2/25/25, 4:30 PM Mass State Life Insurance updated 2025 with verified solutions Flashcards | Quizlet
Mass State Life Insurance updated 2025 with
verified solutions
Save
Terms in this set (311)
Which of the following A participating life policy is one in which the
describes a participating policyowner receives dividends deriving from the
life insurance policy? company's divisible surplus
What type of reinsurance Under treaty reinsurance, each party automatically
contract between two accepts specific percentages of the insurer's business.
insurers involves an
automatic sharing of the
risks assumed?
At what point must a life Upon completion of the application
insurance applicant be
informed of their rights
that fall under the Fair
Credit Reporting Act?
The State Guaranty that a claim will be paid if an admitted insurer
Association guarantees becomes insolvent
Dividends from a mutual Policyholders
insurance company are
paid to whom?
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,2/25/25, 4:30 PM Mass State Life Insurance updated 2025 with verified solutions Flashcards | Quizlet
What is considered the reserves
accounting measurement
of an insurance company's
future obligations to its
policyowners?
A group-owned insurance risk retention group
company that is formed to
assume and spread the
liability risks of its
members is known as a
Which of the following is a Lloyd's organization
syndicate established by a
group of insurers to share
underwriting duties?
An agent's authority to agent's contract and the insurance company's
bind an insurer to an appointment
insurance contract may be
granted in the
Dividends from a stock shareholders
insurance company are
normally sent to
-insurance is based on the sharing of risks among a
large group of people
Law of Large numbers -states that the larger the number of people, the more
predictable the actual losses will be
-companies use this data to calculate rates
-involves opportunity for either loss or gain
Speculative risk
-not covered by insurance companies
-a situation that can only result in a loss, there is no
pure risk opportunity for financial gain
-only type of risk that is insurable
treatment of risk through: simply avoiding as many risks as possible
avoidance -effective but not always practical
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,2/25/25, 4:30 PM Mass State Life Insurance updated 2025 with verified solutions Flashcards | Quizlet
since we cannot avoid risk entirely we often attempt
treatment of risk through- to lessen the possibility of a loss by taking acting to
reduction reduce the risk
-
when a group of individuals or businesses with similar
exposures share the losses that occur within that
treatment of risk through-
group
sharing
-reciprocal insurance exchange is a formal risk sharing
arrangement
also known as self-insurance: when individuals have
treatment of risk through-
the financial ability to fund losses by themselves when
retention
they occur
the most effective way to handle risk
treatment of risk through- - risk is transferred to another party - insurance is the
transfer most common method of transferring risk from an
individual or group to an insurance company
-must be due to chance
-cannot be catastrophic
-must be randomly selected
• Loss exposure to be insured must be large -
elements of insurable risk
Insurance company must be able to predict
loss ( based on law of large numbers)
- Loss must be definite and measurable - Time, place,
amount, and when payable
-to provide financial protection against losses that
may be incurred due to a chance happening or event
such as death, illness, or accident
nature of insurance
-protection is provided through an insurance policy
which is a simple device for accumulating funds to
meet these uncertain losses
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, 2/25/25, 4:30 PM Mass State Life Insurance updated 2025 with verified solutions Flashcards | Quizlet
ABC Company is Risk reduction can reduce the chance that a particular
attempting to minimize the loss will occur, or it can reduce the amount of a
severity of potential losses potential loss if it occurs.
within its company. The
company is engaged in
risk
How can an insurance Many insurers are able to minimize exposure to loss
company minimize by reinsuring risks.
exposure to loss?
For insurance purposes, Similar objects of insurance that are exposed to the
similar objects which are same group of perils are called homogeneous
exposed to the same exposure units.
group of perils are
referred to as
Which of the following risk
can be defined as "the
potential for loss"?
An insurer has a Reinsurance contracts accept a portion of the risk
contractual agreement underwritten by another insurer who has contracted
which transfers a portion for the entire coverage amount.
of its risk exposure to
another insurer. What type
of contractual
arrangement is this?
Which of the following peril
can be defined as a cause
of a loss?
What type of risk involves speculative
the potential for loss and
the possibility for gain?
Purchasing insurance is an transference
example of risk
https://quizlet.com/1010521866/mass-state-life-insurance-updated-2025-with-verified-solutions-flash-cards/?new 4/36
Mass State Life Insurance updated 2025 with
verified solutions
Save
Terms in this set (311)
Which of the following A participating life policy is one in which the
describes a participating policyowner receives dividends deriving from the
life insurance policy? company's divisible surplus
What type of reinsurance Under treaty reinsurance, each party automatically
contract between two accepts specific percentages of the insurer's business.
insurers involves an
automatic sharing of the
risks assumed?
At what point must a life Upon completion of the application
insurance applicant be
informed of their rights
that fall under the Fair
Credit Reporting Act?
The State Guaranty that a claim will be paid if an admitted insurer
Association guarantees becomes insolvent
Dividends from a mutual Policyholders
insurance company are
paid to whom?
https://quizlet.com/1010521866/mass-state-life-insurance-updated-2025-with-verified-solutions-flash-cards/?new 1/36
,2/25/25, 4:30 PM Mass State Life Insurance updated 2025 with verified solutions Flashcards | Quizlet
What is considered the reserves
accounting measurement
of an insurance company's
future obligations to its
policyowners?
A group-owned insurance risk retention group
company that is formed to
assume and spread the
liability risks of its
members is known as a
Which of the following is a Lloyd's organization
syndicate established by a
group of insurers to share
underwriting duties?
An agent's authority to agent's contract and the insurance company's
bind an insurer to an appointment
insurance contract may be
granted in the
Dividends from a stock shareholders
insurance company are
normally sent to
-insurance is based on the sharing of risks among a
large group of people
Law of Large numbers -states that the larger the number of people, the more
predictable the actual losses will be
-companies use this data to calculate rates
-involves opportunity for either loss or gain
Speculative risk
-not covered by insurance companies
-a situation that can only result in a loss, there is no
pure risk opportunity for financial gain
-only type of risk that is insurable
treatment of risk through: simply avoiding as many risks as possible
avoidance -effective but not always practical
https://quizlet.com/1010521866/mass-state-life-insurance-updated-2025-with-verified-solutions-flash-cards/?new 2/36
,2/25/25, 4:30 PM Mass State Life Insurance updated 2025 with verified solutions Flashcards | Quizlet
since we cannot avoid risk entirely we often attempt
treatment of risk through- to lessen the possibility of a loss by taking acting to
reduction reduce the risk
-
when a group of individuals or businesses with similar
exposures share the losses that occur within that
treatment of risk through-
group
sharing
-reciprocal insurance exchange is a formal risk sharing
arrangement
also known as self-insurance: when individuals have
treatment of risk through-
the financial ability to fund losses by themselves when
retention
they occur
the most effective way to handle risk
treatment of risk through- - risk is transferred to another party - insurance is the
transfer most common method of transferring risk from an
individual or group to an insurance company
-must be due to chance
-cannot be catastrophic
-must be randomly selected
• Loss exposure to be insured must be large -
elements of insurable risk
Insurance company must be able to predict
loss ( based on law of large numbers)
- Loss must be definite and measurable - Time, place,
amount, and when payable
-to provide financial protection against losses that
may be incurred due to a chance happening or event
such as death, illness, or accident
nature of insurance
-protection is provided through an insurance policy
which is a simple device for accumulating funds to
meet these uncertain losses
https://quizlet.com/1010521866/mass-state-life-insurance-updated-2025-with-verified-solutions-flash-cards/?new 3/36
, 2/25/25, 4:30 PM Mass State Life Insurance updated 2025 with verified solutions Flashcards | Quizlet
ABC Company is Risk reduction can reduce the chance that a particular
attempting to minimize the loss will occur, or it can reduce the amount of a
severity of potential losses potential loss if it occurs.
within its company. The
company is engaged in
risk
How can an insurance Many insurers are able to minimize exposure to loss
company minimize by reinsuring risks.
exposure to loss?
For insurance purposes, Similar objects of insurance that are exposed to the
similar objects which are same group of perils are called homogeneous
exposed to the same exposure units.
group of perils are
referred to as
Which of the following risk
can be defined as "the
potential for loss"?
An insurer has a Reinsurance contracts accept a portion of the risk
contractual agreement underwritten by another insurer who has contracted
which transfers a portion for the entire coverage amount.
of its risk exposure to
another insurer. What type
of contractual
arrangement is this?
Which of the following peril
can be defined as a cause
of a loss?
What type of risk involves speculative
the potential for loss and
the possibility for gain?
Purchasing insurance is an transference
example of risk
https://quizlet.com/1010521866/mass-state-life-insurance-updated-2025-with-verified-solutions-flash-cards/?new 4/36
