UGA RMIN 4000 Brown Test 2 Questions
and Answers Graded A+
Private insurance industry - Correct answer-U.S. insurance industry employed 2.6
million people
Insurers paid $20.5 billion in premium taxes
Major types of private insurers - Correct answer-Stock insurers
mutual insurers
lloyd's of london
Stock insurers - Correct answer-A corporation owned by stockholders
Objective is to earn profit for stockholders by increasing the value of the stock and
paying dividends
Stockholders elect board of elections
©COPYRIGHT 2025, ALL RIGHTS RESERVED 1
,Mutual insurers - Correct answer-A corporation owned by policyholders
Profits are distributed to policyholders by dividends or rate reductions
Policyholders elect board of electives
Loyd's of london - Correct answer-World's leading market that provides service
and physical facilities for its members to write specialized lines of insurance
NOT an insurer
Types of mutual insurers - Correct answer-Assessment mutual
Advance premium mutual
Fraternal insurer
Assessment mutual - Correct answer-Insurer has the right to assess policyholders
an additional amount if the insurer's financial operations are unfavorable
Assessment: additional charge - if insurance company is losing money
©COPYRIGHT 2025, ALL RIGHTS RESERVED 2
,As result very few still exist (no one wanna pay that, assessment difficult to
collect)
Advance premium mutual - Correct answer-Insurer does not issue assessable
policies
Most common mutual insurance type
Fraternal insurer - Correct answer-Provides life and health insurance to members
of a social or religious organization
Lloyd's structure - Correct answer-Loyd's brokers: represent policyholders to
arrange covers with syndicates
Loyd's syndicates: offer insurance contracts in the market
-Underwriters
Lloyd's syndicates - Correct answer-Must meet lloyd's stringent capital
requirements
Members
©COPYRIGHT 2025, ALL RIGHTS RESERVED 3
, Join together and provide capital to form syndicates, receiving profits or bearing
losses
Most are corporations or limited partnerships
"Names" are high net worth individuals
managing agents: manage the syndicates, who typically specialize in certain lines
underwriters: work for the syndicates to assess risks and determine premiums
Insurance agent - Correct answer-Someone who legally represents the principal
(insurance company) and has the authority to act on the principal's behalf
The principal is legally responsible for all acts of an agent when the agent is acting
within scope of authority
Typically has the authority to bind coverage
Client (business) ← → Broker ←→ insurance carrier
©COPYRIGHT 2025, ALL RIGHTS RESERVED 4
and Answers Graded A+
Private insurance industry - Correct answer-U.S. insurance industry employed 2.6
million people
Insurers paid $20.5 billion in premium taxes
Major types of private insurers - Correct answer-Stock insurers
mutual insurers
lloyd's of london
Stock insurers - Correct answer-A corporation owned by stockholders
Objective is to earn profit for stockholders by increasing the value of the stock and
paying dividends
Stockholders elect board of elections
©COPYRIGHT 2025, ALL RIGHTS RESERVED 1
,Mutual insurers - Correct answer-A corporation owned by policyholders
Profits are distributed to policyholders by dividends or rate reductions
Policyholders elect board of electives
Loyd's of london - Correct answer-World's leading market that provides service
and physical facilities for its members to write specialized lines of insurance
NOT an insurer
Types of mutual insurers - Correct answer-Assessment mutual
Advance premium mutual
Fraternal insurer
Assessment mutual - Correct answer-Insurer has the right to assess policyholders
an additional amount if the insurer's financial operations are unfavorable
Assessment: additional charge - if insurance company is losing money
©COPYRIGHT 2025, ALL RIGHTS RESERVED 2
,As result very few still exist (no one wanna pay that, assessment difficult to
collect)
Advance premium mutual - Correct answer-Insurer does not issue assessable
policies
Most common mutual insurance type
Fraternal insurer - Correct answer-Provides life and health insurance to members
of a social or religious organization
Lloyd's structure - Correct answer-Loyd's brokers: represent policyholders to
arrange covers with syndicates
Loyd's syndicates: offer insurance contracts in the market
-Underwriters
Lloyd's syndicates - Correct answer-Must meet lloyd's stringent capital
requirements
Members
©COPYRIGHT 2025, ALL RIGHTS RESERVED 3
, Join together and provide capital to form syndicates, receiving profits or bearing
losses
Most are corporations or limited partnerships
"Names" are high net worth individuals
managing agents: manage the syndicates, who typically specialize in certain lines
underwriters: work for the syndicates to assess risks and determine premiums
Insurance agent - Correct answer-Someone who legally represents the principal
(insurance company) and has the authority to act on the principal's behalf
The principal is legally responsible for all acts of an agent when the agent is acting
within scope of authority
Typically has the authority to bind coverage
Client (business) ← → Broker ←→ insurance carrier
©COPYRIGHT 2025, ALL RIGHTS RESERVED 4
