Rhode Island insurance Exam ACTUAL
QUESTIONS AND CORRECT ANSWERS
the role of insurance is to - CORRECT ANSWER transfer the risk of financial loss
from an individual or business to an insurance company
organized and incorporated under state law owned by stockholders who get a paid share of
the company's profit through dividends. also referred to as a nonparticipating or non-par bc
policy holder do not participate in paid dividends - CORRECT ANSWER stock
insurance company
organized and incorporated under state law. but they have no stockholders. instead, the
policyholders own the company. owners get paid a share of the companies profits through
dividends. participating or par companies bc policy owners do not participate in paid
dividends - CORRECT ANSWER mutual insurer companies
process of a stock company being converted into a mutual company - CORRECT
ANSWER mutualization
process of a mutual company being converted into a stock company - CORRECT
ANSWER demutualization
an association formed to underwrite and issue insurance like coverage on certain items and
areas that might otherwise be uninsurable - CORRECT ANSWER Lloyds of London
are a specialized branch of the insurance industry that insurers other insurance company's
risk. *is an arrangement by which an insurance company transfers or sells a portion of the
risk to a reinsurance company - CORRECT ANSWER reinsurers
the insurance company transferring the risk - CORRECT ANSWER ceding company
, industrial insurance sold by home service or debit insurance companies - CORRECT
ANSWER home service insurers
when 3rd party ownership is involved, applicants who also happen to be the stated primary
beneficiary are required to have - CORRECT ANSWER insurable interest in the
proposed insured
which is considered a statement that is assured to be true in every respect - CORRECT
ANSWER warranty
which best describes a warranty - CORRECT ANSWER statement guaranteed to be
true
which of these is not considered to be an element of an insurance contract - CORRECT
ANSWER negotiating
a life insurance policy would be considered contract without? - CORRECT
ANSWER insurable interest
all of the following (bilateral unilateral aleatory adhesion) are considered to be typical
characteristics describing the nature of an insurance contract except - CORRECT
ANSWER bilateral
in an insurance contract the insurer is the only party who makes a legally enforceable promise
what kind of contract is this - CORRECT ANSWER unilateral
Taking receipt of premiums and holding them for the insurance company is an example of -
CORRECT ANSWER fiduciary responsibility
a policy of adhesion can only be modified by whom - CORRECT ANSWER the
insurance company
QUESTIONS AND CORRECT ANSWERS
the role of insurance is to - CORRECT ANSWER transfer the risk of financial loss
from an individual or business to an insurance company
organized and incorporated under state law owned by stockholders who get a paid share of
the company's profit through dividends. also referred to as a nonparticipating or non-par bc
policy holder do not participate in paid dividends - CORRECT ANSWER stock
insurance company
organized and incorporated under state law. but they have no stockholders. instead, the
policyholders own the company. owners get paid a share of the companies profits through
dividends. participating or par companies bc policy owners do not participate in paid
dividends - CORRECT ANSWER mutual insurer companies
process of a stock company being converted into a mutual company - CORRECT
ANSWER mutualization
process of a mutual company being converted into a stock company - CORRECT
ANSWER demutualization
an association formed to underwrite and issue insurance like coverage on certain items and
areas that might otherwise be uninsurable - CORRECT ANSWER Lloyds of London
are a specialized branch of the insurance industry that insurers other insurance company's
risk. *is an arrangement by which an insurance company transfers or sells a portion of the
risk to a reinsurance company - CORRECT ANSWER reinsurers
the insurance company transferring the risk - CORRECT ANSWER ceding company
, industrial insurance sold by home service or debit insurance companies - CORRECT
ANSWER home service insurers
when 3rd party ownership is involved, applicants who also happen to be the stated primary
beneficiary are required to have - CORRECT ANSWER insurable interest in the
proposed insured
which is considered a statement that is assured to be true in every respect - CORRECT
ANSWER warranty
which best describes a warranty - CORRECT ANSWER statement guaranteed to be
true
which of these is not considered to be an element of an insurance contract - CORRECT
ANSWER negotiating
a life insurance policy would be considered contract without? - CORRECT
ANSWER insurable interest
all of the following (bilateral unilateral aleatory adhesion) are considered to be typical
characteristics describing the nature of an insurance contract except - CORRECT
ANSWER bilateral
in an insurance contract the insurer is the only party who makes a legally enforceable promise
what kind of contract is this - CORRECT ANSWER unilateral
Taking receipt of premiums and holding them for the insurance company is an example of -
CORRECT ANSWER fiduciary responsibility
a policy of adhesion can only be modified by whom - CORRECT ANSWER the
insurance company
