XCEL CHAPTER 1 EXAM REVIEW
QUESTIONS AND ANSWERS
regarding credit reporting and distribution
Stock insurer - ANSWER-A non-participating company is also called
Insurance policy - ANSWER-Contract that involves one party which indemnifies
another when a loss arises from an unknown event
Mutual - ANSWER-A type of insurer that is owned by its policy owners is called
Because dividends are considered to be a return of premium - ANSWER-Why are
dividends from a mutual insurer not subject to taxation?
Participating life insurance policy - ANSWER-Life insurance policy issued by a
mutual insurer provides a return of divisible surplus
Exist for profit - ANSWER-Fraternal Benefit Society does NOT
Reinsurance - ANSWER-Type of insurance where an insurer transfers loss
exposures from policies written for its insurers
Demutualization - ANSWER-When a mutual insurer becomes a stock company
Self-funded plan - ANSWER-A plan in which an employer pays insurance benefits
from a fund derived from the employer's current revenues
State insurance departments - ANSWER-Regulates insurer's claim settlement
practices
$5,000 and 1 year imprisonment - ANSWER-Maximum penalty under the Fair Credit
and Reporting Act
Mutual Insurer - ANSWER-AKA Re-insurer
Reinsurance - ANSWER-An insurer enters into a contract with a third party to insure
itself against losses from insurance policies it issues. What is this agreement called?
Death benefits - ANSWER-Primary reason for purchasing life insurance
Captive Insurer - ANSWER-Insurer established by a parent company for the purpose
of insuring the parent company's loss exposures
The Fair Credit and Reporting Act - ANSWER-Protects consumers with guidelines
It is the distribution of excess of funds accumulated by the insurer on participating
policies - ANSWER-What is a true statement regarding a life insurance policy
dividend?
QUESTIONS AND ANSWERS
regarding credit reporting and distribution
Stock insurer - ANSWER-A non-participating company is also called
Insurance policy - ANSWER-Contract that involves one party which indemnifies
another when a loss arises from an unknown event
Mutual - ANSWER-A type of insurer that is owned by its policy owners is called
Because dividends are considered to be a return of premium - ANSWER-Why are
dividends from a mutual insurer not subject to taxation?
Participating life insurance policy - ANSWER-Life insurance policy issued by a
mutual insurer provides a return of divisible surplus
Exist for profit - ANSWER-Fraternal Benefit Society does NOT
Reinsurance - ANSWER-Type of insurance where an insurer transfers loss
exposures from policies written for its insurers
Demutualization - ANSWER-When a mutual insurer becomes a stock company
Self-funded plan - ANSWER-A plan in which an employer pays insurance benefits
from a fund derived from the employer's current revenues
State insurance departments - ANSWER-Regulates insurer's claim settlement
practices
$5,000 and 1 year imprisonment - ANSWER-Maximum penalty under the Fair Credit
and Reporting Act
Mutual Insurer - ANSWER-AKA Re-insurer
Reinsurance - ANSWER-An insurer enters into a contract with a third party to insure
itself against losses from insurance policies it issues. What is this agreement called?
Death benefits - ANSWER-Primary reason for purchasing life insurance
Captive Insurer - ANSWER-Insurer established by a parent company for the purpose
of insuring the parent company's loss exposures
The Fair Credit and Reporting Act - ANSWER-Protects consumers with guidelines
It is the distribution of excess of funds accumulated by the insurer on participating
policies - ANSWER-What is a true statement regarding a life insurance policy
dividend?
