Florida 240 License Exam Questions With Correct Answers

Florida 240 License Exam Questions With Correct Answers 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 An insurance applicant MUST be informed of an investigation regarding his/her reputation and character according to the: - ANSWER- Fair Credit Reporting Act A nonprofit incorporated society that does not have capital stock and operates for the sole benefit of its members is known as: - ANSWER- A fraternal benefit society What I the name of the law that requires insurers to disclose information gathering practices and where the information was obtained? - ANSWER- Fair Credit Reporting Act Who elects the governing body of a mutual insurance company? - ANSWER- Policyholders A group-owned insurance company that is formed to assume and spread the liability ricks of its members is known as a: - ANSWER- Risk retention group What type of reinsurance contract involves two companies automatically sharing their risk exposure? - ANSWER- treaty What year was the McCarran-Ferguson Act enacted? - ANSWER- 1945 Which of these describe a participating life insurance policy? - ANSWER- Policy owners are entitled to receive dividends At what point must a life insurance applicant be informed of their rights that fall under the Fair Credit Reporting Act? - ANSWER- Upon completion of the application Which of the following requires insurers to disclose when an applicant's consumer or credit history is being investigated: - ANSWER- 1970 - Fair Credit Reporting Act 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 All of the following are considered to be typical characteristics describing the nature of an insurance contract, EXCEPT: - ANSWER- Bilateral The part of a life insurance policy guaranteed to be true is called a(n) - ANSWER- warranty Statements made on an insurance application that are believed to be true to the best of the applicant's knowledge are called - ANSWER- representations Q purchases a $500,000 life insurance policy and pays $900 in premiums over the first six months. Q dies suddenly and the beneficiary is paid $500,000. This exchange of unequal values reflects which of the following insurance contract features? - ANSWER- Aleatory When must insurable interest be present in order for a life insurance policy to be valid? - ANSWER- When the application is made A life insurance arrangement which circumvents insurable interest statutes is called: - ANSWER- Investor-Originated Life Insurance