Massachusetts Life and Health
Insurance Exam Questions And Actual
Answers.
Insurance - Answer Transfer of Risk
Risk - Answer Uncertainty/ Possibility of Loss
Exposure - Answer Risks for which the insurance company would be liable
Peril - Answer Cause of Loss
Hazard - Answer Something that causes an increase in the chance of loss
Physical Hazard - Answer Hazard that can be seen
Moral Hazard - Answer A belief that intentionally causing a loss is acceptable
Morale Hazard - Answer Carelessness
STARR - Answer Method of handling risk
S- Method of handling risks - Answer Sharing
T- Method of handling risk - Answer Transfer
A- Method of handling risk - Answer Avoidance
,R- Method of handling risk - Answer Retention
R- Method of handling risk - Answer Reduction
Contract Policy - Answer An agreement between the insured and the insurer
Law of Large Numbers - Answer The larger the group, the more accurate losses can be predicted
CANHAM Risks - Answer Can be insured with the following characteristics
C- CANHAM Risks - Answer Calculable
A- CANHAM Risks - Answer Affordable
N- CANHAM Risks - Answer Non- Catastrophic
H- CANHAM Risks - Answer Homogeneous
A- CANHAM Risks - Answer Accidental
M- CANHAM Risks - Answer Measurable
Adverse Selection - Answer risks that have a greater than average chance of loss
Reinsurance- - Answer An insurance company sells some of its risk to other insurance companies.
Facultative Reinsurance - Answer the reinsurer evaluates each risk before allowing the transfer
,Treaty Reinsurance - Answer the reinsurer accepts the transfer according to an agreement called a
treaty
Stock Insurer - Answer An insurer that is owned by its stockholders and formed as a corporation for the
purpose of earning a profit for the stockholders.- Issues Non Par Policies
Mutual Insurer - Answer An insurer that is owned by its policyholders and formed as a corporation for
the purpose of providing insurance to them.- Non Taxable dividends & Participating Polcies
Fraternal Insurer - Answer provides insurance and other benefits
must be a member of the society to get the benefits
Reciprocal Insurers - Answer unincorporated groups of people that provide insurance for one another
through individual indemnity agreements
Llyod's Associations - Answer Organizations that provide support facilities for underwriters or groups of
individuals that accept insurance risk.
Risk Retention Group - Answer A liability insurance company owned by its members, which are
exposed to similar liability risks by virtue of being in the same business or industry.
Risk Purchasing Groups - Answer Groups of people with similar insurance needs who form an
organization to buy insurance as a group.
Self-insurance - Answer a business that pays its own claims
Residual Market - Answer insurance from the state or federal government
Insurance Company Locations - Answer Domestic, Foreign, and Alien
Certificate of Authority - Answer state license for an insurance company
, Admitted or Authorized - Answer state requires the insurance company to have a certificate of
authority
Non-admitted - Answer unauthorized-insurance company not required to have a Certificate of
Authority from the state
Surplus Lines - Answer any type of insurance for which there is no available market within the state,
and the coverage must be placed with a non admitted insurer
Methods of Marketing - Answer - Independent
- Exclusive or captive
- General agents or managing general agents
- direct writing companies
Agency - Answer The insurance agent acts on behalf of principal (Insurance Company)
Agent Authority - Answer express, implied, apparent
Fiduciary Trust - Answer - Promptly sends premiums to insurer
- Has knowledge of products
- Complies with laws and regulations
- Does not commingle funds
Legal Contract - Answer Consideration, Legal Purpose, Offer (Made by Insured), Acceptance,
Competent Parties
Adhesion - Answer Policy written by the insurance company
aleatory - Answer not equal value - small premium for a large amount of coverage
Insurance Exam Questions And Actual
Answers.
Insurance - Answer Transfer of Risk
Risk - Answer Uncertainty/ Possibility of Loss
Exposure - Answer Risks for which the insurance company would be liable
Peril - Answer Cause of Loss
Hazard - Answer Something that causes an increase in the chance of loss
Physical Hazard - Answer Hazard that can be seen
Moral Hazard - Answer A belief that intentionally causing a loss is acceptable
Morale Hazard - Answer Carelessness
STARR - Answer Method of handling risk
S- Method of handling risks - Answer Sharing
T- Method of handling risk - Answer Transfer
A- Method of handling risk - Answer Avoidance
,R- Method of handling risk - Answer Retention
R- Method of handling risk - Answer Reduction
Contract Policy - Answer An agreement between the insured and the insurer
Law of Large Numbers - Answer The larger the group, the more accurate losses can be predicted
CANHAM Risks - Answer Can be insured with the following characteristics
C- CANHAM Risks - Answer Calculable
A- CANHAM Risks - Answer Affordable
N- CANHAM Risks - Answer Non- Catastrophic
H- CANHAM Risks - Answer Homogeneous
A- CANHAM Risks - Answer Accidental
M- CANHAM Risks - Answer Measurable
Adverse Selection - Answer risks that have a greater than average chance of loss
Reinsurance- - Answer An insurance company sells some of its risk to other insurance companies.
Facultative Reinsurance - Answer the reinsurer evaluates each risk before allowing the transfer
,Treaty Reinsurance - Answer the reinsurer accepts the transfer according to an agreement called a
treaty
Stock Insurer - Answer An insurer that is owned by its stockholders and formed as a corporation for the
purpose of earning a profit for the stockholders.- Issues Non Par Policies
Mutual Insurer - Answer An insurer that is owned by its policyholders and formed as a corporation for
the purpose of providing insurance to them.- Non Taxable dividends & Participating Polcies
Fraternal Insurer - Answer provides insurance and other benefits
must be a member of the society to get the benefits
Reciprocal Insurers - Answer unincorporated groups of people that provide insurance for one another
through individual indemnity agreements
Llyod's Associations - Answer Organizations that provide support facilities for underwriters or groups of
individuals that accept insurance risk.
Risk Retention Group - Answer A liability insurance company owned by its members, which are
exposed to similar liability risks by virtue of being in the same business or industry.
Risk Purchasing Groups - Answer Groups of people with similar insurance needs who form an
organization to buy insurance as a group.
Self-insurance - Answer a business that pays its own claims
Residual Market - Answer insurance from the state or federal government
Insurance Company Locations - Answer Domestic, Foreign, and Alien
Certificate of Authority - Answer state license for an insurance company
, Admitted or Authorized - Answer state requires the insurance company to have a certificate of
authority
Non-admitted - Answer unauthorized-insurance company not required to have a Certificate of
Authority from the state
Surplus Lines - Answer any type of insurance for which there is no available market within the state,
and the coverage must be placed with a non admitted insurer
Methods of Marketing - Answer - Independent
- Exclusive or captive
- General agents or managing general agents
- direct writing companies
Agency - Answer The insurance agent acts on behalf of principal (Insurance Company)
Agent Authority - Answer express, implied, apparent
Fiduciary Trust - Answer - Promptly sends premiums to insurer
- Has knowledge of products
- Complies with laws and regulations
- Does not commingle funds
Legal Contract - Answer Consideration, Legal Purpose, Offer (Made by Insured), Acceptance,
Competent Parties
Adhesion - Answer Policy written by the insurance company
aleatory - Answer not equal value - small premium for a large amount of coverage
