WEBCE CERTIFICATION EVALUATION
2026 QUESTIONS AND SOLUTIONS
VERIFIED ANSWERS GRADED A+
●● Underwriting vs. Actuarial Departments.
Answer: Two related insurance company functions. Through the process
of _________, applications are assessed for insurability and to assign
premium rates. The ________ department analyzes data to help estimate
future losses and to produce rate tables.
●● Managerial System vs. General Agency System.
Answer: Two variations of the career agency system in which producers
represent a single company. One is headed by a company employee
called a general manager (GM), the other by an independent contractor
called a general agent (GA).
●● Fraternal Insurance Company.
Answer: A non-profit form of insurance provider sponsored by an
organization of people who share a common ethnic, religious, or
vocational affiliation.
●● Peril and Hazard.
Answer: Two related general insurance terms:
,Peril is the immediate cause of a loss (and the event that is insured
against).
Hazard is any condition that increases the risk of incurring a loss.
●● Contract of adhesion.
Answer: A type of contract in which one party (the offeror) drafts the
terms that must be accepted as-is by the offeree. Insurance policies are
this type.
●● Mutual Insurance Company.
Answer: A form of insurance company that is owned by policyowners.
May distribute policy dividends (non-taxable) through participating
policies.
●● Independent Agency System.
Answer: An insurance distribution system in which the manager and
producers are fully independent and not affiliated with any single
insurer.
●● Buyer's Guide and Policy Summary.
Answer: Two related disclosure documents that are required by most
states to be presented to life and health insurance applicants at some
point during the buying process.
,●● Risk.
Answer: A basic insurance term referring to the possibility of incurring a
loss.
●● Law of Large Numbers.
Answer: A mathematical principle that is the basis for predicting the
odds of a loss occurring in a certain population in any given year.
●● Social Security (OASDI).
Answer: A federal insurance program that provides disability, death, and
retirement benefits to covered workers and their qualifying beneficiaries.
●● Agents vs. Brokers.
Answer: Two basic types of insurance producer: an ______ represents a
single insurer and a _____ sells policies from multiple insurers.
●● Reinsurance.
Answer: The process through which insurance companies spread large
risks among other insurers.
●● Domestic, Foreign, and Alien Insurers.
Answer: Insurers can be categorized by their state of domicile. There are
three categories, known as _____, _____, and _____.
, ●● Stock Insurance Company.
Answer: A form of insurance company that is owned by stockholders
who may or may not also be policyowners. May distribute stock
dividends (taxable).
●● Admitted Insurer.
Answer: An insurer that has a certificate of authority in a given state is
said to be an___________ insurer in that state.
●● Express, Implied, and Apparent Authority.
Answer: Express authority—The right to sign an application as an agent
for the insurer.
Implied authority—Using a computer program to identify insurance
needs and to recommend solutions.
Apparent authority—Advising the applicant to not disclose on the
application any important health facts that might reduce his or her
insurability.
●● Indemnity vs. Valued Contract.
Answer: Two forms of insurance contract. An indemnity contract bases
policy benefits on reimbursement of actual losses. A valued contract
bases benefits on a stated amount without regard for the value of the
loss.
●● Loss.
2026 QUESTIONS AND SOLUTIONS
VERIFIED ANSWERS GRADED A+
●● Underwriting vs. Actuarial Departments.
Answer: Two related insurance company functions. Through the process
of _________, applications are assessed for insurability and to assign
premium rates. The ________ department analyzes data to help estimate
future losses and to produce rate tables.
●● Managerial System vs. General Agency System.
Answer: Two variations of the career agency system in which producers
represent a single company. One is headed by a company employee
called a general manager (GM), the other by an independent contractor
called a general agent (GA).
●● Fraternal Insurance Company.
Answer: A non-profit form of insurance provider sponsored by an
organization of people who share a common ethnic, religious, or
vocational affiliation.
●● Peril and Hazard.
Answer: Two related general insurance terms:
,Peril is the immediate cause of a loss (and the event that is insured
against).
Hazard is any condition that increases the risk of incurring a loss.
●● Contract of adhesion.
Answer: A type of contract in which one party (the offeror) drafts the
terms that must be accepted as-is by the offeree. Insurance policies are
this type.
●● Mutual Insurance Company.
Answer: A form of insurance company that is owned by policyowners.
May distribute policy dividends (non-taxable) through participating
policies.
●● Independent Agency System.
Answer: An insurance distribution system in which the manager and
producers are fully independent and not affiliated with any single
insurer.
●● Buyer's Guide and Policy Summary.
Answer: Two related disclosure documents that are required by most
states to be presented to life and health insurance applicants at some
point during the buying process.
,●● Risk.
Answer: A basic insurance term referring to the possibility of incurring a
loss.
●● Law of Large Numbers.
Answer: A mathematical principle that is the basis for predicting the
odds of a loss occurring in a certain population in any given year.
●● Social Security (OASDI).
Answer: A federal insurance program that provides disability, death, and
retirement benefits to covered workers and their qualifying beneficiaries.
●● Agents vs. Brokers.
Answer: Two basic types of insurance producer: an ______ represents a
single insurer and a _____ sells policies from multiple insurers.
●● Reinsurance.
Answer: The process through which insurance companies spread large
risks among other insurers.
●● Domestic, Foreign, and Alien Insurers.
Answer: Insurers can be categorized by their state of domicile. There are
three categories, known as _____, _____, and _____.
, ●● Stock Insurance Company.
Answer: A form of insurance company that is owned by stockholders
who may or may not also be policyowners. May distribute stock
dividends (taxable).
●● Admitted Insurer.
Answer: An insurer that has a certificate of authority in a given state is
said to be an___________ insurer in that state.
●● Express, Implied, and Apparent Authority.
Answer: Express authority—The right to sign an application as an agent
for the insurer.
Implied authority—Using a computer program to identify insurance
needs and to recommend solutions.
Apparent authority—Advising the applicant to not disclose on the
application any important health facts that might reduce his or her
insurability.
●● Indemnity vs. Valued Contract.
Answer: Two forms of insurance contract. An indemnity contract bases
policy benefits on reimbursement of actual losses. A valued contract
bases benefits on a stated amount without regard for the value of the
loss.
●● Loss.
