LIFE INSURANCE TEST WA STATE (AND GENERAL INSURANCE REVIEW) LATEST
2026 UPDATED QUESTIONS AND VERIFIED 100% SOLUTIONS (2026/2027) |A+
GRADED |GUARANTEED PASS
stock, mutual, and reciprocal insurers
Stock is private company and is non-participating because the insured do not share in profits.
Mutual is participating(blue cross is one). Reciprocal is a group of people who agree to
indemnify eachother and claims are paid by accessing an account each member has set up.
policy dividends
payments members of a mutual insurance company get because it is a participating company in
that the insured people own the company.
subscriber
What each member of a reciprocal insurer is called
Fraternal benefit society
an established group that insures themeselves like a reciprocal insurer, although they get
income tax advantage and have an open contract so members can be asked for more money in
financial difficulty. Usually chartibly inclined.
Lloyds
not insurance company, meeting place for people to sell and buy insurance
reinsurers
insure insurers
facultative reinsurance
reinsures risk on an individual basis, so each of the insured can be accepted or declined by the
reinsurer
treaty reinsurance
reinsure risk in a pre-agreed amount, not on individual basis
Risk Retention Groups (RRG)
like fraternal benefits society or reciprocal insurance in that based on shared characteristics, but
not members of same club, but group of people with the same occupations to protect against
liability
1|Page
,direct writing companies
don't pay agents on commission so aren't technically agents
producer
includes agents and brokers
solicitor
works for an agent or broker
ownership of renewals
agreement with insurance company that agent has exclusive right to solicit renewals for clients
they brought in
Who can bind coverage?
binding putting the insurance contract into effect. Allowed in property and casualty, but not life
and disability or for brokers
independent agent
represents multiple insurance companies
Disclosure authorization
Applicant has to sign a document given to them by the agent saying what data will be collected
about them and from where
notice to applicant
form telling applicant that going to look for information about credit and medical history
penalty for collecting information from applicant and not having a legit reason for doing so
10k fine or up to year in prison
Penalty for obtaining consumer credit reports under false pretenses and thereby violating fair
credit reporting act
5k, one year in prison, or both
investigative consumer report
includes interviews with friends/family, not just data like normal consumer report
pretext interview, and legality
2|Page
,an interview(in an investigative consumer report) where the interviewer misrepresents who she
is to get more information(usually illegal except if crime suspected)
consumer vs client
consumer is anyone an insurance company collects info about, even if they are not a client
Grahm Leach Bliley Act two disclosure requirements
1. the customer must be informed of policies on privacy when they are signed up, and then
yearly
2. They must be allowed to opt out of information sharing
Insurance code, statutes, and rules and regulations
insurance code: body of state law making up rules of insurance, statues: state insurance laws,
rules and regulations: rules not voted on and intended to help uphold laws
commissioner of insurance also called (2)
superintendent or director
Annual statement
insurance companies have to submit to commissioner to prove financial health
Proper Market Conduct
What it sounds like. Applies to insurance companies.
guaranty associations
Like a reciprocal insurer but for insurance companies themselves. They pay dues and when one
company in financial hardship, all companies pay.
Buyers Guide
Required with insurance. Outlines basics of insurance.
Policy Summary
document that describes the policy (life)
Outline of coverage
document that describes the policy (disability)
temporary agent license term
3|Page
, 180 days if surviving spouse or personal rep.
controlled business
limitations on selling to friends and family
Misrepresentation is ___ and falls into larger category of __
lying, unfair trade practices
Twisting is ___ and falls into larger category of __
coercing or lying to get consumer to change insurance
unfair trade practices
False advertising is ___ and falls into larger category of __
unfair trade practice(and unfair competition)
churning is ___ and falls into larger category of __
Coercing or lying to get customer to keep current insurance
unfair trade practices
false financial statements is ___ and falls into larger category of __
unfair trade practices
defamation is ___ and falls into larger category of __
defaming other insurance companies
unfair trade practices
Discrimination is ___ and falls into larger category of __
giving different rates to people of different races who have the same risk level
unfair trade practices
rebating is ___ and falls into larger category of __
sharing commission with customer (not illegal in all states)
unfair trade practices
illegal premiums is ___ and falls into larger category of __
charging false premiums
unfair trade practices
4|Page
2026 UPDATED QUESTIONS AND VERIFIED 100% SOLUTIONS (2026/2027) |A+
GRADED |GUARANTEED PASS
stock, mutual, and reciprocal insurers
Stock is private company and is non-participating because the insured do not share in profits.
Mutual is participating(blue cross is one). Reciprocal is a group of people who agree to
indemnify eachother and claims are paid by accessing an account each member has set up.
policy dividends
payments members of a mutual insurance company get because it is a participating company in
that the insured people own the company.
subscriber
What each member of a reciprocal insurer is called
Fraternal benefit society
an established group that insures themeselves like a reciprocal insurer, although they get
income tax advantage and have an open contract so members can be asked for more money in
financial difficulty. Usually chartibly inclined.
Lloyds
not insurance company, meeting place for people to sell and buy insurance
reinsurers
insure insurers
facultative reinsurance
reinsures risk on an individual basis, so each of the insured can be accepted or declined by the
reinsurer
treaty reinsurance
reinsure risk in a pre-agreed amount, not on individual basis
Risk Retention Groups (RRG)
like fraternal benefits society or reciprocal insurance in that based on shared characteristics, but
not members of same club, but group of people with the same occupations to protect against
liability
1|Page
,direct writing companies
don't pay agents on commission so aren't technically agents
producer
includes agents and brokers
solicitor
works for an agent or broker
ownership of renewals
agreement with insurance company that agent has exclusive right to solicit renewals for clients
they brought in
Who can bind coverage?
binding putting the insurance contract into effect. Allowed in property and casualty, but not life
and disability or for brokers
independent agent
represents multiple insurance companies
Disclosure authorization
Applicant has to sign a document given to them by the agent saying what data will be collected
about them and from where
notice to applicant
form telling applicant that going to look for information about credit and medical history
penalty for collecting information from applicant and not having a legit reason for doing so
10k fine or up to year in prison
Penalty for obtaining consumer credit reports under false pretenses and thereby violating fair
credit reporting act
5k, one year in prison, or both
investigative consumer report
includes interviews with friends/family, not just data like normal consumer report
pretext interview, and legality
2|Page
,an interview(in an investigative consumer report) where the interviewer misrepresents who she
is to get more information(usually illegal except if crime suspected)
consumer vs client
consumer is anyone an insurance company collects info about, even if they are not a client
Grahm Leach Bliley Act two disclosure requirements
1. the customer must be informed of policies on privacy when they are signed up, and then
yearly
2. They must be allowed to opt out of information sharing
Insurance code, statutes, and rules and regulations
insurance code: body of state law making up rules of insurance, statues: state insurance laws,
rules and regulations: rules not voted on and intended to help uphold laws
commissioner of insurance also called (2)
superintendent or director
Annual statement
insurance companies have to submit to commissioner to prove financial health
Proper Market Conduct
What it sounds like. Applies to insurance companies.
guaranty associations
Like a reciprocal insurer but for insurance companies themselves. They pay dues and when one
company in financial hardship, all companies pay.
Buyers Guide
Required with insurance. Outlines basics of insurance.
Policy Summary
document that describes the policy (life)
Outline of coverage
document that describes the policy (disability)
temporary agent license term
3|Page
, 180 days if surviving spouse or personal rep.
controlled business
limitations on selling to friends and family
Misrepresentation is ___ and falls into larger category of __
lying, unfair trade practices
Twisting is ___ and falls into larger category of __
coercing or lying to get consumer to change insurance
unfair trade practices
False advertising is ___ and falls into larger category of __
unfair trade practice(and unfair competition)
churning is ___ and falls into larger category of __
Coercing or lying to get customer to keep current insurance
unfair trade practices
false financial statements is ___ and falls into larger category of __
unfair trade practices
defamation is ___ and falls into larger category of __
defaming other insurance companies
unfair trade practices
Discrimination is ___ and falls into larger category of __
giving different rates to people of different races who have the same risk level
unfair trade practices
rebating is ___ and falls into larger category of __
sharing commission with customer (not illegal in all states)
unfair trade practices
illegal premiums is ___ and falls into larger category of __
charging false premiums
unfair trade practices
4|Page
