Florida 240 License Questions with Detailed Verified Answers

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Florida 240 License Questions with
Detailed Verified Answers

Question: 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


Question: An insurance applicant MUST be informed of an investigation
regarding his/her reputation and character according to the:


Ans: Fair Credit Reporting Act


Question: 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


Question: 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


Question: Who elects the governing body of a mutual insurance company?


Ans: Policyholders

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Question: 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


Question: What type of reinsurance contract involves two companies
automatically sharing their risk exposure?


Ans: treaty


Question: What year was the McCarran-Ferguson Act enacted?


Ans: 1945


Question: Which of these describe a participating life insurance policy?


Ans: Policy owners are entitled to receive dividends


Question: 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


Question: 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

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Question: What type of reinsurance contract involves two companies
automatically sharing their risk exposure?


Ans: Treaty


Question: 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


Question: All of the following are considered to be typical characteristics
describing the nature of an insurance contract, EXCEPT:


Ans: Bilateral


Question: The part of a life insurance policy guaranteed to be true is called
a(n)


Ans: warranty


Question: Statements made on an insurance application that are believed to
be true to the best of the applicant's knowledge are called


Ans: representations


Question: 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?

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Ans: Aleatory


Question: When must insurable interest be present in order for a life
insurance policy to be valid?


Ans: When the application is made


Question: A life insurance arrangement which circumvents insurable interest
statutes is called:


Ans: Investor-Originated Life Insurance


Question: Stranger Originated Life Insurance (STOLI) has been found to be in
violation of which of the following contractual elements?


Ans: Legal Purpose (Insurable Interest)


Question: Who makes the legally enforceable promises in a unilateral
contract?


Ans: Insurance company


Question: A policy of adhesion can only be modified by whom?


Ans: insurance company


Question: When third-party ownership is involved, applicants who also
happen to be the stated primary beneficiary are required to have: