ALU 202 CHAPTER 11 EXAM QUESTIONS WITH VERIFIED ANSWERS
LATEST UPDATE 2026
Sources of Legislation - Answers 3 Basic types: Unitary System, Confederation and
Major system
Unitary - Answers The power is concentrated at the national level with little power
being held in political subdivisions
Confederation - Answers The Union of equal states
Federal System - Answers Is the system where the national government holds the
power but the smaller political subdivisions have power as well. The US and Canada
are both Federal systems. Has two sources of legislation impacting life insurance the
Federal/Congress passes laws regarding insurance and the State enact legislations to
regulate the life insurance industry including licensing, solvency and market conduct.
Federalism - Answers Has been important in development of the laws impacting life
insurance in the US.
HIPPA - Answers Health Insurance Portability and Accountability Act 1996 was
designed to improve efficiency in healthcare by standardization of electronic data
interchange and provide secure measures to protect health information and it's
disclosure.
Consumer Reporting Act - Answers Regulates collection information in the
underwriting process. Has specific rules regarding notification, disclosure and
accuracy in the collection of personal information
The USA Patriot Act - Answers - it enhances the authority of the United States law
enforcement for the stated purpose of investigation and preempting potential terrorist
acts against the US.
Anti-Money Laundering programs - Answers The Patriot acts has specific definitions
of terrorism and regulations that must be met by an insurance company. The is
required to develop internal policies, procedures and controls, to have a designated
compliance officer, ongoing employee training program and independent audit
function to test the program.
Insurance Company to be defined as under the Patriot Act as - Answers the issuing,
underwriting or reinsuring of a life insurance policy. the issuing granting purchasing
or disposing of any annuity product. The issuing, underwriting, or reinsuring of any
LATEST UPDATE 2026
Sources of Legislation - Answers 3 Basic types: Unitary System, Confederation and
Major system
Unitary - Answers The power is concentrated at the national level with little power
being held in political subdivisions
Confederation - Answers The Union of equal states
Federal System - Answers Is the system where the national government holds the
power but the smaller political subdivisions have power as well. The US and Canada
are both Federal systems. Has two sources of legislation impacting life insurance the
Federal/Congress passes laws regarding insurance and the State enact legislations to
regulate the life insurance industry including licensing, solvency and market conduct.
Federalism - Answers Has been important in development of the laws impacting life
insurance in the US.
HIPPA - Answers Health Insurance Portability and Accountability Act 1996 was
designed to improve efficiency in healthcare by standardization of electronic data
interchange and provide secure measures to protect health information and it's
disclosure.
Consumer Reporting Act - Answers Regulates collection information in the
underwriting process. Has specific rules regarding notification, disclosure and
accuracy in the collection of personal information
The USA Patriot Act - Answers - it enhances the authority of the United States law
enforcement for the stated purpose of investigation and preempting potential terrorist
acts against the US.
Anti-Money Laundering programs - Answers The Patriot acts has specific definitions
of terrorism and regulations that must be met by an insurance company. The is
required to develop internal policies, procedures and controls, to have a designated
compliance officer, ongoing employee training program and independent audit
function to test the program.
Insurance Company to be defined as under the Patriot Act as - Answers the issuing,
underwriting or reinsuring of a life insurance policy. the issuing granting purchasing
or disposing of any annuity product. The issuing, underwriting, or reinsuring of any
