ALABAMA LIFE INSURANCE EXAM 2024 WITH 100% CORRECT ANSWERS

ALABAMA LIFE INSURANCE EXAM 2024 WITH 100% CORRECT ANSWERS What are commercial insurers also referred to as? - ANSWERS Private Insurance Companies Commercial Insurers are in the business of selling insurance for ___ ________. - ANSWERS a profit What two groups can commercial insurance be broken into? - ANSWERS Stock Companies & Mutual Insurers What is a stock insurer? - ANSWERS incorporated to make a profit for its stockholders. nonparticipating because the policyholders do not receive dividends unless they are stockholders. dividends are subject to taxation. Which type of commercial insurer is nonparticipating? - ANSWERS stock companies Which type of commercial insurer is participating? - ANSWERS mutual insurers what is a mutual insurer? - ANSWERS owned by policyholders. participating policies because policyholders get to participate in receiving dividends and electing directors. dividends are not subject to taxation unless they collect interest. Are dividends subject to taxation in a NONPAR company? - ANSWERS Yes Are dividends subject to taxation in a PAR company? - ANSWERS No; only the interest, if collected, is taxable If a company operates as both PAR and NONPAR what is it called ? - ANSWERS a Mixed Insurer Are dividends guaranteed? - ANSWERS Never An insurer selling more than one type of insurance is called a? - ANSWERS Multi-Line Insurer Strong Assessment Mutual Companies are classified by: - ANSWERS the way that they charge premiums What type of mutual company operates on a loss-sharing basis, where each member is assessed a portion of losses? - ANSWERS Pure Assessment Company What type of mutual company charges a premium at the beginning to cover losses, and returns a surplus, or levies additional amounts to meet expenses and losses? - ANSWERS Advance Premium Assessment Company What are fraternal benefit societies? - ANSWERS special types of mutual companies that are non-profit religious, ethnic, or charitable organizations. Who would a fraternal benefit society supply insurance to? - ANSWERS Only its members What are risk retention groups? - ANSWERS mutual companies formed by groups of people with the same profession or industry What are reciprocal insurers? - ANSWERS unincorporated groups of people providing insurance for one another through individual indemnity agreements. Each individual who is a member of the reciprocal is known as a subscriber. what is an indemnity contract? - ANSWERS It is a contract involving two parties in which the first party agrees to indemnify and reimburse the second party for covered debts or losses should they take pla