Xcel Pre-Final Exam - New York Life, Accident
and Health Part 1 Questions with Correct
Answers 2025
What kind of life insurance policy issued by a mutual insurer provides a return of divisible
surplus?
A. nonparticipating life insurance policy
B. participating life insurance policy
C. divisible surplus life insurance policy
D. straight life insurance policy - CORRECT ANSWER -participating life insurance policy
Ken is a producer who has obtained Consumer Information Reports under false pretenses.
Under the Fair Credit Reporting Act, what is the maximum penalty that may be imposed on
Ken?
A. $1,000
B. $3,000
C. $5,000
D. $7,000 - CORRECT ANSWER -$5,000
An insurer's ability to make unpredictable payouts to policyowners is called
A. investment values
B. liquidity
C. assets
D. capital - CORRECT ANSWER -liquidity
The Fair Credit and Reporting Act's main purpose is to
A. assist in the underwriting of insurance policies
,B. protect insurers from an applicant's misrepresentation
C. protect consumers with guidelines regarding credit reporting and distribution
D. assist an insurer in determining an applicant's creditworthiness - CORRECT ANSWER -protect
consumers with guidelines regarding credit reporting and distribution
A plan in which an employer pays insurance benefits from a fund derived from the employer's
current revenues is called
A. A self-derived plan
B. A multiple-employer plan
C. A blanket plan
D. A self-funded plan - CORRECT ANSWER -A self-funded plan
Karen is a producer who has obtained personal information about a client without having a
legitimate reason to do so. Under the McCarran-Ferguson Act, what is the minimum penalty for
this?
A. $0
B. $5,000
C. $10,000
D. $15,000 - CORRECT ANSWER -$10,000
A(n) ______ company is owned by its shareholders.
A. mixed
B. interactive
C. stock
D. mutual - CORRECT ANSWER -stock
,ABC Insurance Company transfers part of their risk to XYZ Insurance Company. This situation is
called
A. reciprocity
B. reinsurance
C. conservation
D. risk transfer - CORRECT ANSWER -reinsurance
The Do Not Call Registry offers exemptions for calls placed from all of the following EXCEPT
A. charities
B. political organizations
C. insurance sales calls
D. surveys - CORRECT ANSWER -insurance sales calls
A life insurance company has transferred some of its risk to another insurer. The insurer
assuming the risk is called the
A. mutual insurer
B. reinsurer
C. reciprocal insurer
D. participating insurer - CORRECT ANSWER -reinsurer
A nonparticipating policy will
A. provide a return of premium
B. provide tax advantages
C. not pay dividends
D. give policyowners special privileges - CORRECT ANSWER -not pay dividends
What is the primary purpose of a rating service company such as A.M Best?
, A. Determine which insurer offers the best rates
B. Determine which insurer offers the best policies
C. Determine financial strength of an insurance company
D. Determine which agent to use locally - CORRECT ANSWER -Determine financial strength of an
insurance company
What is considered to be the primary reason for buying life insurance?
A. Provide death benefits
B. Provide money for retirement
C. Provide living benefits
D. Provide money for college - CORRECT ANSWER -Provide death benefits
Fraternal Benefit Society has each of the following characteristics EXCEPT
A. Incorporated
B. Without capital stock
C. Exist For profit
D. Exist for the benefit of its members - CORRECT ANSWER -Exist For profit
Which of the following is NOT considered advertising?
A. A rating from a rating service company, such as A.M. Best
B. An illustration
C. A sales presentation
D. Direct mailing from an agency - CORRECT ANSWER -A rating from a rating service company,
such as A.M. Best
An insurer's claim settlement practices are regulated by the
A . Securities and Exchange Commission (SEC)
and Health Part 1 Questions with Correct
Answers 2025
What kind of life insurance policy issued by a mutual insurer provides a return of divisible
surplus?
A. nonparticipating life insurance policy
B. participating life insurance policy
C. divisible surplus life insurance policy
D. straight life insurance policy - CORRECT ANSWER -participating life insurance policy
Ken is a producer who has obtained Consumer Information Reports under false pretenses.
Under the Fair Credit Reporting Act, what is the maximum penalty that may be imposed on
Ken?
A. $1,000
B. $3,000
C. $5,000
D. $7,000 - CORRECT ANSWER -$5,000
An insurer's ability to make unpredictable payouts to policyowners is called
A. investment values
B. liquidity
C. assets
D. capital - CORRECT ANSWER -liquidity
The Fair Credit and Reporting Act's main purpose is to
A. assist in the underwriting of insurance policies
,B. protect insurers from an applicant's misrepresentation
C. protect consumers with guidelines regarding credit reporting and distribution
D. assist an insurer in determining an applicant's creditworthiness - CORRECT ANSWER -protect
consumers with guidelines regarding credit reporting and distribution
A plan in which an employer pays insurance benefits from a fund derived from the employer's
current revenues is called
A. A self-derived plan
B. A multiple-employer plan
C. A blanket plan
D. A self-funded plan - CORRECT ANSWER -A self-funded plan
Karen is a producer who has obtained personal information about a client without having a
legitimate reason to do so. Under the McCarran-Ferguson Act, what is the minimum penalty for
this?
A. $0
B. $5,000
C. $10,000
D. $15,000 - CORRECT ANSWER -$10,000
A(n) ______ company is owned by its shareholders.
A. mixed
B. interactive
C. stock
D. mutual - CORRECT ANSWER -stock
,ABC Insurance Company transfers part of their risk to XYZ Insurance Company. This situation is
called
A. reciprocity
B. reinsurance
C. conservation
D. risk transfer - CORRECT ANSWER -reinsurance
The Do Not Call Registry offers exemptions for calls placed from all of the following EXCEPT
A. charities
B. political organizations
C. insurance sales calls
D. surveys - CORRECT ANSWER -insurance sales calls
A life insurance company has transferred some of its risk to another insurer. The insurer
assuming the risk is called the
A. mutual insurer
B. reinsurer
C. reciprocal insurer
D. participating insurer - CORRECT ANSWER -reinsurer
A nonparticipating policy will
A. provide a return of premium
B. provide tax advantages
C. not pay dividends
D. give policyowners special privileges - CORRECT ANSWER -not pay dividends
What is the primary purpose of a rating service company such as A.M Best?
, A. Determine which insurer offers the best rates
B. Determine which insurer offers the best policies
C. Determine financial strength of an insurance company
D. Determine which agent to use locally - CORRECT ANSWER -Determine financial strength of an
insurance company
What is considered to be the primary reason for buying life insurance?
A. Provide death benefits
B. Provide money for retirement
C. Provide living benefits
D. Provide money for college - CORRECT ANSWER -Provide death benefits
Fraternal Benefit Society has each of the following characteristics EXCEPT
A. Incorporated
B. Without capital stock
C. Exist For profit
D. Exist for the benefit of its members - CORRECT ANSWER -Exist For profit
Which of the following is NOT considered advertising?
A. A rating from a rating service company, such as A.M. Best
B. An illustration
C. A sales presentation
D. Direct mailing from an agency - CORRECT ANSWER -A rating from a rating service company,
such as A.M. Best
An insurer's claim settlement practices are regulated by the
A . Securities and Exchange Commission (SEC)
