CENTRAL INSURANCE SCHOOL EXAM|UPDATED&VERIFIED|100% SOLVED|GUARANTEED SUCCESS

The owner of a camera store is worried that her new employees may help themselves to items from inventory without paying for them. What kind of hazard is described? A. Physical hazard B. Ethical hazard C. Morale hazard D. Moral hazard moral hazard Which of the following statements is correct? A. Only speculative risks are insurable B. Only pure risks are insurable C. Both pure risks and speculative risks are insurable. D. Neither pure risks nor speculative risks are insurable Only pure risks are insurable. Buying insurance is one of the most effective ways of A. avoiding risk B. transferring risk C. reducing risk D. retaining risk Transferring risk Which of the following best describes the function of insurance? A. It is a form of legalized gambling B. It spreads financial risk over a large group to minimize the loss to any one individual C. It protects against living too long. D. It creates and protects the risk It spreads financial risk over a large group to minimize the loss to any one individual Tom buys his wife Mary a $50,000 diamond ring. When she is not wearing the ring, she keeps it in a safe deposit box at a local bank, This is an example of risk A. avoidance B. reduction C. retention D. transference Reduction An insurance company organized and headquartered in Florida can be described as what type of company in Florida? A. Alien B. Home-based C. Foreign D. Domestic Domestic Which of the following statements regarding types of insurers is NOT correct? A. Reinsurers usually deal with policy owners. B. Mutual insurance companies are "owned" by their policy owners C. Stock insurance companies seek a profit for their shareholderS D. Fraternal benefit societies must be nonprofit A. Reinsurers usually deal with policy owners In an insurance transaction, licensed agents legally represent which of the following? A. Insurer B. Applicant and insured C. State office of insurance regulation D. Themselves A. Insurer In Florida, properly licensed and appointed agents may act as brokers in insurance transactions, in which case they may legally represent A. The insurer B. The applicant and insured C. The state office of insurance regulation D. Themselves B. The applicant and insured A life insurance company organized in Illinois, with its home office in Philadelphia, is licensed to conduct business in Florida. In Florida: this company is classified as A. A domestic company B. An alien company C. A foreign company D. A regional company C. A foreign company A reinsurer is a company that A. Accepts all the risk from another insurer B. Assumes a portion of the risk from another insurer C. Cedes the risk D. Does not take any risk B. Assumes a portion of the risk from another insurer In addition to the state, the organization that regulates variable life and variable annuities is the A. Federal Trade Commission (FTC) B. National Association of Insurance Commissioners (NAIC) C. Securities and Exchange Commission (SEC) D. Federal Communications Commission (FCC) C. SEC