USAA Test Questions and Answers

What type of reinsurance contract involves two companies automatically sharing their risk exposure? - ans-treaty A group-owned insurance company that is formed to assume and spread the liability risks of its members is known as a - ans-risk retention group What is the name of the law that requires insurers to disclose information gathering practices and where the information was obtained? - ans-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: - ans-reserves A nonprofit incorporated society that does not have capital stock and operates for the sole benefit of its members is known as: - ans-fraternal benefit society If a contract of adhesion contains questionable language, to whom would the interpretation be in favor of? - ans-insured What is a warranty? - ans-is a statement guaranteed to be true A policy of adhesion can only be modified by whom? - ans-insurance company Stranger Originated Life Insurance (STOLI) has been found to be in violation of which of the following contractual elements? - ans-Legal Purpose (Insurable Interest)