CIC INSURANCE COMPANY OPERATIONS EXAM AND
PRACTICE EXAM NEWEST 2025 ACTUAL EXAM
COMPLETE QUESTIONS AND CORRECT DETAILED
ANSWERS (VERIFIED ANSWERS) |ALREADY GRADED
A+
Three types of Insurance Company and Management Stuctures - (answer)1. Stock
Insurance Company
2. Mutual Insurance Company
3. Reciprocal
Stock Insurance Company - (answer)an incorporated insurance company owned
by STOCKHOLDERS
the stockholders elect the corporation's board of directors
stockholders may or may not be policy holders
What is the objective of a Stock Insurance Company? - (answer)To make a profit
for its stockholders
Profits may be shared by forms of stock dividends or increase in stock value
Characteristics of a Stock Insurance Company - (answer)1. Capitalization
2. Reach is greater with regard to brand
,3. Primary responsibility is to stockholders not policy holders
4. Pressure on top line growth at the expense of profit
Mutual Insurance Company - (answer)incorporated insurance company OWNED
by its POLICYHOLDERS
Board of Directors is voted on by the policy holders
What is the objective of a Mutual Insurance Company? - (answer)to provide
insurance at or near the actual cost of doing business
if there is money left over in the form of profits it may be returned to policy
holders as a dividend or used to reduce future premiums
Characteristics of a Mutual Insurance Company - (answer)1. No Stockholders
2. Stable
3. Longevity in the market
4. Less pressure on the day-to-day results
Reciprocal - (answer)is a group of individuals or organizations called subscribers
who join together into an association for the purpose of insuring one another
,What is the objective of a Reciprocal? - (answer)Subscribers insure one another in
an insurance application of "one for all, and all for one"
Characteristics of a Reciprocal - (answer)1. Insureds are also the insurers
2. Specific to a niche or a single line of business
3. Less profit less pressure
4. May be more difficult to raise capital
Purpose of Establishing the Board of Directors - (answer)to make certain the
investors and/or owners interests are protected
What are the three Primary Obligations of Board Members? - (answer)1. Duty of
Care - being prudent and using due diligence (focusing on the facts)
2. Duty of Loyalty - keeping the interests of the company ahead of one's own
interest
3. Duty of Obedience - Following by laws, state purpose of company, laws (may
include disclosure of conflict of interest, as required)
Company Culture - (answer)is the distinctive ethos of the organization - its the
companies "personality"
, Values Statement - (answer)Commonly held values that define the company's
culture and beliefs
Mission Statement - (answer)Short statment of the company's core and overall
goal - why does the company do what it does
The mission statement does: - (answer)1. Identifies the goal of its operations
2. Communicates purpose and direction to employees, customers, etc.
Two types of Company Culture - (answer)1. Active Approach - leadership makes it
happen - intentional actions, clearly defined values
2. Passive Approach - happens overtime by employees observing behavior and
values, based on the behavior of management which doesn't always reflect
written values
Types of Human Resources Considerations - (answer)1. Insurance Company
Employees
2. Vendors or Third-Party Agreements
3. Blend of Emloypees and Third-Party Agreements
Insurance Company Employees - (answer)- Offers the greatest degree of control
with employee status
PRACTICE EXAM NEWEST 2025 ACTUAL EXAM
COMPLETE QUESTIONS AND CORRECT DETAILED
ANSWERS (VERIFIED ANSWERS) |ALREADY GRADED
A+
Three types of Insurance Company and Management Stuctures - (answer)1. Stock
Insurance Company
2. Mutual Insurance Company
3. Reciprocal
Stock Insurance Company - (answer)an incorporated insurance company owned
by STOCKHOLDERS
the stockholders elect the corporation's board of directors
stockholders may or may not be policy holders
What is the objective of a Stock Insurance Company? - (answer)To make a profit
for its stockholders
Profits may be shared by forms of stock dividends or increase in stock value
Characteristics of a Stock Insurance Company - (answer)1. Capitalization
2. Reach is greater with regard to brand
,3. Primary responsibility is to stockholders not policy holders
4. Pressure on top line growth at the expense of profit
Mutual Insurance Company - (answer)incorporated insurance company OWNED
by its POLICYHOLDERS
Board of Directors is voted on by the policy holders
What is the objective of a Mutual Insurance Company? - (answer)to provide
insurance at or near the actual cost of doing business
if there is money left over in the form of profits it may be returned to policy
holders as a dividend or used to reduce future premiums
Characteristics of a Mutual Insurance Company - (answer)1. No Stockholders
2. Stable
3. Longevity in the market
4. Less pressure on the day-to-day results
Reciprocal - (answer)is a group of individuals or organizations called subscribers
who join together into an association for the purpose of insuring one another
,What is the objective of a Reciprocal? - (answer)Subscribers insure one another in
an insurance application of "one for all, and all for one"
Characteristics of a Reciprocal - (answer)1. Insureds are also the insurers
2. Specific to a niche or a single line of business
3. Less profit less pressure
4. May be more difficult to raise capital
Purpose of Establishing the Board of Directors - (answer)to make certain the
investors and/or owners interests are protected
What are the three Primary Obligations of Board Members? - (answer)1. Duty of
Care - being prudent and using due diligence (focusing on the facts)
2. Duty of Loyalty - keeping the interests of the company ahead of one's own
interest
3. Duty of Obedience - Following by laws, state purpose of company, laws (may
include disclosure of conflict of interest, as required)
Company Culture - (answer)is the distinctive ethos of the organization - its the
companies "personality"
, Values Statement - (answer)Commonly held values that define the company's
culture and beliefs
Mission Statement - (answer)Short statment of the company's core and overall
goal - why does the company do what it does
The mission statement does: - (answer)1. Identifies the goal of its operations
2. Communicates purpose and direction to employees, customers, etc.
Two types of Company Culture - (answer)1. Active Approach - leadership makes it
happen - intentional actions, clearly defined values
2. Passive Approach - happens overtime by employees observing behavior and
values, based on the behavior of management which doesn't always reflect
written values
Types of Human Resources Considerations - (answer)1. Insurance Company
Employees
2. Vendors or Third-Party Agreements
3. Blend of Emloypees and Third-Party Agreements
Insurance Company Employees - (answer)- Offers the greatest degree of control
with employee status
