LOMA 281 Exam Questions and Answers
100% Solved | Graded A+
waiver of premium for payor benefit - ✔✔insurer waives renewal premiums
if the policy owner, rather than the insured, dies or becomes totally disabled
(must provide evidence of insurability)
Contracts of Indemnity - ✔✔base benefits on the actual amount of the
financial loss that results from a covered event when it occurs, subject to
maximum limits (other than life insurance)
Valued Contract - ✔✔life insurance policies which state the benefit payable
at the time of the policy issue
Retrocessionaire - ✔✔The reinsurer that assumes all or part of the
reinsurance risk accepted by another reinsurer
Stock Insurer - ✔✔- can issue shares of stock
- owned by stockholders, who have voting rights in the company
- stockholders may receive shares of operating profits known as stock
dividends
Mutual Insurer - ✔✔- owned by policyowners
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,- policyowners have membership rights (voting rights)
- policyowners may periodically receive an amount of money known as a
policy dividend
Fraternal Benefit Society - ✔✔- owned by members of fraternal lodge
system
- provides social and insurance benefits only to fraternal members of their
families
- legally required to have a representative form of government
Solvency Regulation - ✔✔-assets must be sufficient to offset liabilities
-calculation of reserves
-premium to surplus ratio
-investment types and quality
-annual statement must be filed
-guaranty funds
Market Conduct Regulation - ✔✔Regulation of the practices of insurers in
regard to four areas of operation: sales practices, underwriting practices,
claims practices, and bad-faith actions.
McCarran-Ferguson Act - ✔✔states that while the federal government has
authority to regulate the insurance industry, it would not exercise its right if
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©JOSHCLAY 2024/2025. YEAR PUBLISHED 2024.
, the insurance industry was regulated effectively and adequately on the
state level.
Dodd-Frank Act - ✔✔Created the Federal Insurance Office (FIO) with
authority to monitor the insurance industry
The Life and Health Insurance Guaranty Association - ✔✔State's
association covers the company's benefits up to state-mandated
maximums (usually up to $300k) should the insurance company go
insolvent
Unilateral Contract - ✔✔contract in which only one party makes a legally
enforceable promise when entering into the contract
Bilateral Contract - ✔✔Both parties make legally enforceable promises
Commutative contract - ✔✔parties agree to exchange specified items or
services that are equal in value
Aleatory contract - ✔✔one party exchanges something of value for the
other party's conditional promise
Bargaining Contract - ✔✔both parties set the terms and conditions
Contracts of Adhesion - ✔✔one party sets the contract terms that the other
party must accept or reject outright
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©JOSHCLAY 2024/2025. YEAR PUBLISHED 2024.
100% Solved | Graded A+
waiver of premium for payor benefit - ✔✔insurer waives renewal premiums
if the policy owner, rather than the insured, dies or becomes totally disabled
(must provide evidence of insurability)
Contracts of Indemnity - ✔✔base benefits on the actual amount of the
financial loss that results from a covered event when it occurs, subject to
maximum limits (other than life insurance)
Valued Contract - ✔✔life insurance policies which state the benefit payable
at the time of the policy issue
Retrocessionaire - ✔✔The reinsurer that assumes all or part of the
reinsurance risk accepted by another reinsurer
Stock Insurer - ✔✔- can issue shares of stock
- owned by stockholders, who have voting rights in the company
- stockholders may receive shares of operating profits known as stock
dividends
Mutual Insurer - ✔✔- owned by policyowners
1
©JOSHCLAY 2024/2025. YEAR PUBLISHED 2024.
,- policyowners have membership rights (voting rights)
- policyowners may periodically receive an amount of money known as a
policy dividend
Fraternal Benefit Society - ✔✔- owned by members of fraternal lodge
system
- provides social and insurance benefits only to fraternal members of their
families
- legally required to have a representative form of government
Solvency Regulation - ✔✔-assets must be sufficient to offset liabilities
-calculation of reserves
-premium to surplus ratio
-investment types and quality
-annual statement must be filed
-guaranty funds
Market Conduct Regulation - ✔✔Regulation of the practices of insurers in
regard to four areas of operation: sales practices, underwriting practices,
claims practices, and bad-faith actions.
McCarran-Ferguson Act - ✔✔states that while the federal government has
authority to regulate the insurance industry, it would not exercise its right if
2
©JOSHCLAY 2024/2025. YEAR PUBLISHED 2024.
, the insurance industry was regulated effectively and adequately on the
state level.
Dodd-Frank Act - ✔✔Created the Federal Insurance Office (FIO) with
authority to monitor the insurance industry
The Life and Health Insurance Guaranty Association - ✔✔State's
association covers the company's benefits up to state-mandated
maximums (usually up to $300k) should the insurance company go
insolvent
Unilateral Contract - ✔✔contract in which only one party makes a legally
enforceable promise when entering into the contract
Bilateral Contract - ✔✔Both parties make legally enforceable promises
Commutative contract - ✔✔parties agree to exchange specified items or
services that are equal in value
Aleatory contract - ✔✔one party exchanges something of value for the
other party's conditional promise
Bargaining Contract - ✔✔both parties set the terms and conditions
Contracts of Adhesion - ✔✔one party sets the contract terms that the other
party must accept or reject outright
3
©JOSHCLAY 2024/2025. YEAR PUBLISHED 2024.
