OHIO HEALTH AND LIFE INSURANCE MAIN EXAM SCRIPT
2025 QUESTIONS WITH ANSWERS GUARANTEE A+
✔✔Human Value approach - ✔✔- the approach to determine how much insurance one
should get
- it looks at the lost earnings potential if someone should die
- often limited to 10x annual income
✔✔Needs Approach - ✔✔- the amount of money to pay off debts, funeral, shcool, etc
✔✔How are life insurance premiums determined - ✔✔1) Mortality (the probability of
death)
2) Interest (how much the insurance co earns on the premiums)
3) Expenses (cost of issuing the policy)
✔✔Net Premium - ✔✔Mortality + Interest costs
✔✔Gross Prium - ✔✔Mortality + interest costs + expense costs
✔✔Rate - ✔✔The price of insurance per 1000 of coverage
ie if it costs 3.45 / unit than u multiply by 1000 to get total cost
✔✔Earned Premium - ✔✔the amount of premium that has been paid to date
✔✔Unearned Premium - ✔✔the amount that has not been paid to date but if he pays
more, than he gets it back
✔✔Departments of an insurance co - ✔✔1) underwrite
2) marketing and sales
3) Actuarial Department
4) Claims Department
✔✔Underwriting department - ✔✔determines whether the applicant can get insurance
✔✔Actuarial Department - ✔✔Determines the premium rates, reserves and persistency
rates of policies
✔✔Types of Insurance Companies - ✔✔Determined by where they are located
✔✔Domestic Insurance Co - ✔✔Charter located in the state it's doing business in
✔✔Foreign Insurance Co - ✔✔Insurance Co that's allowed to do business in a state
other than their home state
,✔✔Alien Insurance Co - ✔✔An insurer authorized to conduct business in any of the 50
states but who has its hoje office in another country
✔✔Ownership of Insurance Company - ✔✔2 types
1) mutual co or participating company (policy owners own the company). The dividend
is considered a return of premium
2) Stock company or Non participating company
✔✔Authorized Insurance Company - ✔✔An insurance company that can operate in a
state. You need a cCertificate of Authority to operate.
✔✔Cerrtificate of Authority - ✔✔What an insurance company needs to have in order to
operate in a state
✔✔Fraternal Organization - ✔✔A non profit or benevolent association and only can
provide insurance to its members.
✔✔Fraternal Agent - ✔✔The agent of the fraternal organization that can sell the
insurance
✔✔Reciprocal Organization - ✔✔an unincorporated organization whereby members
insure eachother. managed by an attorney in fact
✔✔Attorney in Fact - ✔✔the agent in a reciprocal organizaiton that can sell the
insurance
✔✔Lloyds Association - ✔✔group of individuals who share the risk and the exposure
- known for insuring unusual risks
✔✔Surplus Lines of Insurance - ✔✔An insurance co that is authorized to sell
unauthorized insurance. You can only go to a surplus lines co if you cant get it from a
regular insurance company
✔✔Risk Retention Group - ✔✔- each policy owner is also a stockholder and can only
sell liability insurance (medical malpractice, general liability, product liability)
- the group assumes the risk themselves
✔✔Reinsurance - ✔✔Insurance purchased by insurance companies
- limits liability of insurance co and prevents catastrophic loss
✔✔Facultative Reinsurance - ✔✔insurance co and re insurance co make their own
agreement per loss exposure
, ✔✔Automatic or Treaty Insurance - ✔✔An automatic acceptance of a risk between the
insurance company and the reinsurance company
✔✔Retrocession - ✔✔When a reinsurance company reinsures with another reinsurer
✔✔Primary Insurer - ✔✔The insurance company that is transfering its risk to another
insurance company
✔✔Federal Regulation 18 USC 1033/1034 - ✔✔Anyone who tries to sell insurance
deceptively
- can be fined 50k and up to 10 years
- If material misrepresentation was the primary cause of the insurance co going under,
than the prison scentence could be 15 years
✔✔Violent Crime Control Act - ✔✔It is illegal for an individual who's been in a crime
involving dishonesy, breach of trust of fiduciary responsibility to work in the business of
insurance without consent from the insurance regulatory official
✔✔Types of Marketing and Distribution systems - ✔✔1) Independent - places insurance
with multiple insurers; owns the business and the policy sold
2) Direct or Captive agents - can only place business with own company
3) Exclusive - Independent agents that place business of one insurer
4) Direct Response - when insurance companies sell their insurance in the mass market
✔✔PPGA (Personal Producing General Agent ) - ✔✔- an individual producer that does
not appoint other producers
✔✔MGA (Managing General Agent) - ✔✔- appoints hires and supervises producers
while also providing underwriting and claims administration
✔✔Types of Producers - ✔✔1) agents
2) brokers (they represent themselves and the people they are trying to buy insurance
for
3) solicitors
4) Customer service representatives
✔✔Tort of Error and Omission (E&O) - ✔✔When a producer engages in an honest or
unintentional mistake
- producer can buy E&O insurance
✔✔What does E&O insurance not cover - ✔✔- fraud or ciminal acts
- misappropriation of client funds
- actions covered by other insurance
2025 QUESTIONS WITH ANSWERS GUARANTEE A+
✔✔Human Value approach - ✔✔- the approach to determine how much insurance one
should get
- it looks at the lost earnings potential if someone should die
- often limited to 10x annual income
✔✔Needs Approach - ✔✔- the amount of money to pay off debts, funeral, shcool, etc
✔✔How are life insurance premiums determined - ✔✔1) Mortality (the probability of
death)
2) Interest (how much the insurance co earns on the premiums)
3) Expenses (cost of issuing the policy)
✔✔Net Premium - ✔✔Mortality + Interest costs
✔✔Gross Prium - ✔✔Mortality + interest costs + expense costs
✔✔Rate - ✔✔The price of insurance per 1000 of coverage
ie if it costs 3.45 / unit than u multiply by 1000 to get total cost
✔✔Earned Premium - ✔✔the amount of premium that has been paid to date
✔✔Unearned Premium - ✔✔the amount that has not been paid to date but if he pays
more, than he gets it back
✔✔Departments of an insurance co - ✔✔1) underwrite
2) marketing and sales
3) Actuarial Department
4) Claims Department
✔✔Underwriting department - ✔✔determines whether the applicant can get insurance
✔✔Actuarial Department - ✔✔Determines the premium rates, reserves and persistency
rates of policies
✔✔Types of Insurance Companies - ✔✔Determined by where they are located
✔✔Domestic Insurance Co - ✔✔Charter located in the state it's doing business in
✔✔Foreign Insurance Co - ✔✔Insurance Co that's allowed to do business in a state
other than their home state
,✔✔Alien Insurance Co - ✔✔An insurer authorized to conduct business in any of the 50
states but who has its hoje office in another country
✔✔Ownership of Insurance Company - ✔✔2 types
1) mutual co or participating company (policy owners own the company). The dividend
is considered a return of premium
2) Stock company or Non participating company
✔✔Authorized Insurance Company - ✔✔An insurance company that can operate in a
state. You need a cCertificate of Authority to operate.
✔✔Cerrtificate of Authority - ✔✔What an insurance company needs to have in order to
operate in a state
✔✔Fraternal Organization - ✔✔A non profit or benevolent association and only can
provide insurance to its members.
✔✔Fraternal Agent - ✔✔The agent of the fraternal organization that can sell the
insurance
✔✔Reciprocal Organization - ✔✔an unincorporated organization whereby members
insure eachother. managed by an attorney in fact
✔✔Attorney in Fact - ✔✔the agent in a reciprocal organizaiton that can sell the
insurance
✔✔Lloyds Association - ✔✔group of individuals who share the risk and the exposure
- known for insuring unusual risks
✔✔Surplus Lines of Insurance - ✔✔An insurance co that is authorized to sell
unauthorized insurance. You can only go to a surplus lines co if you cant get it from a
regular insurance company
✔✔Risk Retention Group - ✔✔- each policy owner is also a stockholder and can only
sell liability insurance (medical malpractice, general liability, product liability)
- the group assumes the risk themselves
✔✔Reinsurance - ✔✔Insurance purchased by insurance companies
- limits liability of insurance co and prevents catastrophic loss
✔✔Facultative Reinsurance - ✔✔insurance co and re insurance co make their own
agreement per loss exposure
, ✔✔Automatic or Treaty Insurance - ✔✔An automatic acceptance of a risk between the
insurance company and the reinsurance company
✔✔Retrocession - ✔✔When a reinsurance company reinsures with another reinsurer
✔✔Primary Insurer - ✔✔The insurance company that is transfering its risk to another
insurance company
✔✔Federal Regulation 18 USC 1033/1034 - ✔✔Anyone who tries to sell insurance
deceptively
- can be fined 50k and up to 10 years
- If material misrepresentation was the primary cause of the insurance co going under,
than the prison scentence could be 15 years
✔✔Violent Crime Control Act - ✔✔It is illegal for an individual who's been in a crime
involving dishonesy, breach of trust of fiduciary responsibility to work in the business of
insurance without consent from the insurance regulatory official
✔✔Types of Marketing and Distribution systems - ✔✔1) Independent - places insurance
with multiple insurers; owns the business and the policy sold
2) Direct or Captive agents - can only place business with own company
3) Exclusive - Independent agents that place business of one insurer
4) Direct Response - when insurance companies sell their insurance in the mass market
✔✔PPGA (Personal Producing General Agent ) - ✔✔- an individual producer that does
not appoint other producers
✔✔MGA (Managing General Agent) - ✔✔- appoints hires and supervises producers
while also providing underwriting and claims administration
✔✔Types of Producers - ✔✔1) agents
2) brokers (they represent themselves and the people they are trying to buy insurance
for
3) solicitors
4) Customer service representatives
✔✔Tort of Error and Omission (E&O) - ✔✔When a producer engages in an honest or
unintentional mistake
- producer can buy E&O insurance
✔✔What does E&O insurance not cover - ✔✔- fraud or ciminal acts
- misappropriation of client funds
- actions covered by other insurance
