1
MASS STATE LIFE INSURANCE EXAM
NEWLY FORMATTED STUDY GUIDE
WITH ACTUAL 2025/26 EXAM TIPS
Which of the A participating life policy is one in which the
following describes a policyowner
receives dividends deriving from the company's
participating life
divisible surplus
insurance policy?
What type of Under treaty reinsurance, each party
reinsurance automatically accepts specific percentages
contract between
two insurers involves of the insurer's business.
an automatic sharing
of the risks
assumed?
At what point must a life Upon completion of the application
insurance applicant be
informed of their
rights that fall under
the Fair Credit
Reporting Act?
The State Guaranty that a claim will be paid if an admitted insurer
Association becomes insolvent
guarantees
,2
Dividends from a mutual Policyholders
insurance company are
paid to whom?
What is considered reserves
the accounting
measurement of an
insurance company's
future obligations to
its policyowners?
A group-owned risk retention group
insurance company
that is formed to
assume and spread
the liability risks of its
members is known as a
,3
Which of the Lloyd's organization
following is a
syndicate
established by a
group of insurers
to share
underwriting
duties?
An agent's authority to agent's contract and the insurance company's
bind an insurer to an appointment
insurance contract
may be granted in
the
Dividends from a stock shareholders
insurance company are
normally sent to
-insurance is based on the sharing of risks
among a large group of people
Law of Large numbers -states that the larger the number of people,
the more predictable the actual losses will
be
-companies use this data to calculate rates
Speculative risk -involves opportunity for either loss or gain
-not covered by insurance companies
-a situation that can only result in a loss, there
pure risk is no opportunity for financial gain
-only type of risk that is insurable
treatment of risk simply avoiding as many risks as possible
through: avoidance -effective but not always practical
treatment of risk since we cannot avoid risk entirely we often
attempt to lessen the possibility of a loss by
, 4
through- reduction taking acting to reduce the risk
-
when a group of individuals or businesses with
treatment of risk similar exposures share the losses that occur
through- sharing within that group
-reciprocal insurance exchange is a formal
risk sharing arrangement
treatment of risk also known as self-insurance: when individuals
through- retention have the financial ability to fund losses by
themselves when they occur
the most effective way to handle risk
treatment of risk - risk is transferred to another party -
through- transfer insurance is the most common method of
transferring risk from an individual or group
to an insurance company
-must be due to chance
-cannot be catastrophic
-must be randomly selected
• Loss exposure to be insured must be
elements of insurable
large - Insurance company must be
risk
able to predict
loss ( based on law of large numbers)
- Loss must be definite and measurable -
Time, place, amount, and when payable
-to provide financial protection against losses that
may be
incurred due to a chance happening or
nature of insurance event such as death, illness, or accident
-protection is provided through an
insurance policy which is a simple device
for accumulating funds to meet these
MASS STATE LIFE INSURANCE EXAM
NEWLY FORMATTED STUDY GUIDE
WITH ACTUAL 2025/26 EXAM TIPS
Which of the A participating life policy is one in which the
following describes a policyowner
receives dividends deriving from the company's
participating life
divisible surplus
insurance policy?
What type of Under treaty reinsurance, each party
reinsurance automatically accepts specific percentages
contract between
two insurers involves of the insurer's business.
an automatic sharing
of the risks
assumed?
At what point must a life Upon completion of the application
insurance applicant be
informed of their
rights that fall under
the Fair Credit
Reporting Act?
The State Guaranty that a claim will be paid if an admitted insurer
Association becomes insolvent
guarantees
,2
Dividends from a mutual Policyholders
insurance company are
paid to whom?
What is considered reserves
the accounting
measurement of an
insurance company's
future obligations to
its policyowners?
A group-owned risk retention group
insurance company
that is formed to
assume and spread
the liability risks of its
members is known as a
,3
Which of the Lloyd's organization
following is a
syndicate
established by a
group of insurers
to share
underwriting
duties?
An agent's authority to agent's contract and the insurance company's
bind an insurer to an appointment
insurance contract
may be granted in
the
Dividends from a stock shareholders
insurance company are
normally sent to
-insurance is based on the sharing of risks
among a large group of people
Law of Large numbers -states that the larger the number of people,
the more predictable the actual losses will
be
-companies use this data to calculate rates
Speculative risk -involves opportunity for either loss or gain
-not covered by insurance companies
-a situation that can only result in a loss, there
pure risk is no opportunity for financial gain
-only type of risk that is insurable
treatment of risk simply avoiding as many risks as possible
through: avoidance -effective but not always practical
treatment of risk since we cannot avoid risk entirely we often
attempt to lessen the possibility of a loss by
, 4
through- reduction taking acting to reduce the risk
-
when a group of individuals or businesses with
treatment of risk similar exposures share the losses that occur
through- sharing within that group
-reciprocal insurance exchange is a formal
risk sharing arrangement
treatment of risk also known as self-insurance: when individuals
through- retention have the financial ability to fund losses by
themselves when they occur
the most effective way to handle risk
treatment of risk - risk is transferred to another party -
through- transfer insurance is the most common method of
transferring risk from an individual or group
to an insurance company
-must be due to chance
-cannot be catastrophic
-must be randomly selected
• Loss exposure to be insured must be
elements of insurable
large - Insurance company must be
risk
able to predict
loss ( based on law of large numbers)
- Loss must be definite and measurable -
Time, place, amount, and when payable
-to provide financial protection against losses that
may be
incurred due to a chance happening or
nature of insurance event such as death, illness, or accident
-protection is provided through an
insurance policy which is a simple device
for accumulating funds to meet these
