Course 1 Terms Exam 2026 Questions
and Answers
Insurer - Correct answer-The insurer is the insurance company.
Insurance - Correct answer-The transfer of risk through the pooling or
accumulation of funds.
Insured - Correct answer-The insured is the customer receiving insurance
protection under an insurance policy.
Self-Insurers - Correct answer-A self-insurer establishes a self-funded plan to cover
potential losses instead of transferring the risk to an insurance company.
Broker - Correct answer-A Broker represents themselves and the insured (i.e., the
client or customer).
Reinsurance - Correct answer-Reinsurance is the acceptance by one or more
insurers, called reinsurers, of a portion of the risk underwritten by another insurer
who has contracted for the entire coverage.
Actuarial department - Correct answer-The actuarial department calculates policy
rates, reserves, and dividends.
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, Alien Insurer - Correct answer-An Alien Insurer in the United States is an insurer
whose principal office and domiciled location is outside the country.
Admitted Insurer - Correct answer-An admitted or authorized insurer is an insurer
who has received a certificate of authority from a state's department of insurance
authorizing them to conduct insurance business in that state.
Captive Insurer - Correct answer-A Captive Insurer is an issuer established and
owned by a parent firm for the purpose of insuring the parent firm's loss exposure.
Certificate of Authority - Correct answer-A Certificate of Authority is a license
issued to an insurer by a department of insurance (or equivalent state agency),
which authorizes that company to conduct insurance business in that particular
state.
Claims Department - Correct answer-The claims department is responsible for
processing, investigating, and paying claims.
Divisible Surplus - Correct answer-Divisible surplus is the amount of earnings paid
to policyowners as dividends after the insurance company sets aside funds required
to cover reserves, operating expenses, and general business purposes.
Domestic Insurer - Correct answer-A Domestic Insurer is an insurer with its
principal or home office in a state where it is authorized.
©COPYRIGHT 2025, ALL RIGHTS RESERVED 2
and Answers
Insurer - Correct answer-The insurer is the insurance company.
Insurance - Correct answer-The transfer of risk through the pooling or
accumulation of funds.
Insured - Correct answer-The insured is the customer receiving insurance
protection under an insurance policy.
Self-Insurers - Correct answer-A self-insurer establishes a self-funded plan to cover
potential losses instead of transferring the risk to an insurance company.
Broker - Correct answer-A Broker represents themselves and the insured (i.e., the
client or customer).
Reinsurance - Correct answer-Reinsurance is the acceptance by one or more
insurers, called reinsurers, of a portion of the risk underwritten by another insurer
who has contracted for the entire coverage.
Actuarial department - Correct answer-The actuarial department calculates policy
rates, reserves, and dividends.
©COPYRIGHT 2025, ALL RIGHTS RESERVED 1
, Alien Insurer - Correct answer-An Alien Insurer in the United States is an insurer
whose principal office and domiciled location is outside the country.
Admitted Insurer - Correct answer-An admitted or authorized insurer is an insurer
who has received a certificate of authority from a state's department of insurance
authorizing them to conduct insurance business in that state.
Captive Insurer - Correct answer-A Captive Insurer is an issuer established and
owned by a parent firm for the purpose of insuring the parent firm's loss exposure.
Certificate of Authority - Correct answer-A Certificate of Authority is a license
issued to an insurer by a department of insurance (or equivalent state agency),
which authorizes that company to conduct insurance business in that particular
state.
Claims Department - Correct answer-The claims department is responsible for
processing, investigating, and paying claims.
Divisible Surplus - Correct answer-Divisible surplus is the amount of earnings paid
to policyowners as dividends after the insurance company sets aside funds required
to cover reserves, operating expenses, and general business purposes.
Domestic Insurer - Correct answer-A Domestic Insurer is an insurer with its
principal or home office in a state where it is authorized.
©COPYRIGHT 2025, ALL RIGHTS RESERVED 2
