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CALIFORNIA PSI LIFE INSURANCE exam
questions with verified answers Latest
2025-2026
A participating company is also referred to as which type of insurer? - Correct-
answer-Mutual insurer
An insurer owned by its policyholders, is called a - Correct-answer-Mutual insurer
What is a participating life insurance policy? - Correct-answer-Contract that
allows the policyowner to receive a share of surplus in the form of policy
dividends
An insurer enter into a contract with a third-party to ensure itself against losses
from insurance policies it issues. What is this agreement called? - Correct-answer-
Reinsurance
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John owns an insurance company that gives him the right to share and then sure
surplus. What kind of policy is this? - Correct-answer-Participating
Which of the following is not a characteristic of reinsurance? - Correct-answer-
Increases the unearned premium reserved
Which of the following is not a benefit of insurance? - Correct-answer-Losses due
to fraud are eliminated
When a mutual insurer becomes a stock company, the process is called - Correct-
answer-Demutualization
Which of the following is a contract that involves one party which indemnifies
another one a loss arises from an unknown event? - Correct-answer-Insurance
policy
Which of the following is an insurer established by a parent company's loss
exposure's? - Correct-answer-Captive insurers
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Which of the following is not considered to be a definition for the term "loss"? -
Correct-answer-Probability that an event will occur
Which of the following is not considered a definition of a risk? - Correct-answer-
The cause of loss
Which of the following best describes the statement; " the more times, and event
is repeated, the more predictable the outcome becomes"? - Correct-answer-Law
of large numbers
Which of the following would not be accomplished with the purchase of an
insurance policy? - Correct-answer-Risk is eliminated
Which of the following is a situation where there is a possibility of either a loss or
gain? - Correct-answer-Speculative risk
Which of the following is any situation that presents the possibility of a loss? -
Correct-answer-Loss
CALIFORNIA PSI LIFE INSURANCE exam
questions with verified answers Latest
2025-2026
A participating company is also referred to as which type of insurer? - Correct-
answer-Mutual insurer
An insurer owned by its policyholders, is called a - Correct-answer-Mutual insurer
What is a participating life insurance policy? - Correct-answer-Contract that
allows the policyowner to receive a share of surplus in the form of policy
dividends
An insurer enter into a contract with a third-party to ensure itself against losses
from insurance policies it issues. What is this agreement called? - Correct-answer-
Reinsurance
,2|Page
John owns an insurance company that gives him the right to share and then sure
surplus. What kind of policy is this? - Correct-answer-Participating
Which of the following is not a characteristic of reinsurance? - Correct-answer-
Increases the unearned premium reserved
Which of the following is not a benefit of insurance? - Correct-answer-Losses due
to fraud are eliminated
When a mutual insurer becomes a stock company, the process is called - Correct-
answer-Demutualization
Which of the following is a contract that involves one party which indemnifies
another one a loss arises from an unknown event? - Correct-answer-Insurance
policy
Which of the following is an insurer established by a parent company's loss
exposure's? - Correct-answer-Captive insurers
, 3|Page
Which of the following is not considered to be a definition for the term "loss"? -
Correct-answer-Probability that an event will occur
Which of the following is not considered a definition of a risk? - Correct-answer-
The cause of loss
Which of the following best describes the statement; " the more times, and event
is repeated, the more predictable the outcome becomes"? - Correct-answer-Law
of large numbers
Which of the following would not be accomplished with the purchase of an
insurance policy? - Correct-answer-Risk is eliminated
Which of the following is a situation where there is a possibility of either a loss or
gain? - Correct-answer-Speculative risk
Which of the following is any situation that presents the possibility of a loss? -
Correct-answer-Loss
