Michigan Surplus Lines Insurance Exam Prep
100% Accurate Answers.
(1)Surplus |Lines |premiums |typically |expand |during:
A) |A |soft |Market
B) |A |Hard |Market |correct |answers |A |Hard |Market.
Surplus |lines |premiums |typically |expand |during |a |hard |market.
(2) |During |the |time |of |a |hard |market, |insurers |will:
A) |Tighten |their |underwriting |standards
B) |Loosen |their |underwriting |standards |correct |answers |A) |Tighten |their |underwriting |standards.
Tighten |and |raise |premiums.
(3) |A |Ceding |company |(Choose |all |that |apply):
A) |Is |a |primary |insurer
B) |Is |also |a |reinsurer
C) |Is |always |also |a |captive |company
D) |Passes |on |to |other |insurers |some |part |of |its |risk |under |insurance |policies |it |has |accepted
E) |Will |not |be |held |liable |to |pay |the |claims |in |the |event |of |default |by |the |reinsurer. |correct |answers
|A) |Is |primary |Insurer
D) |Passes |on |to |other |insurers |some |of |its |risk |under |insurance |policies |it |has |accepted
(4) |An |insurers |appetite |to |write |business |is |often |measured |by:
A) |Its |risk |class
,B) |Its |status
C) |Its |financial |strength
D)Its |premium |to |surplus |ratio |correct |answers |D) |Its |premium |to |surplus |ratio
(5) |A |surplus |lines |insurer:
A) |Has |to |be |licensed |and |admitted |in |the |same |state |as |the |broker
B) |Is |not |always |licensed |or |admitted |in |the |same |state |as |the |broker |correct |answers |B) |Is |not
|always |licensed |or |admitted |in |the |same |state |as |the |broker
(6) |Karl |the |fortune |teller |believes |that |the |world |is |full |of |uncertainty, |and |so |is |his |destiny. |He
|often |engages |himself |in |extreme |sports |activities |for |fun |and |for |challenge. |He |thinks |he |will |need
|more |insurance |coverage |in |the |future. |He |prefers |a |surplus |line |policy.
A) |This |is |a |good |idea
B) |This |is |probably |not |a |good |idea |correct |answers |B) |This |is |probably |not |a |good |idea
Surplus |lines |is |for |hard |to |place |risk. |nothing |about |this |is |really |hard |to |place, |and |he |should
|maybe |just |buy |more |life |insurance.
(7) |A |domestic |surplus |lines |company |must |be |licensed |in |at |least |one |state |or |other |US |jurisdiction.
True |or |False |correct |answers |True
(8) |When |a |surplus |lines |insurance |for |coverage |in |this |state |is |not |placed |through |a |licensed |surplus
|lines |agent |here,
A) |The |transaction |is |a |foreign |transaction |that |is |still |technically |lawful
B) |The |transaction |would |still |qualify |as |the |lawful |transaction |of |surplus |lines |insurance
C) |The |transaction |would |not |qualify |as |the |lawful |transaction |of |surplus |lines |insurance |correct
|answers |C) |The |transaction |would |not |qualify |as |the |lawful |transaction |of |surplus |lines |insurance
, (9) |The |Terrorism |Risk |Insurance |Act |(TRIA):
A) |Applies |to |surplus |lines |policies
B) |Does |not |apply |to |surplus |lines |policies |correct |answers |A) |Applies |to |surplus |lines |policies.
(10) |A |surplus |lines |policy:
A) |Is |still |covered |by |the |state |guaranty |fund |when |placed |locally
B) |Is |covered |by |the |state |guaranty |fund |as |long |as |it |is |placed |via |a |licensed |broker |or |agent.
C) |Is |not |covered |by |the |state |guaranty |fund |correct |answers |C) |Is |not |covered |by |the |state |guaranty
|fund
(11) |For |surplus |lines |insurers, |the |relative |freedom |from |form |and |rate |regulation |give:
A)Flexibility
B) |Legal |Waiver
C) |Cost |Advantage
D) |The |right |of |non-disclosure |correct |answers |A) |Flexibility
(12) |In |the |context |of |insurance, |losses |depend |primarily |on |which |two |variables:
A) |The |background
B) |The |number |of |losses
C) |The |amount |involved
D) |The |nature |of |events
E) |The |policy |correct |answers |B) |The |number |of |losses
C) |The |amount |involved
(13) |Who |must |verify |the |financial |strength |and |viability |of |a |nonadmitted |insurer?
A) |The |insurance |commission
100% Accurate Answers.
(1)Surplus |Lines |premiums |typically |expand |during:
A) |A |soft |Market
B) |A |Hard |Market |correct |answers |A |Hard |Market.
Surplus |lines |premiums |typically |expand |during |a |hard |market.
(2) |During |the |time |of |a |hard |market, |insurers |will:
A) |Tighten |their |underwriting |standards
B) |Loosen |their |underwriting |standards |correct |answers |A) |Tighten |their |underwriting |standards.
Tighten |and |raise |premiums.
(3) |A |Ceding |company |(Choose |all |that |apply):
A) |Is |a |primary |insurer
B) |Is |also |a |reinsurer
C) |Is |always |also |a |captive |company
D) |Passes |on |to |other |insurers |some |part |of |its |risk |under |insurance |policies |it |has |accepted
E) |Will |not |be |held |liable |to |pay |the |claims |in |the |event |of |default |by |the |reinsurer. |correct |answers
|A) |Is |primary |Insurer
D) |Passes |on |to |other |insurers |some |of |its |risk |under |insurance |policies |it |has |accepted
(4) |An |insurers |appetite |to |write |business |is |often |measured |by:
A) |Its |risk |class
,B) |Its |status
C) |Its |financial |strength
D)Its |premium |to |surplus |ratio |correct |answers |D) |Its |premium |to |surplus |ratio
(5) |A |surplus |lines |insurer:
A) |Has |to |be |licensed |and |admitted |in |the |same |state |as |the |broker
B) |Is |not |always |licensed |or |admitted |in |the |same |state |as |the |broker |correct |answers |B) |Is |not
|always |licensed |or |admitted |in |the |same |state |as |the |broker
(6) |Karl |the |fortune |teller |believes |that |the |world |is |full |of |uncertainty, |and |so |is |his |destiny. |He
|often |engages |himself |in |extreme |sports |activities |for |fun |and |for |challenge. |He |thinks |he |will |need
|more |insurance |coverage |in |the |future. |He |prefers |a |surplus |line |policy.
A) |This |is |a |good |idea
B) |This |is |probably |not |a |good |idea |correct |answers |B) |This |is |probably |not |a |good |idea
Surplus |lines |is |for |hard |to |place |risk. |nothing |about |this |is |really |hard |to |place, |and |he |should
|maybe |just |buy |more |life |insurance.
(7) |A |domestic |surplus |lines |company |must |be |licensed |in |at |least |one |state |or |other |US |jurisdiction.
True |or |False |correct |answers |True
(8) |When |a |surplus |lines |insurance |for |coverage |in |this |state |is |not |placed |through |a |licensed |surplus
|lines |agent |here,
A) |The |transaction |is |a |foreign |transaction |that |is |still |technically |lawful
B) |The |transaction |would |still |qualify |as |the |lawful |transaction |of |surplus |lines |insurance
C) |The |transaction |would |not |qualify |as |the |lawful |transaction |of |surplus |lines |insurance |correct
|answers |C) |The |transaction |would |not |qualify |as |the |lawful |transaction |of |surplus |lines |insurance
, (9) |The |Terrorism |Risk |Insurance |Act |(TRIA):
A) |Applies |to |surplus |lines |policies
B) |Does |not |apply |to |surplus |lines |policies |correct |answers |A) |Applies |to |surplus |lines |policies.
(10) |A |surplus |lines |policy:
A) |Is |still |covered |by |the |state |guaranty |fund |when |placed |locally
B) |Is |covered |by |the |state |guaranty |fund |as |long |as |it |is |placed |via |a |licensed |broker |or |agent.
C) |Is |not |covered |by |the |state |guaranty |fund |correct |answers |C) |Is |not |covered |by |the |state |guaranty
|fund
(11) |For |surplus |lines |insurers, |the |relative |freedom |from |form |and |rate |regulation |give:
A)Flexibility
B) |Legal |Waiver
C) |Cost |Advantage
D) |The |right |of |non-disclosure |correct |answers |A) |Flexibility
(12) |In |the |context |of |insurance, |losses |depend |primarily |on |which |two |variables:
A) |The |background
B) |The |number |of |losses
C) |The |amount |involved
D) |The |nature |of |events
E) |The |policy |correct |answers |B) |The |number |of |losses
C) |The |amount |involved
(13) |Who |must |verify |the |financial |strength |and |viability |of |a |nonadmitted |insurer?
A) |The |insurance |commission
