CA LIFE EXAM – PSI 157 questions and
correct answers
CA LIFE EXAM – PSI 157 questions and
correct answers
A participating company is also referred to as which type of insurer? - ANSWER Mutual insurer
An insurer owned by its policyholders, is called a - ANSWER Mutual insurer
What is a participating life insurance policy? - ANSWER Contract that allows the policyowner to receive a
share of surplus in the form of policy dividends
An insurer enter into a contract with a third-party to ensure itself against losses from insurance policies
it issues. What is this agreement called? - ANSWER Reinsurance
John owns an insurance company that gives him the right to share and then sure surplus. What kind of
policy is this? - ANSWER Participating
Which of the following is not a characteristic of reinsurance? - ANSWER Increases the unearned
premium reserved
Which of the following is not a benefit of insurance? - ANSWER Losses due to fraud are eliminated
When a mutual insurer becomes a stock company, the process is called - ANSWER Demutualization
Which of the following is a contract that involves one party which indemnifies another one a loss arises
from an unknown event? - ANSWER Insurance policy
Which of the following is an insurer established by a parent company's loss exposure's? - ANSWER
Captive insurers
, CA LIFE EXAM – PSI 157 questions and
correct answers
Which of the following is not considered to be a definition for the term "loss"? - ANSWER Probability
that an event will occur
Which of the following is not considered a definition of a risk? - ANSWER The cause of loss
Which of the following best describes the statement; " the more times, and event is repeated, the more
predictable the outcome becomes"? - ANSWER Law of large numbers
Which of the following would not be accomplished with the purchase of an insurance policy? - ANSWER
Risk is eliminated
Which of the following is a situation where there is a possibility of either a loss or gain? - ANSWER
Speculative risk
Which of the following is any situation that presents the possibility of a loss? - ANSWER Loss
An insurer having a large number of similar exposure units is considered important because: - ANSWER
the greater the number insured, the more accurately that is her can predict losses & set appropriate
premiums
Which of these statements correctly describes risks? - ANSWER Pure risk is the only insurable risk
Which type of risk is gambling? - ANSWER Speculative risk
Moral hazard is described as the: - ANSWER increased chance of a loss because of an insured's dishonest
tendencies
All of the following circumstances must be met for los retention to be an effective, risk management
technique, except - ANSWER Probability of loss is unknown
correct answers
CA LIFE EXAM – PSI 157 questions and
correct answers
A participating company is also referred to as which type of insurer? - ANSWER Mutual insurer
An insurer owned by its policyholders, is called a - ANSWER Mutual insurer
What is a participating life insurance policy? - ANSWER Contract that allows the policyowner to receive a
share of surplus in the form of policy dividends
An insurer enter into a contract with a third-party to ensure itself against losses from insurance policies
it issues. What is this agreement called? - ANSWER Reinsurance
John owns an insurance company that gives him the right to share and then sure surplus. What kind of
policy is this? - ANSWER Participating
Which of the following is not a characteristic of reinsurance? - ANSWER Increases the unearned
premium reserved
Which of the following is not a benefit of insurance? - ANSWER Losses due to fraud are eliminated
When a mutual insurer becomes a stock company, the process is called - ANSWER Demutualization
Which of the following is a contract that involves one party which indemnifies another one a loss arises
from an unknown event? - ANSWER Insurance policy
Which of the following is an insurer established by a parent company's loss exposure's? - ANSWER
Captive insurers
, CA LIFE EXAM – PSI 157 questions and
correct answers
Which of the following is not considered to be a definition for the term "loss"? - ANSWER Probability
that an event will occur
Which of the following is not considered a definition of a risk? - ANSWER The cause of loss
Which of the following best describes the statement; " the more times, and event is repeated, the more
predictable the outcome becomes"? - ANSWER Law of large numbers
Which of the following would not be accomplished with the purchase of an insurance policy? - ANSWER
Risk is eliminated
Which of the following is a situation where there is a possibility of either a loss or gain? - ANSWER
Speculative risk
Which of the following is any situation that presents the possibility of a loss? - ANSWER Loss
An insurer having a large number of similar exposure units is considered important because: - ANSWER
the greater the number insured, the more accurately that is her can predict losses & set appropriate
premiums
Which of these statements correctly describes risks? - ANSWER Pure risk is the only insurable risk
Which type of risk is gambling? - ANSWER Speculative risk
Moral hazard is described as the: - ANSWER increased chance of a loss because of an insured's dishonest
tendencies
All of the following circumstances must be met for los retention to be an effective, risk management
technique, except - ANSWER Probability of loss is unknown
