LOMA 291 Module 1 Frequently Tested Actual Questions and
Answers
Question 1.
Stakeholders (consituents)
Correct Answer: A party that has an interest in how a company conducts its
business. Also known as a constituent.
Question 2.
Dividend
Correct Answer: Compensation that a company may pay to owners upon a vote
by the company's board of directors.
Question 3.
Stockholder
Correct Answer: We stockholders expect the company to grow steadily. We
expect to earn a reasonable return, sometimes in the form of dividends. Do you
know what a dividend is? Sometimes the board of directors votes to make a
payment to the stockholders. The payment is called a dividend.
Question 4.
Policy owner
Correct Answer: Here are some factors I considered when I chose to buy a policy
from Forthright:
Good company reputation Policy features Reasonable charges Financial strength
Customer service Forthright provides my personal safety net because of their
good reputation and policy features. They charge me for reasonable expenses
and they have the financial strength to be around for the long haul to pay the
policy benefits they promise me and my family. So far, I'm pleased with my
policy and the company's customer service.
Question 5.
financial professional
Correct Answer: In insurance sales, any individual—including agents, bank-af-
filiated sales personnel, and brokers—who is licensed to sell insurance products,
solicit sales, or negotiate insurance contracts. Why do I place business with
Forthright? Here are some reasons: Forthright's products meet my clients'
needs. Forthright offers competitive compensation on the business I sell. Its
staff is top notch and provides fast and accurate support. The company has
good ratings, so I trust its ability to meet policy obligations in the future.
,Question 6.
key stakeholders
Correct Answer: - stockholder
- policyowner
- financial professional
- employee
- reinsurer
- consultants/vendors
- borrowers
- regulators
- rating agencies
- associations
- trade associations
Question 7.
employee values
Correct Answer: I value the long-term employment. I enjoy my coworkers. I'm
proud to work for a reputable company. I appreciate the salary and benefits.
Question 8.
reinsurance
Correct Answer: Insurance that one insurance company, known as the direct
writer, purchases from another insurance company, known as the rein- surer, to
transfer all or part of the risk on insurance policies that the direct writer issued.
Question 9.
consultants/vendors example
Correct Answer: I'm a public accountant. I provide external audit services to
Forthright. Many vendors provide goods and services to Forthright.
Question 10.
Borrowers example
Correct Answer: I'm a real estate developer. To fund construction projects, I
borrow from Forthright Financial. Forthright lends money as one of its
investments. They expect to earn a return, so they keep a close eye on me.
,Question 11.
regulators example
Correct Answer: I conduct in-person examinations of insurance companies that
do business in my state. I make sure they comply with regulations and maintain
fair business practices.
Question 12.
rating agencies example
Correct Answer: I assign a grade to Forthright Financial and other companies.
The grade, called a rating, indicates my company's opinion of Forthright's
overall health and stability.
Question 13.
associations example
Correct Answer: As a Forthright actuary, I belong to several organizations that
set professional standards. Forthright employs many professionals—actuaries,
accountants, auditors, attorneys, underwriters, medical directors, and others.
All of these groups have professional associations.
Question 14.
Select each group which counts among an insurance company's stakeholders. a. Financial
professionals b. Reinsurance companies c. Employees d. Trade associations e. Owners of
company stock f. Policyowners
Correct Answer: All of them -
Question 15.
In each of the following questions, select the person who would most likely make each
statement about his or her interests as a stakeholder. "My company provides backup to
Forthright on paying its claims." a. Policyowner b. Stockholder c. Employee d. Reinsurer e.
Financial professional
Correct Answer: D.
Question 16.
In each of the following questions, select the person who would most likely make each
statement about his or her interests as a stakeholder. "I need prompt handling of my
transactions when I make a withdrawal." a. Policyowner b. Stockholder c. Employee d.
Reinsurer e. Financial professional
Correct Answer: A.
, Question 17.
In each of the following questions, select the person who would most likely make each
statement about his or her interests as a stakeholder. "I value having a good job with
reliable income and benefits." a. Policyowner b. Stockholder c. Employee d. Reinsurer e.
Financial professional
Correct Answer: C.
Question 18.
In each of the following questions, select the person who would most likely make each
statement about his or her interests as a stakeholder. "I need Forthright to offer products
that meet my clients' needs so that I can earn an income." a. Policyowner b. Stockholder c.
Employee d. Reinsurer e. Financial professional
Correct Answer: E.
Question 19.
In each of the following questions, select the person who would most likely make each
statement about his or her interests as a stakeholder. "I need to earn a return on my stock
investment in Forthright." a. Policyowner b. Stockholder c. Employee d. Reinsurer e.
Financial professional
Correct Answer: B.
Question 20.
different stakeholder goals
Correct Answer: Declare a stockholder dividend Declare a policyowner dividend
Purchase another company Expand into a new product line company needs to
Balance the interests of the different stakeholder groups and Prioritize each
group's interests, if necessary
Question 21.
Board of directors
Correct Answer: A corporation's governing body, elected by the owners, that
makes broad policy decisions to ensure that stakeholder interests are
safeguarded appropriately.
Question 22.
governance
Correct Answer: A corporate board's accountability, responsibility, and authority
to direct an organization to properly fulfill its missions on behalf of legitimate
stakeholders.
Answers
Question 1.
Stakeholders (consituents)
Correct Answer: A party that has an interest in how a company conducts its
business. Also known as a constituent.
Question 2.
Dividend
Correct Answer: Compensation that a company may pay to owners upon a vote
by the company's board of directors.
Question 3.
Stockholder
Correct Answer: We stockholders expect the company to grow steadily. We
expect to earn a reasonable return, sometimes in the form of dividends. Do you
know what a dividend is? Sometimes the board of directors votes to make a
payment to the stockholders. The payment is called a dividend.
Question 4.
Policy owner
Correct Answer: Here are some factors I considered when I chose to buy a policy
from Forthright:
Good company reputation Policy features Reasonable charges Financial strength
Customer service Forthright provides my personal safety net because of their
good reputation and policy features. They charge me for reasonable expenses
and they have the financial strength to be around for the long haul to pay the
policy benefits they promise me and my family. So far, I'm pleased with my
policy and the company's customer service.
Question 5.
financial professional
Correct Answer: In insurance sales, any individual—including agents, bank-af-
filiated sales personnel, and brokers—who is licensed to sell insurance products,
solicit sales, or negotiate insurance contracts. Why do I place business with
Forthright? Here are some reasons: Forthright's products meet my clients'
needs. Forthright offers competitive compensation on the business I sell. Its
staff is top notch and provides fast and accurate support. The company has
good ratings, so I trust its ability to meet policy obligations in the future.
,Question 6.
key stakeholders
Correct Answer: - stockholder
- policyowner
- financial professional
- employee
- reinsurer
- consultants/vendors
- borrowers
- regulators
- rating agencies
- associations
- trade associations
Question 7.
employee values
Correct Answer: I value the long-term employment. I enjoy my coworkers. I'm
proud to work for a reputable company. I appreciate the salary and benefits.
Question 8.
reinsurance
Correct Answer: Insurance that one insurance company, known as the direct
writer, purchases from another insurance company, known as the rein- surer, to
transfer all or part of the risk on insurance policies that the direct writer issued.
Question 9.
consultants/vendors example
Correct Answer: I'm a public accountant. I provide external audit services to
Forthright. Many vendors provide goods and services to Forthright.
Question 10.
Borrowers example
Correct Answer: I'm a real estate developer. To fund construction projects, I
borrow from Forthright Financial. Forthright lends money as one of its
investments. They expect to earn a return, so they keep a close eye on me.
,Question 11.
regulators example
Correct Answer: I conduct in-person examinations of insurance companies that
do business in my state. I make sure they comply with regulations and maintain
fair business practices.
Question 12.
rating agencies example
Correct Answer: I assign a grade to Forthright Financial and other companies.
The grade, called a rating, indicates my company's opinion of Forthright's
overall health and stability.
Question 13.
associations example
Correct Answer: As a Forthright actuary, I belong to several organizations that
set professional standards. Forthright employs many professionals—actuaries,
accountants, auditors, attorneys, underwriters, medical directors, and others.
All of these groups have professional associations.
Question 14.
Select each group which counts among an insurance company's stakeholders. a. Financial
professionals b. Reinsurance companies c. Employees d. Trade associations e. Owners of
company stock f. Policyowners
Correct Answer: All of them -
Question 15.
In each of the following questions, select the person who would most likely make each
statement about his or her interests as a stakeholder. "My company provides backup to
Forthright on paying its claims." a. Policyowner b. Stockholder c. Employee d. Reinsurer e.
Financial professional
Correct Answer: D.
Question 16.
In each of the following questions, select the person who would most likely make each
statement about his or her interests as a stakeholder. "I need prompt handling of my
transactions when I make a withdrawal." a. Policyowner b. Stockholder c. Employee d.
Reinsurer e. Financial professional
Correct Answer: A.
, Question 17.
In each of the following questions, select the person who would most likely make each
statement about his or her interests as a stakeholder. "I value having a good job with
reliable income and benefits." a. Policyowner b. Stockholder c. Employee d. Reinsurer e.
Financial professional
Correct Answer: C.
Question 18.
In each of the following questions, select the person who would most likely make each
statement about his or her interests as a stakeholder. "I need Forthright to offer products
that meet my clients' needs so that I can earn an income." a. Policyowner b. Stockholder c.
Employee d. Reinsurer e. Financial professional
Correct Answer: E.
Question 19.
In each of the following questions, select the person who would most likely make each
statement about his or her interests as a stakeholder. "I need to earn a return on my stock
investment in Forthright." a. Policyowner b. Stockholder c. Employee d. Reinsurer e.
Financial professional
Correct Answer: B.
Question 20.
different stakeholder goals
Correct Answer: Declare a stockholder dividend Declare a policyowner dividend
Purchase another company Expand into a new product line company needs to
Balance the interests of the different stakeholder groups and Prioritize each
group's interests, if necessary
Question 21.
Board of directors
Correct Answer: A corporation's governing body, elected by the owners, that
makes broad policy decisions to ensure that stakeholder interests are
safeguarded appropriately.
Question 22.
governance
Correct Answer: A corporate board's accountability, responsibility, and authority
to direct an organization to properly fulfill its missions on behalf of legitimate
stakeholders.
