NC LIFE INSURANCE EXAM PREP CHAPTER I
Liquidity - Answers - indicates a company's ability to make unpredictable payouts to
policy owners
Insurance - Answers - evolved to produce a practical solution to economic
uncertainties and losses
Reserves - Answers - the accounting measurement of an insurer's future obligations to
its policyholders.
They are classified as liabilities on the insurance company's accounting statements
since they must
be settled at a future date.
Annuities - Answers - provide income by making a series of payments to the annuitant
for a specific period of time or for life
Health Insurance - Answers - evolved from scientific principles to provide funds for
medical expenses due to sickness or injury and to cover loss of income during a
disability.
multi-line insurers. - Answers - Companies that sell more than one
line of insurance
Stock insurance company - Answers - a private organization, organized and
incorporated under state laws for the purpose of
making a profit for its stockholders
A stock company - Answers - referred to as a nonparticipating company because
policyholders do not participate in dividends resulting from stock ownership.
policy dividends - Answers - represent a "refund" of the portion of premium that
remains after the company has set aside the
necessary reserves and has made deductions for claims and expenses and can also
include a share
in the company's investment, mortality, and operating profits.
demutualization - Answers - mutuals can convert to stock companies through a
process called
mutualization - Answers - a stock company may be converted into a mutual
company through a process called
Reciprocal insurers - Answers - organized on the basis of ownership by their
policyholders; it is the policyholders themselves who insure the risks of the other
Liquidity - Answers - indicates a company's ability to make unpredictable payouts to
policy owners
Insurance - Answers - evolved to produce a practical solution to economic
uncertainties and losses
Reserves - Answers - the accounting measurement of an insurer's future obligations to
its policyholders.
They are classified as liabilities on the insurance company's accounting statements
since they must
be settled at a future date.
Annuities - Answers - provide income by making a series of payments to the annuitant
for a specific period of time or for life
Health Insurance - Answers - evolved from scientific principles to provide funds for
medical expenses due to sickness or injury and to cover loss of income during a
disability.
multi-line insurers. - Answers - Companies that sell more than one
line of insurance
Stock insurance company - Answers - a private organization, organized and
incorporated under state laws for the purpose of
making a profit for its stockholders
A stock company - Answers - referred to as a nonparticipating company because
policyholders do not participate in dividends resulting from stock ownership.
policy dividends - Answers - represent a "refund" of the portion of premium that
remains after the company has set aside the
necessary reserves and has made deductions for claims and expenses and can also
include a share
in the company's investment, mortality, and operating profits.
demutualization - Answers - mutuals can convert to stock companies through a
process called
mutualization - Answers - a stock company may be converted into a mutual
company through a process called
Reciprocal insurers - Answers - organized on the basis of ownership by their
policyholders; it is the policyholders themselves who insure the risks of the other
