OHIO HEALTH AND LIFE INSURANCE
CERTIFICATION EXAM 2026/2027 – FULLY
SOLVED 100% CORRECT ANSWERS EDITION.
◎ Indemnify. ANSWER:- To make one whole by restoring them to the same financial
position that existed before the loss
◎ Pure risk. ANSWER:- There is only a chance of loss and there is no possibility for
gain (insurable)
◎ Speculative risk. ANSWER:- Uncertainty of loss or gain: these risks are undertaken
voluntarily (ex: stock market)
◎ Peril. ANSWER:- The immediate specific event causing loss
◎ Moral hazard. ANSWER:- Arise from peoples habits and values (ex: filing a false
claim)
◎ Morale hazard. ANSWER:- Arise from human carelessness (ex: failing to take safety
precautions)
◎ STARR. ANSWER:- Methods for dealing with risk: Sharing, Transfer, Avoidance,
Reduction, Retention
◎ Insurable interest. ANSWER:- An individual must have a legitimate interest in the
preservation of the life of the property insured
◎ Subrogation. ANSWER:- A clause in the insurance policy that gives the insurer the
right to sue the party responsible for the loss (not used in life insurance)
◎ Face amount. ANSWER:- Maximum amount of liability of the insurer
◎ Elimination period. ANSWER:- The "deductible" for disability insurance; the number
of days a person must be disabled before benefits become payable
◎ Coinsurance. ANSWER:- The insurer and insured share allowable expenses
◎ Life insurance. ANSWER:- Insurance coverage on human lives including
endowments and annuities. May also include benefits for accidental death,
dismemberment, or diability
,◎ Variable products. ANSWER:- These carry investment risk- the insured may lose
money because of a decrease in the price of securities underlying the product. The SEC
and state insurance departments regulate variable contracts
◎ Credit. ANSWER:- A limited line of insurance protecting the insured against financial
consequences should a debtor be unable to pay due to illness/ death
◎ Stock insurance company. ANSWER:- Non- participating company because its
policyholders do not participate in dividends
◎ Mutual insurers. ANSWER:- Participating company because ownership rests with the
policyholders who are paid policy dividends of funds not paid out in claims and
operating costs
◎ Reciprocal insurers. ANSWER:- Unincorporated groups of people that provide
insurance for one another through indemnity agreements. Each individual is known as a
subscriber and accounts are overseen by an attorney-in-fact
◎ Fraternal benefit societies. ANSWER:- Life insurance carriers that exist as social
organizations. They have open contracts, which allow for additional, unscheduled
premium charges in times of financial difficulty
◎ Lloyds of London. ANSWER:- A meeting place for members who transact insurance
and are individually liable for contracts they enter
◎ Reinsurers. ANSWER:- Insurers for insurers. The company that is transferring the
risk is called the ceding company
◎ Faculative reinsurer. ANSWER:- Negotiate on an individual risk basis. The reinsurer
can accept or reject each risk
◎ Treaty reinsurer. ANSWER:- Automatic sharing of risks by the ceding company
◎ Excess and surplus lines. ANSWER:- Risks that are difficult to insure in the normal
marketplace are attempted to be places in unauthorized carriers
◎ Risk retention groups. ANSWER:- Spread liability among its members (only liability
insurance)
◎ Self- insurance. ANSWER:- Set aside reserve funds to cover loss and purchase
excess insurance to cover large losses above a given level
◎ Insurers domicile. ANSWER:- Classification: domestic, foreign, alien
, ◎ General agents / MGA's. ANSWER:- Hire, train and supervise agents within a
specific geographic area. They are compensated with commission they earn as well as
an overriding commission on the business produced by agents they manage
◎ Direct writing companies. ANSWER:- Pay salaries to people to sell insurance
(usually not paid commission). The company owns all business produced
◎ Direct response marketing. ANSWER:- TV, mail, magazines,...
◎ Franchise marketing. ANSWER:- Coverage to employees of small firms
(individualized policies)
◎ Producers. ANSWER:- May function as agents or brokers. Life and health producers
are authorized to solicit, receive and forward applications for the contracts written by
their companies. They may receive the first premium but may not bind coverage.
(Property and casualty producers may bind an insurance company to an oral/ written
agreement)
◎ Broker. ANSWER:- Represents a buyer to an insurer
◎ Solicitor. ANSWER:- A salesperson who works for an agent or broker
◎ Federal regulations. ANSWER:- Means of overseeing areas not covered by state
regulation
◎ Paul v Virginia. ANSWER:- The transaction of insurance across state lines is not
interstate commerce and therefore should be regulated by local law
◎ South- Eastern Underwriters Decision. ANSWER:- The SEUA supreme court
overturned Paul v Virginia and made these transactions interstate commerce
◎ McCarran-Ferguson Act. ANSWER:- Federal government can regulate insurance to
the extent that it is not regulated by state law. This exempt the insurance industry from
many anti-trust laws
◎ Notice to applicant. ANSWER:- Informs one that a report will be ordered concerning
their past credit history
◎ Consumer reporting agencies. ANSWER:- Write reports on ones credit, character,
reputation, or habits (can be investigative). They may be for profit (equifax) or non-profit
(credit union)
◎ Pretext interview. ANSWER:- An interview where someone pretends to be someone
else to obtain information, misrepresents the true purpose of the interview, or refuses to
CERTIFICATION EXAM 2026/2027 – FULLY
SOLVED 100% CORRECT ANSWERS EDITION.
◎ Indemnify. ANSWER:- To make one whole by restoring them to the same financial
position that existed before the loss
◎ Pure risk. ANSWER:- There is only a chance of loss and there is no possibility for
gain (insurable)
◎ Speculative risk. ANSWER:- Uncertainty of loss or gain: these risks are undertaken
voluntarily (ex: stock market)
◎ Peril. ANSWER:- The immediate specific event causing loss
◎ Moral hazard. ANSWER:- Arise from peoples habits and values (ex: filing a false
claim)
◎ Morale hazard. ANSWER:- Arise from human carelessness (ex: failing to take safety
precautions)
◎ STARR. ANSWER:- Methods for dealing with risk: Sharing, Transfer, Avoidance,
Reduction, Retention
◎ Insurable interest. ANSWER:- An individual must have a legitimate interest in the
preservation of the life of the property insured
◎ Subrogation. ANSWER:- A clause in the insurance policy that gives the insurer the
right to sue the party responsible for the loss (not used in life insurance)
◎ Face amount. ANSWER:- Maximum amount of liability of the insurer
◎ Elimination period. ANSWER:- The "deductible" for disability insurance; the number
of days a person must be disabled before benefits become payable
◎ Coinsurance. ANSWER:- The insurer and insured share allowable expenses
◎ Life insurance. ANSWER:- Insurance coverage on human lives including
endowments and annuities. May also include benefits for accidental death,
dismemberment, or diability
,◎ Variable products. ANSWER:- These carry investment risk- the insured may lose
money because of a decrease in the price of securities underlying the product. The SEC
and state insurance departments regulate variable contracts
◎ Credit. ANSWER:- A limited line of insurance protecting the insured against financial
consequences should a debtor be unable to pay due to illness/ death
◎ Stock insurance company. ANSWER:- Non- participating company because its
policyholders do not participate in dividends
◎ Mutual insurers. ANSWER:- Participating company because ownership rests with the
policyholders who are paid policy dividends of funds not paid out in claims and
operating costs
◎ Reciprocal insurers. ANSWER:- Unincorporated groups of people that provide
insurance for one another through indemnity agreements. Each individual is known as a
subscriber and accounts are overseen by an attorney-in-fact
◎ Fraternal benefit societies. ANSWER:- Life insurance carriers that exist as social
organizations. They have open contracts, which allow for additional, unscheduled
premium charges in times of financial difficulty
◎ Lloyds of London. ANSWER:- A meeting place for members who transact insurance
and are individually liable for contracts they enter
◎ Reinsurers. ANSWER:- Insurers for insurers. The company that is transferring the
risk is called the ceding company
◎ Faculative reinsurer. ANSWER:- Negotiate on an individual risk basis. The reinsurer
can accept or reject each risk
◎ Treaty reinsurer. ANSWER:- Automatic sharing of risks by the ceding company
◎ Excess and surplus lines. ANSWER:- Risks that are difficult to insure in the normal
marketplace are attempted to be places in unauthorized carriers
◎ Risk retention groups. ANSWER:- Spread liability among its members (only liability
insurance)
◎ Self- insurance. ANSWER:- Set aside reserve funds to cover loss and purchase
excess insurance to cover large losses above a given level
◎ Insurers domicile. ANSWER:- Classification: domestic, foreign, alien
, ◎ General agents / MGA's. ANSWER:- Hire, train and supervise agents within a
specific geographic area. They are compensated with commission they earn as well as
an overriding commission on the business produced by agents they manage
◎ Direct writing companies. ANSWER:- Pay salaries to people to sell insurance
(usually not paid commission). The company owns all business produced
◎ Direct response marketing. ANSWER:- TV, mail, magazines,...
◎ Franchise marketing. ANSWER:- Coverage to employees of small firms
(individualized policies)
◎ Producers. ANSWER:- May function as agents or brokers. Life and health producers
are authorized to solicit, receive and forward applications for the contracts written by
their companies. They may receive the first premium but may not bind coverage.
(Property and casualty producers may bind an insurance company to an oral/ written
agreement)
◎ Broker. ANSWER:- Represents a buyer to an insurer
◎ Solicitor. ANSWER:- A salesperson who works for an agent or broker
◎ Federal regulations. ANSWER:- Means of overseeing areas not covered by state
regulation
◎ Paul v Virginia. ANSWER:- The transaction of insurance across state lines is not
interstate commerce and therefore should be regulated by local law
◎ South- Eastern Underwriters Decision. ANSWER:- The SEUA supreme court
overturned Paul v Virginia and made these transactions interstate commerce
◎ McCarran-Ferguson Act. ANSWER:- Federal government can regulate insurance to
the extent that it is not regulated by state law. This exempt the insurance industry from
many anti-trust laws
◎ Notice to applicant. ANSWER:- Informs one that a report will be ordered concerning
their past credit history
◎ Consumer reporting agencies. ANSWER:- Write reports on ones credit, character,
reputation, or habits (can be investigative). They may be for profit (equifax) or non-profit
(credit union)
◎ Pretext interview. ANSWER:- An interview where someone pretends to be someone
else to obtain information, misrepresents the true purpose of the interview, or refuses to
