RHODE ISLAND INSURANCE EXAM|133 QUESTIONS &
CORRECT VERIFIED ANSWERS 2025 LATEST UPDATE
1. the role of insurance is to ANS >> transfer the risk of financial loss from an
individual or business to an insurance company
2. organized and incorporated under state law owned by stockholders who
get a paid share of the company's profit through dividends. also referred to
as a nonparticipating or non-par bc policy holder do not participate in paid
dividends ANS >> stock insurance company
3. organized and incorporated under state law. but they have no stockholders.
instead, the policyholders own the company. owners get paid a share of
the companies profits through dividends. participating or par companies bc
policy owners do not participate in paid dividends ANS >> mutual insurer
companies
4. process of a stock company being converted into a mutual company ANS >>
https://www.stuvia.com/user/Mboffin 1/
18
, mutu- alization
5. process of a mutual company being converted into a stock company ANS >>
demu- tualization
6. an association formed to underwrite and issue insurance like coverage on
certain items and areas that might otherwise be uninsurable ANS >> Lloyds of
London
7. are a specialized branch of the insurance industry that insurers other in-
surance company's risk. *is an arrangement by which an insurance company
transfers or sells a portion of the risk to a reinsurance company ANS >>
reinsurers
8. the insurance company transferring the risk ANS >> ceding company
9. industrial insurance sold by home service or debit insurance companies AN
>> -
home service insurers
10. when 3rd party ownership is involved, applicants who also happen to be
the stated primary beneficiary are required to have ANS >> insurable interest
in the proposed insured
11. which is considered a statement that is assured to be true in every respect-
ANS >> warranty
12. which best describes a warranty ANS >> statement guaranteed to be true
13. which of these is not considered to be an element of an insurance con-
tract ANS >> negotiating
14. a life insurance policy would be considered contract without? ANS >>
https://www.stuvia.com/user/Mboffin 2/
18
, insurable interest
15. all of the following (bilateral unilateral aleatory adhesion) are considered
to be typical characteristics describing the nature of an insurance contract
except ANS >> bilateral
16. in an insurance contract the insurer is the only party who makes a legally
enforceable promise what kind of contract is this ANS >> unilateral
17. Taking receipt of premiums and holding them for the insurance company
is an example of ANS >> fiduciary responsibility
https://www.stuvia.com/user/Mboffin 3/
18
CORRECT VERIFIED ANSWERS 2025 LATEST UPDATE
1. the role of insurance is to ANS >> transfer the risk of financial loss from an
individual or business to an insurance company
2. organized and incorporated under state law owned by stockholders who
get a paid share of the company's profit through dividends. also referred to
as a nonparticipating or non-par bc policy holder do not participate in paid
dividends ANS >> stock insurance company
3. organized and incorporated under state law. but they have no stockholders.
instead, the policyholders own the company. owners get paid a share of
the companies profits through dividends. participating or par companies bc
policy owners do not participate in paid dividends ANS >> mutual insurer
companies
4. process of a stock company being converted into a mutual company ANS >>
https://www.stuvia.com/user/Mboffin 1/
18
, mutu- alization
5. process of a mutual company being converted into a stock company ANS >>
demu- tualization
6. an association formed to underwrite and issue insurance like coverage on
certain items and areas that might otherwise be uninsurable ANS >> Lloyds of
London
7. are a specialized branch of the insurance industry that insurers other in-
surance company's risk. *is an arrangement by which an insurance company
transfers or sells a portion of the risk to a reinsurance company ANS >>
reinsurers
8. the insurance company transferring the risk ANS >> ceding company
9. industrial insurance sold by home service or debit insurance companies AN
>> -
home service insurers
10. when 3rd party ownership is involved, applicants who also happen to be
the stated primary beneficiary are required to have ANS >> insurable interest
in the proposed insured
11. which is considered a statement that is assured to be true in every respect-
ANS >> warranty
12. which best describes a warranty ANS >> statement guaranteed to be true
13. which of these is not considered to be an element of an insurance con-
tract ANS >> negotiating
14. a life insurance policy would be considered contract without? ANS >>
https://www.stuvia.com/user/Mboffin 2/
18
, insurable interest
15. all of the following (bilateral unilateral aleatory adhesion) are considered
to be typical characteristics describing the nature of an insurance contract
except ANS >> bilateral
16. in an insurance contract the insurer is the only party who makes a legally
enforceable promise what kind of contract is this ANS >> unilateral
17. Taking receipt of premiums and holding them for the insurance company
is an example of ANS >> fiduciary responsibility
https://www.stuvia.com/user/Mboffin 3/
18
