USAA TEST EXAM QUESTIONS CORRECTLY ANSWERED

USAA TEST EXAM QUESTIONS CORRECTLY ANSWERED What type of reinsurance contract involves two companies automatically sharing their risk exposure? - ANSWER treaty A group-owned insurance company that is formed to assume and spread the liability risks of its members is known as a - ANSWER risk retention group What is the name of the law that requires insurers to disclose information gathering practices and where the information was obtained? - ANSWER Fair Credit Reporting Act The stated amount or percent of liquid assets that an insurer must have on hand that will satisfy future obligations to its policyholders is called: - ANSWER reserves A nonprofit incorporated society that does not have capital stock and operates for the sole benefit of its members is known as: - ANSWER fraternal benefit society If a contract of adhesion contains questionable language, to whom would the interpretation be in favor of? - ANSWER insured What is a warranty? - ANSWER is a statement guaranteed to be true A policy of adhesion can only be modified by whom? - ANSWER insurance company Stranger Originated Life Insurance (STOLI) has been found to be in violation of which of the following contractual elements? - ANSWER Legal Purpose (Insurable Interest) Which of these is considered a statement that is assured to be true in every respect? - ANSWER warranty Which of these is NOT a type of agent authority? - ANSWER principal The Consideration clause of an insurance contract includes: - ANSWER the schedule and amount of premium payments What is the consideration given by an insurer in the Consideration clause of the life policy? - ANSWER Promise to pay a death benefit to a named beneficiary Who makes the legally enforceable promises in a unilateral insurance policy? - ANSWER insurance company All of the following are considered to be typical characteristics describing the nature of an insurance contract, EXCEPT: - ANSWER bilateral