NEBRASKA LIFE AND HEALTH EXAM SCRIPT 2025/2026
QUESTIONS WITH SOLUTIONS RATED A+
✔✔What is the purpose of a risk retention group? - ✔✔assume and spread all or part of
the liability to a group of members.
✔✔What can an RRG do? - ✔✔may re-insure another RRG's liability as long as the
members of the 2nd group are engaged in the same or similar business or industry
✔✔Risk Purchasing Group - ✔✔an entity which offers insurance to groups of like
businesses with similar exposure to risk
✔✔Private insurance - ✔✔offer many lines of insurance, may be formed as stock,
mutual, reciprocals, or fraternal insurers.
✔✔Government insurance - ✔✔provides insurance in areas that private insurers can
not.
✔✔examples of government insurance - ✔✔medicare, social security, federal crop
insurance, and national flood insurance.
✔✔Admitted insurers - ✔✔insurers who meet the states financial requirements and are
approved to transact business in the state
✔✔Non-admitted insurers - ✔✔insurers who have not been approved to do business in
the state
✔✔Surplus lines - ✔✔insurance that is not available in the regular market place.
Insurance for high risk individuals and placed with a non-admitted insurers who
specialized in a high risk market.
✔✔Domestic insurers - ✔✔insurance company incorporated in this state (home office in
the state it was formed)
✔✔Foreign insureres - ✔✔insurance company that is incorporated in another state or
territorial possession. (company chartered in CA would be a foreign company in NY)
✔✔Alien insurers - ✔✔insurance company incorporated outside the United States
✔✔Independent Agency System/ American Agency System (types of marketing
arrangements - ✔✔-1 independent agent represents several companies
-nonexclusive agency
-commissions on personal sales
-business renewal with any company
, ✔✔Exclusive Agency System/Captive Agents (types of marketing arrangements) - ✔✔-
1 agents represents 1 company
-exclusive agency
-commissions on personal sales
-renewals placed with appointing insurer
✔✔General Agency System (types of marketing arrangements) - ✔✔-General Agent-
entrepreneur represents 1 company
-exclusive agency
-compensation and commissions
-appoints subagents
✔✔Managerial System (types of marketing arrangements) - ✔✔-branch manager
-salaried
-agents can be employees or independent agents
✔✔Direct Response Marketing System (types of marketing arrangements) - ✔✔-no
agents
-advertise directly to consumers
-consumers apply directly to company
✔✔Financial Status (Independent Rating Services) - ✔✔financial strength based on
prior claims, experience, investment earnings, levels of reserves, and management.
✔✔Insurance companies financial integrity are published by: - ✔✔-AM Best
-Fitch
-Standard and Poor's
-Moody's
-Weiss
✔✔Reinsurance - ✔✔contract under which one insurance company (the reinsurer)
indemnifies another insurance company for all or part of its liabilities
✔✔Agent - ✔✔an individual licensed to sell/solicit or negotiate insurance contracts on
behalf of insurer
✔✔The Law of Agency - ✔✔defines relationship between the principal and the
agent/producer: the acts of agent/producer with the scope of authority are deemed to be
the acts of insurer
✔✔Express authority - ✔✔authority a principal intends to grant to an agent by means of
agents contract. It is the authority that is written in the contract.
QUESTIONS WITH SOLUTIONS RATED A+
✔✔What is the purpose of a risk retention group? - ✔✔assume and spread all or part of
the liability to a group of members.
✔✔What can an RRG do? - ✔✔may re-insure another RRG's liability as long as the
members of the 2nd group are engaged in the same or similar business or industry
✔✔Risk Purchasing Group - ✔✔an entity which offers insurance to groups of like
businesses with similar exposure to risk
✔✔Private insurance - ✔✔offer many lines of insurance, may be formed as stock,
mutual, reciprocals, or fraternal insurers.
✔✔Government insurance - ✔✔provides insurance in areas that private insurers can
not.
✔✔examples of government insurance - ✔✔medicare, social security, federal crop
insurance, and national flood insurance.
✔✔Admitted insurers - ✔✔insurers who meet the states financial requirements and are
approved to transact business in the state
✔✔Non-admitted insurers - ✔✔insurers who have not been approved to do business in
the state
✔✔Surplus lines - ✔✔insurance that is not available in the regular market place.
Insurance for high risk individuals and placed with a non-admitted insurers who
specialized in a high risk market.
✔✔Domestic insurers - ✔✔insurance company incorporated in this state (home office in
the state it was formed)
✔✔Foreign insureres - ✔✔insurance company that is incorporated in another state or
territorial possession. (company chartered in CA would be a foreign company in NY)
✔✔Alien insurers - ✔✔insurance company incorporated outside the United States
✔✔Independent Agency System/ American Agency System (types of marketing
arrangements - ✔✔-1 independent agent represents several companies
-nonexclusive agency
-commissions on personal sales
-business renewal with any company
, ✔✔Exclusive Agency System/Captive Agents (types of marketing arrangements) - ✔✔-
1 agents represents 1 company
-exclusive agency
-commissions on personal sales
-renewals placed with appointing insurer
✔✔General Agency System (types of marketing arrangements) - ✔✔-General Agent-
entrepreneur represents 1 company
-exclusive agency
-compensation and commissions
-appoints subagents
✔✔Managerial System (types of marketing arrangements) - ✔✔-branch manager
-salaried
-agents can be employees or independent agents
✔✔Direct Response Marketing System (types of marketing arrangements) - ✔✔-no
agents
-advertise directly to consumers
-consumers apply directly to company
✔✔Financial Status (Independent Rating Services) - ✔✔financial strength based on
prior claims, experience, investment earnings, levels of reserves, and management.
✔✔Insurance companies financial integrity are published by: - ✔✔-AM Best
-Fitch
-Standard and Poor's
-Moody's
-Weiss
✔✔Reinsurance - ✔✔contract under which one insurance company (the reinsurer)
indemnifies another insurance company for all or part of its liabilities
✔✔Agent - ✔✔an individual licensed to sell/solicit or negotiate insurance contracts on
behalf of insurer
✔✔The Law of Agency - ✔✔defines relationship between the principal and the
agent/producer: the acts of agent/producer with the scope of authority are deemed to be
the acts of insurer
✔✔Express authority - ✔✔authority a principal intends to grant to an agent by means of
agents contract. It is the authority that is written in the contract.
