Michigan Property & Casualty Exam Questions with Complete Solutions (Tested and Verified)

FIO Correct Answer (Federal Insurance Office) Monitors insurance industry and identifies issues and gaps in the state regulation of insurers. It also monitors access to affordable insurance by underserved communities and consumers. Insurance Regulation at State Level Correct Answer Insurance industry is regulated primarily at the state level. Legislature writes and passes laws, judicial branch interprets them. Surplus and Excess Insurance Correct Answer Insurance available when coverage cannot be obtained from admitted insurers. Cannot be solely utilized to receive lower cost coverage than would be available from an admitted carrier. Private vs Government Insurers Correct Answer Most insurance is written through private insurers, however there are instances where government provides an alternative, usually when there is a lot of risk involved and private insurers have no means to insure. (Gulf Coast) Residual Markets Correct Answer A private coverage source of last resort for businesses and individuals who have been rejected by voluntary market insurers. Insurance Agents/Producers Correct Answer Licensed individuals representing an insurance company when transacting insurance. Reinsurance Companies Correct Answer Insurance company that assumes all or a portion of a risk from a primary or ceding insurance company. Treaty Agreements Correct Answer Reinsurance agreement that covers all risks contained in the subject line(s) of business automatically. Insurers Correct Answer Manufacture and sell insurance coverage by way of insurance policies or contracts. Facultative Agreements Correct Answer Reinsurance agreements that allow ceding and reinsurance companies the opportunity to negotiate coverage for individual risks. Financial Rating Services Correct Answer Independent financial rating services evaluate and rate the financial stability of insurance companies. Assign ratings to show financial strength/weakness.