Mass State Life Insurance Exam | Questions & Answers (Verified) | Latest Update | Graded A+

MASS STATE LIFE INSURANCE EXAM | QUESTIONS & ANSWERS (VERIFIED) | LATEST UPDATE | GRADED A+ Which of the following describes a participating life insurance policy? Correct Answer: A participating life policy is one in which the policyowner receives dividends deriving from the company's divisible surplus What type of reinsurance contract between two insurers involves an automatic sharing of the risks assumed? Correct Answer: Under treaty reinsurance, each party automatically accepts specific percentages of the insurer's business. At what point must a life insurance applicant be informed of their rights that fall under the Fair Credit Reporting Act? Correct Answer: Upon completion of the application The State Guaranty Association guarantees Correct Answer: that a claim will be paid if an admitted insurer becomes insolvent 2 Dividends from a mutual insurance company are paid to whom? Correct Answer: Policyholders What is considered the accounting measurement of an insurance company's future obligations to its policyowners? Correct Answer: reserves A group-owned insurance company that is formed to assume and spread the liability risks of its members is known as a Correct Answer: risk retention group Which of the following is a syndicate established by a group of insurers to share underwriting duties? Correct Answer: Lloyd's organization An agent's authority to bind an insurer to an insurance contract may be granted in the Correct Answer: agent's contract and the insurance company's appointment Dividends from a stock insurance company are normally sent to Correct Answer: shareholders Law of Large numbers 3 Correct Answer: -insurance is based on the sharing of risks among a large group of peopl