LOMA 280 COMPREHENSIVE ASSESSMENT
2026 SOLVED QUESTIONS SOLUTIONS
GRADED A+
◉ Solvent
Answer: Able to meet and pay debts and policy benefits when they
come due
◉ How to calculate solvency
Answer: Liabilities + assets = equity
◉ 2 components of stock insurance equity
Answer: Capital-money owners invested in insurer through the
purchase of stock
Surplus-the amount of equity that exceeds the capital
◉ Annual statement
Answer: Accounting report insurer prepares each year and files with
the insurance department in each state that it does business in.
◉ On site auditing
Answer: Insurance companies have one every 3-5 years
,◉ Stock insurance accounting equation
Answer: Liabilities + owners equity (capital + surplus) = assets
◉ Mutual insurance accounting equation
Answer: Liabilities + owners equity (surplus) = assets
◉ Market conduct laws
Answer: Regulate how insurance companies do business
◉ Social insurance program
Answer: Welfare plan established by law and administered by a
government
Provides population with income security
Provides payments to replace income lost because of age, disability,
death,injury, and unemployment
Also provides medical care
◉ Contract
Answer: Legally enforceable agreement between parties
◉ Valid contract
, Answer: Enforceable because it satisfies legal requirements
◉ Void contract
Answer: Does not meet legal requirements and is not enforceable
◉ Voidable contract
Answer: One party has the right to avoid obligations and another is
bound
◉ Formal contract
Answer: (Aka contract under seal) enforceable because parties met
certain formalities concerning the form of agreement
◉ Informal contract
Answer: Parties met requirements concerning substance of
agreement rather than form
◉ 4 requirements for an informal contract
Answer: 1. Parties express mutual assent to terms
2. Parties exchange legally adequate consideration
3. Contract is for a lawful purpose
4. Parties have contractual capacity
2026 SOLVED QUESTIONS SOLUTIONS
GRADED A+
◉ Solvent
Answer: Able to meet and pay debts and policy benefits when they
come due
◉ How to calculate solvency
Answer: Liabilities + assets = equity
◉ 2 components of stock insurance equity
Answer: Capital-money owners invested in insurer through the
purchase of stock
Surplus-the amount of equity that exceeds the capital
◉ Annual statement
Answer: Accounting report insurer prepares each year and files with
the insurance department in each state that it does business in.
◉ On site auditing
Answer: Insurance companies have one every 3-5 years
,◉ Stock insurance accounting equation
Answer: Liabilities + owners equity (capital + surplus) = assets
◉ Mutual insurance accounting equation
Answer: Liabilities + owners equity (surplus) = assets
◉ Market conduct laws
Answer: Regulate how insurance companies do business
◉ Social insurance program
Answer: Welfare plan established by law and administered by a
government
Provides population with income security
Provides payments to replace income lost because of age, disability,
death,injury, and unemployment
Also provides medical care
◉ Contract
Answer: Legally enforceable agreement between parties
◉ Valid contract
, Answer: Enforceable because it satisfies legal requirements
◉ Void contract
Answer: Does not meet legal requirements and is not enforceable
◉ Voidable contract
Answer: One party has the right to avoid obligations and another is
bound
◉ Formal contract
Answer: (Aka contract under seal) enforceable because parties met
certain formalities concerning the form of agreement
◉ Informal contract
Answer: Parties met requirements concerning substance of
agreement rather than form
◉ 4 requirements for an informal contract
Answer: 1. Parties express mutual assent to terms
2. Parties exchange legally adequate consideration
3. Contract is for a lawful purpose
4. Parties have contractual capacity
