Michigan Property & Casualty Exam || with 100% Errorless
Solutions.
FIO correct answers (Federal Insurance Office) Monitors insurance industry and identifies issues
and gaps in the state regulation of insurers. It also monitors access to affordable insurance by
underserved communities and consumers.
Insurance Regulation at State Level correct answers Insurance industry is regulated primarily at
the state level. Legislature writes and passes laws, judicial branch interprets them.
Surplus and Excess Insurance correct answers Insurance available when coverage cannot be
obtained from admitted insurers. Cannot be solely utilized to receive lower cost coverage than
would be available from an admitted carrier.
Private vs Government Insurers correct answers Most insurance is written through private
insurers, however there are instances where government provides an alternative, usually when
there is a lot of risk involved and private insurers have no means to insure. (Gulf Coast)
Residual Markets correct answers A private coverage source of last resort for businesses and
individuals who have been rejected by voluntary market insurers.
Insurance Agents/Producers correct answers Licensed individuals representing an insurance
company when transacting insurance.
Reinsurance Companies correct answers Insurance company that assumes all or a portion of a
risk from a primary or ceding insurance company.
Treaty Agreements correct answers Reinsurance agreement that covers all risks contained in the
subject line(s) of business automatically.
Insurers correct answers Manufacture and sell insurance coverage by way of insurance policies
or contracts.
Facultative Agreements correct answers Reinsurance agreements that allow ceding and
reinsurance companies the opportunity to negotiate coverage for individual risks.
Financial Rating Services correct answers Independent financial rating services evaluate and rate
the financial stability of insurance companies. Assign ratings to show financial
strength/weakness.
Insurance Agency correct answers Independent organizations that recruit, contract with, and
support sales agents and producers.
Self Insurer correct answers Assume the financial risk of one's self. generally on an option for
large companies.
, Insurance Regulation at the Federal Level correct answers Federal government cannot regulate
insurance in areas over which states have authority. Government is last resort.
The Insured correct answers Person or entity that buys insurance for protection from loss of life,
health, property or liability.
Domestic Insurer
Foreign Insurer
Alien Insurer correct answers Domestic-Insurer organized under laws of this state, whether or
not admitted to do business in that state.
Foreign-Not authorized to do business in this state, but in other states in the U.S
Alien-Outside of the U.S
Risk Sharing Plan correct answers Insurers agree to apportion among themselves those risks that
are unable to obtain insurance through normal channels.
NAIC correct answers (National Association of Insurance Commissioners) Consists of all state
and territorial insurance commissioners or regulators. NAIC provides resources, research,
legislative and regulatory recommendations and interpretations for state regulators. THE NAIC
HAS NO LEGAL AUTHORITY, THEY ARE JUST AN INTERPRETATION AND
CONSULTATION RESOURCE.
Fraternal Benefit Societies correct answers Social organizations that engage in charitable and
benevolent activities that provide life and health insurance to their members. Membership is
generally based off of faith, lodge or order of society.
Risk Retention Groups (RRG) correct answers Group owned insurer that primarily assumes and
spreads the liability related risks of its members. Licensed in at least one state and may insure
members in other states. They must have sufficient liquid assets to meet loss obligations. Each
member assumes a portion of risks returned.
Lloyds of London correct answers Group of underwriters called syndicates that each specialize
in a particular type of risk. Members are individually liable for each risk they assume.
Stock Insurance Company correct answers -Owned by stockholders or shareholders
-Directors and officers direct company operations and are elected by shareholders
-Stockholders receive taxable dividends as return of profit
-Dividends are not guaranteed
-Generally issue non-participating policies
Solutions.
FIO correct answers (Federal Insurance Office) Monitors insurance industry and identifies issues
and gaps in the state regulation of insurers. It also monitors access to affordable insurance by
underserved communities and consumers.
Insurance Regulation at State Level correct answers Insurance industry is regulated primarily at
the state level. Legislature writes and passes laws, judicial branch interprets them.
Surplus and Excess Insurance correct answers Insurance available when coverage cannot be
obtained from admitted insurers. Cannot be solely utilized to receive lower cost coverage than
would be available from an admitted carrier.
Private vs Government Insurers correct answers Most insurance is written through private
insurers, however there are instances where government provides an alternative, usually when
there is a lot of risk involved and private insurers have no means to insure. (Gulf Coast)
Residual Markets correct answers A private coverage source of last resort for businesses and
individuals who have been rejected by voluntary market insurers.
Insurance Agents/Producers correct answers Licensed individuals representing an insurance
company when transacting insurance.
Reinsurance Companies correct answers Insurance company that assumes all or a portion of a
risk from a primary or ceding insurance company.
Treaty Agreements correct answers Reinsurance agreement that covers all risks contained in the
subject line(s) of business automatically.
Insurers correct answers Manufacture and sell insurance coverage by way of insurance policies
or contracts.
Facultative Agreements correct answers Reinsurance agreements that allow ceding and
reinsurance companies the opportunity to negotiate coverage for individual risks.
Financial Rating Services correct answers Independent financial rating services evaluate and rate
the financial stability of insurance companies. Assign ratings to show financial
strength/weakness.
Insurance Agency correct answers Independent organizations that recruit, contract with, and
support sales agents and producers.
Self Insurer correct answers Assume the financial risk of one's self. generally on an option for
large companies.
, Insurance Regulation at the Federal Level correct answers Federal government cannot regulate
insurance in areas over which states have authority. Government is last resort.
The Insured correct answers Person or entity that buys insurance for protection from loss of life,
health, property or liability.
Domestic Insurer
Foreign Insurer
Alien Insurer correct answers Domestic-Insurer organized under laws of this state, whether or
not admitted to do business in that state.
Foreign-Not authorized to do business in this state, but in other states in the U.S
Alien-Outside of the U.S
Risk Sharing Plan correct answers Insurers agree to apportion among themselves those risks that
are unable to obtain insurance through normal channels.
NAIC correct answers (National Association of Insurance Commissioners) Consists of all state
and territorial insurance commissioners or regulators. NAIC provides resources, research,
legislative and regulatory recommendations and interpretations for state regulators. THE NAIC
HAS NO LEGAL AUTHORITY, THEY ARE JUST AN INTERPRETATION AND
CONSULTATION RESOURCE.
Fraternal Benefit Societies correct answers Social organizations that engage in charitable and
benevolent activities that provide life and health insurance to their members. Membership is
generally based off of faith, lodge or order of society.
Risk Retention Groups (RRG) correct answers Group owned insurer that primarily assumes and
spreads the liability related risks of its members. Licensed in at least one state and may insure
members in other states. They must have sufficient liquid assets to meet loss obligations. Each
member assumes a portion of risks returned.
Lloyds of London correct answers Group of underwriters called syndicates that each specialize
in a particular type of risk. Members are individually liable for each risk they assume.
Stock Insurance Company correct answers -Owned by stockholders or shareholders
-Directors and officers direct company operations and are elected by shareholders
-Stockholders receive taxable dividends as return of profit
-Dividends are not guaranteed
-Generally issue non-participating policies
