1 Exampromax - Stuvia US
Florida 240 License Questions and Answers
100% Correct Answers Already Graded A+
Q: The stated amount or percent of liquid assets that an insurer must have
on hand that will satisfy future obligations to its policyholders is called:
Ans: Reserves
Q: An insurance applicant MUST be informed of an investigation
regarding his/her reputation and character according to the:
Ans: Fair Credit Reporting Act
Exampromax - Stuvia US
Q: A nonprofit incorporated society that does not have capital stock and
operates for the sole benefit of its members is known as:
Ans: A fraternal benefit society
Q: What I the name of the law that requires insurers to disclose
information gathering practices and where the information was obtained?
Ans: Fair Credit Reporting Act
Q: Who elects the governing body of a mutual insurance company?
Ans: Policyholders
Q: A group-owned insurance company that is formed to assume and spread
the liability ricks of its members is known as a:
Ans: Risk retention group
Q: What type of reinsurance contract involves two companies
automatically sharing their risk exposure?
Ans: treaty
, 2 Exampromax - Stuvia US
Q: What year was the McCarran-Ferguson Act enacted?
Ans: 1945
Q: Which of these describe a participating life insurance policy?
Ans: Policy owners are entitled to receive dividends
Q: At what point must a life insurance applicant be informed of their rights
that fall under the Fair Credit Reporting Act?
Ans: Upon completion of the application
Q: Which of the following requires insurers to disclose when an applicant's
consumer or credit history is being investigated:
Ans: 1970 - Fair Credit Reporting Act
Exampromax - Stuvia US
Q: What type of reinsurance contract involves two companies
automatically sharing their risk exposure?
Ans: Treaty
Q: A group-owned insurance company that is formed to assume and spread
the liability risks of its members is known as a:
Ans: risk retention group
Q: All of the following are considered to be typical characteristics
describing the nature of an insurance contract, EXCEPT:
Ans: Bilateral
Q: The part of a life insurance policy guaranteed to be true is called a(n)
Ans: warranty
Q: Statements made on an insurance application that are believed to be true
to the best of the applicant's knowledge are called
Ans: representations
, 3 Exampromax - Stuvia US
Q: Q purchases a $500,000 life insurance policy and pays $900 in
premiums over the first six months. Q dies suddenly and the beneficiary is
paid $500,000. This exchange of unequal values reflects which of the
following insurance contract features?
Ans: Aleatory
Q: When must insurable interest be present in order for a life insurance
policy to be valid?
Ans: When the application is made
Q: A life insurance arrangement which circumvents insurable interest
statutes is called:
Ans: Investor-Originated Life Insurance
Exampromax - Stuvia US
Q: Stranger Originated Life Insurance (STOLI) has been found to be in
violation of which of the following contractual elements?
Ans: Legal Purpose (Insurable Interest)
Q: Who makes the legally enforceable promises in a unilateral contract?
Ans: Insurance company
Q: A policy of adhesion can only be modified by whom?
Ans: insurance company
Q: When third-party ownership is involved, applicants who also happen to
be the stated primary beneficiary are required to have:
Ans: insurable interest in the proposed insured
Q: Which of these is considered a statement that is assured to be true in
every aspect?
Ans: Warranty
Q: Which of these require an offer, acceptance, and consideration?
, 4 Exampromax - Stuvia US
Ans: contract
Q: If a contract of adhesion contains complicated language, to whom
would the interpretation be in favor of?
Ans: insured
Q: Insurance contracts are known as _____ because certain future
conditions or acts must occur before any claims can be paid.
Ans: conditional
Q: Insurance policies are offered on a "take it or leave it" basis, which make
them:
Ans: Contracts of Adhesion
Exampromax - Stuvia US
Q: In regards to representations or warranties, which of these statements is
TRUE?
Ans: If material to the risk, false representations will void a policy
Q: Which of these arrangements allows one to bypass insurable interest
laws?
Ans: Investor-Originated Life Insurance
Q: In an insurance contract, the insurer is the only party who makes a
legally enforceable promise. What kind of contract is this?
Ans: unilateral
Q: Which of these is NOT a type of agent authority?
Ans: principal
Q: E and F are business partners. Each takes out a $500,000 life insurance
policy on the other, naming himself as primary beneficiary. E and F
eventually terminate their business, and four months later E dies. Although
E was married with three children at the time of death, the primary
Florida 240 License Questions and Answers
100% Correct Answers Already Graded A+
Q: The stated amount or percent of liquid assets that an insurer must have
on hand that will satisfy future obligations to its policyholders is called:
Ans: Reserves
Q: An insurance applicant MUST be informed of an investigation
regarding his/her reputation and character according to the:
Ans: Fair Credit Reporting Act
Exampromax - Stuvia US
Q: A nonprofit incorporated society that does not have capital stock and
operates for the sole benefit of its members is known as:
Ans: A fraternal benefit society
Q: What I the name of the law that requires insurers to disclose
information gathering practices and where the information was obtained?
Ans: Fair Credit Reporting Act
Q: Who elects the governing body of a mutual insurance company?
Ans: Policyholders
Q: A group-owned insurance company that is formed to assume and spread
the liability ricks of its members is known as a:
Ans: Risk retention group
Q: What type of reinsurance contract involves two companies
automatically sharing their risk exposure?
Ans: treaty
, 2 Exampromax - Stuvia US
Q: What year was the McCarran-Ferguson Act enacted?
Ans: 1945
Q: Which of these describe a participating life insurance policy?
Ans: Policy owners are entitled to receive dividends
Q: At what point must a life insurance applicant be informed of their rights
that fall under the Fair Credit Reporting Act?
Ans: Upon completion of the application
Q: Which of the following requires insurers to disclose when an applicant's
consumer or credit history is being investigated:
Ans: 1970 - Fair Credit Reporting Act
Exampromax - Stuvia US
Q: What type of reinsurance contract involves two companies
automatically sharing their risk exposure?
Ans: Treaty
Q: A group-owned insurance company that is formed to assume and spread
the liability risks of its members is known as a:
Ans: risk retention group
Q: All of the following are considered to be typical characteristics
describing the nature of an insurance contract, EXCEPT:
Ans: Bilateral
Q: The part of a life insurance policy guaranteed to be true is called a(n)
Ans: warranty
Q: Statements made on an insurance application that are believed to be true
to the best of the applicant's knowledge are called
Ans: representations
, 3 Exampromax - Stuvia US
Q: Q purchases a $500,000 life insurance policy and pays $900 in
premiums over the first six months. Q dies suddenly and the beneficiary is
paid $500,000. This exchange of unequal values reflects which of the
following insurance contract features?
Ans: Aleatory
Q: When must insurable interest be present in order for a life insurance
policy to be valid?
Ans: When the application is made
Q: A life insurance arrangement which circumvents insurable interest
statutes is called:
Ans: Investor-Originated Life Insurance
Exampromax - Stuvia US
Q: Stranger Originated Life Insurance (STOLI) has been found to be in
violation of which of the following contractual elements?
Ans: Legal Purpose (Insurable Interest)
Q: Who makes the legally enforceable promises in a unilateral contract?
Ans: Insurance company
Q: A policy of adhesion can only be modified by whom?
Ans: insurance company
Q: When third-party ownership is involved, applicants who also happen to
be the stated primary beneficiary are required to have:
Ans: insurable interest in the proposed insured
Q: Which of these is considered a statement that is assured to be true in
every aspect?
Ans: Warranty
Q: Which of these require an offer, acceptance, and consideration?
, 4 Exampromax - Stuvia US
Ans: contract
Q: If a contract of adhesion contains complicated language, to whom
would the interpretation be in favor of?
Ans: insured
Q: Insurance contracts are known as _____ because certain future
conditions or acts must occur before any claims can be paid.
Ans: conditional
Q: Insurance policies are offered on a "take it or leave it" basis, which make
them:
Ans: Contracts of Adhesion
Exampromax - Stuvia US
Q: In regards to representations or warranties, which of these statements is
TRUE?
Ans: If material to the risk, false representations will void a policy
Q: Which of these arrangements allows one to bypass insurable interest
laws?
Ans: Investor-Originated Life Insurance
Q: In an insurance contract, the insurer is the only party who makes a
legally enforceable promise. What kind of contract is this?
Ans: unilateral
Q: Which of these is NOT a type of agent authority?
Ans: principal
Q: E and F are business partners. Each takes out a $500,000 life insurance
policy on the other, naming himself as primary beneficiary. E and F
eventually terminate their business, and four months later E dies. Although
E was married with three children at the time of death, the primary
