XCEL Final EXAM QUESTIONS AND ANSWERS 100% CORRECT!
When a mutual insurer becomes a stock company, the process is called - ANSWER Demutualization Which of the following is not a characteristic of reinsurance? - ANSWER Increases the unearned premium reserve A participating company is also referred to as which type of insurer? - ANSWER Mutual insurer Which of the following is NOT a benefit of insurance? - ANSWER Losses due to fraud are eliminated This is not accomplished with the purchase of an insurance policy - ANSWER Risk is eliminated A hazard can be best described as - ANSWER a condition that may increase the likelihood of a loss occurring Which of the following is a type of insurance where an insurer transfers loss exposures from policies written for its insureds? - ANSWER Reinsurance AAA Insurance Company has transferred a portion of its loss exposure to BBB Insurance Company. In this reinsurance transaction, what is AAA Insurance Company called? - ANSWER Primary insurer Which type of risk is gambling? - ANSWER Speculative risk Which of the following describes the increase in the probability of a loss due to an insured's dishonest tendencies? - ANSWER Moral hazard Which of the following is any situation that presents the possibility of a loss? - ANSWER Loss exposure Which of the following is considered to be any situation that has the potential for loss? - ANSWER Loss exposure
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