2024 /2025 | © copyright | This work may not be copied for profit gain Excel!
Wisconsin Life Insurance Course Questions
and Correct Answers | Latest Update
Stock Companies
✓ -:- -private organization focused to make profits for shareholders
✓ -Stock dividends are paid to stock holders
✓ -policyholders do not participate
Mutual Companies
✓ -:- -have no stock holders
-owners are policy owners
-policy holders can vote for members of the board
-policy owners receive dividends
Lloyd's of London
✓ -:- -A syndicate of individuals who underwrite insurance
Reinsurers
✓ -:- -are a specialized branch of the insurance industry because they
insure insurers
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,2024 /2025 | © copyright | This work may not be copied for profit gain Excel!
-
reinsure risk to lessen it if a large claim would be made
1945 McCarren-Ferguson Act
✓ -:- Insurance would be regulated by the states but would conform to
federal anti trust laws
1970 Fair Credit Reporting Act
✓ -:- which is the authority that requires fair and accurate reporting of
information about consumers, including applicaitons for insurance.
Insurers must inform applicants about any investigations that are being
made
NAIC
✓ -:- All State insurance commisioners or directos are members
Broad objectives
1. To encourage uniformity in state insurance laws and regulations
2. To assist in the administration of those laws and regulations by promoting efficiency
3. To protect the interest of policy owners and consumers
4. To preserve state regulations of the insurance business
2 | P a g e | G r a d e A + | 2 0 0 2 5
,2024 /2025 | © copyright | This work may not be copied for profit gain Excel!
State Guaranty Association
✓ -:- -state established guaranty funds or guaranty a ssociations to support
insurers and protect consumers
-should an insurer be unable to pay its claims the association will step in and cover the
consumers unpaid claims
AM Best
✓ -:- A+
Standard and Poors or Moodys
✓ -:- AA-
Fitch
✓ -:- A1
Law of Large Numbers
✓ -:- This law states that larger groups provide an increased degree of
accuracy in loss predictions, based on past experience.
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, 2024 /2025 | © copyright | This work may not be copied for profit gain Excel!
Speculative Risk
✓ -:- is a risk that presents the chance for loss and a gain
ex. Gambling
Pure Risk
✓ -:- are the only insurable risks and present a potential for loss only with
no possibility of gain
ex. death
Avoidance
✓ -:- elimination of the hazard
Reduction
✓ -:- minimizing the severity of a potential loss
Retention
✓ -:- self insure, used when losses are highly predictable and the worst
loss is not serious
4 | P a g e | G r a d e A + | 2 0 0 2 5
Wisconsin Life Insurance Course Questions
and Correct Answers | Latest Update
Stock Companies
✓ -:- -private organization focused to make profits for shareholders
✓ -Stock dividends are paid to stock holders
✓ -policyholders do not participate
Mutual Companies
✓ -:- -have no stock holders
-owners are policy owners
-policy holders can vote for members of the board
-policy owners receive dividends
Lloyd's of London
✓ -:- -A syndicate of individuals who underwrite insurance
Reinsurers
✓ -:- -are a specialized branch of the insurance industry because they
insure insurers
1 | P a g e | G r a d e A + | 2 0 0 2 5
,2024 /2025 | © copyright | This work may not be copied for profit gain Excel!
-
reinsure risk to lessen it if a large claim would be made
1945 McCarren-Ferguson Act
✓ -:- Insurance would be regulated by the states but would conform to
federal anti trust laws
1970 Fair Credit Reporting Act
✓ -:- which is the authority that requires fair and accurate reporting of
information about consumers, including applicaitons for insurance.
Insurers must inform applicants about any investigations that are being
made
NAIC
✓ -:- All State insurance commisioners or directos are members
Broad objectives
1. To encourage uniformity in state insurance laws and regulations
2. To assist in the administration of those laws and regulations by promoting efficiency
3. To protect the interest of policy owners and consumers
4. To preserve state regulations of the insurance business
2 | P a g e | G r a d e A + | 2 0 0 2 5
,2024 /2025 | © copyright | This work may not be copied for profit gain Excel!
State Guaranty Association
✓ -:- -state established guaranty funds or guaranty a ssociations to support
insurers and protect consumers
-should an insurer be unable to pay its claims the association will step in and cover the
consumers unpaid claims
AM Best
✓ -:- A+
Standard and Poors or Moodys
✓ -:- AA-
Fitch
✓ -:- A1
Law of Large Numbers
✓ -:- This law states that larger groups provide an increased degree of
accuracy in loss predictions, based on past experience.
3 | P a g e | G r a d e A + | 2 0 0 2 5
, 2024 /2025 | © copyright | This work may not be copied for profit gain Excel!
Speculative Risk
✓ -:- is a risk that presents the chance for loss and a gain
ex. Gambling
Pure Risk
✓ -:- are the only insurable risks and present a potential for loss only with
no possibility of gain
ex. death
Avoidance
✓ -:- elimination of the hazard
Reduction
✓ -:- minimizing the severity of a potential loss
Retention
✓ -:- self insure, used when losses are highly predictable and the worst
loss is not serious
4 | P a g e | G r a d e A + | 2 0 0 2 5
