecognitionThe above concepts
assure the guidance is consistent with the underlying objectives of statutory
accounting.
◍ Regulatory Framework.
Answer: Includes: Core principles, model laws & regulations and
accreditation.
◍ Which of the following insurance coverages can be purchased from a federal
insurance program?.
Answer: Flood Insurance
◍ The Health Insurance Portability and Accountability Act of 1945
requirements in both group and individual markets related to?.
Answer: guaranteed renewability
◍ What is the purpose of the product filing requirements locator?.
Answer: provides a single point concerning detailed information about filing
requirements across different states and jurisdiction
◍ When do consumers generally read their insurance policies?.
Answer: when they have a claim
◍ Which type of health insurance is triggered by the inability to participate in
activiites of daily living?.
Answer: Long-Term Care
, ◍ Which of the following would eventually cause an insurance company to
have insolvency?.
Answer: Inadequate Reserves
◍ Which of the following is one of the three main distribution insurance
comapnies to distribute insurance products?.
Answer: captive brokers
◍ investigating and settling a claim would be considered what type of expense
for an insurer?.
Answer: Claims/Loss Adjustment Expense
◍ Independent agents represent and sell policies for?.
Answer: many insurance companies at one time
◍ NAIC Members.
Answer: Group of 56 and are the elected or appointed state government
officials who along with their departments and staff regulate the conduct of
insurance companies and agents in their respective state or territory.
◍ NAIC Accreditation program.
Answer: Started in 1989 to establish and maintain standards to promote
sound insurance company financial solvency regulation.
◍ What is a key difference between participating and non-participating life
products?.
Answer: Participating Life Products allowed policyholders to potential
receive dividends, unlike non-participating life products which dont.
◍ What is the main characteristics of a no- fault insurance system to a system
based on tort liability?.
Answer: Policyholders receive compensation from their own insurance
company regardless of who caused the accident (Quicker Access to Medical
and Financial Benefits)
◍ Core Principle 5.
Answer: Control of Broad -based Risk Transactions Activities· Control of
