North Carolina XCEL Testing Life & Health Insurance
Exam
1. Which of the following requires insurers to disclose when
an applicant's consumer or credit history is being
investigated:: Ans- 1970 - Fair Credit Reporting Act
2. What type of reinsurance contract involves two companies
automatically sharing their risk exposure?: Ans- Treaty
3. What is the name of the law that requires insurers to
disclose information gathering practices and where the
information was obtained?: Ans- Fair Credit Re- porting Act
4. Who elects the governing body of a mutual insurance
company?: Ans- policyhold- ers
5. The stated amount or percent of liquid assets that an
insurer must have on hand that will satisfy future
obligations to its policyholders is called::
Ans- reserves
6. A group-owned insurance company that is formed to
assume and spread the liability risks of its members is
known as a:: Ans- risk retention group
7. What year was the McCarran-Ferguson Act enacted?: Ans-
1945
8. Which of these describe a participating life insurance
policy?: Ans- Policyowners are entitled to receive dividends
1.
, 1/ 9
9. At what point must a life insurance applicant be informed
of their rights that fall under the Fair Credit Reporting Act?:
Ans- Upon completion of the application
10. A nonprofit incorporated society that does not have
capital stock and operates for the sole benefit of its
members is known as:: a fraternal benefit society
11. An insurance applicant MUST be informed of an
investigation regarding his/her reputation and character
according to the:: Fair Credit Reporting Act
12. Which of the following consists of an offer, acceptance,
and considera- tion?: Contract
13. Which of these is NOT a type of agent authority?: Principal
14. E and F are business partners. Each takes out a $500,000
life insurance policy on the other, naming himself as
primary beneficiary. E and F eventually terminate their
business, and four months later E dies. Although E was
married with three children at the time of death, the
primary beneficiary is still F. However, an insurable interest
no longer exists. Where will the proceeds from E's life
insurance policy be directed to?: F
15. All of the following are considered to be typical
characteristics describing the nature of an insurance
contract, EXCEPT:: Bilateral
16. The part of a life insurance policy guaranteed to be true is
called a(n):: warranty
1.
, 17. A life insurance arrangement which circumvents insurable
interest statutes is called:: Investor-Originated Life Insurance
1/ 9
18. Taking receipt of premiums and holding them for the
insurance company is an example of:: Fiduciary responsibility
19. Which of these arrangements allows one to bypass
insurable interest laws?: Investor-Originated Life Insurance
20. Insurance contracts are known as because certain
future conditions or acts must occur before any claims can
be paid.: conditional
21. When third-party ownership is involved, applicants who
also happen to be the stated primary beneficiary are
required to have:: insurable interest in the proposed insured
22. Statements made on an insurance application that are
believed to be true to the best of the applicant's knowledge
are called:: representations 23. If a contract of adhesion
contains complicated language, to whom would the
interpretation be in favor of?: Insured
24. At what point does an informal contract become
binding?: When one party makes an offer and the other party
accepts that offer
25. When must insurable interest exist for a life insurance
contract to be valid?: Inception of the contract
26. A life insurance policy would be considered a wagering
contract WITH-
1.
Exam
1. Which of the following requires insurers to disclose when
an applicant's consumer or credit history is being
investigated:: Ans- 1970 - Fair Credit Reporting Act
2. What type of reinsurance contract involves two companies
automatically sharing their risk exposure?: Ans- Treaty
3. What is the name of the law that requires insurers to
disclose information gathering practices and where the
information was obtained?: Ans- Fair Credit Re- porting Act
4. Who elects the governing body of a mutual insurance
company?: Ans- policyhold- ers
5. The stated amount or percent of liquid assets that an
insurer must have on hand that will satisfy future
obligations to its policyholders is called::
Ans- reserves
6. A group-owned insurance company that is formed to
assume and spread the liability risks of its members is
known as a:: Ans- risk retention group
7. What year was the McCarran-Ferguson Act enacted?: Ans-
1945
8. Which of these describe a participating life insurance
policy?: Ans- Policyowners are entitled to receive dividends
1.
, 1/ 9
9. At what point must a life insurance applicant be informed
of their rights that fall under the Fair Credit Reporting Act?:
Ans- Upon completion of the application
10. A nonprofit incorporated society that does not have
capital stock and operates for the sole benefit of its
members is known as:: a fraternal benefit society
11. An insurance applicant MUST be informed of an
investigation regarding his/her reputation and character
according to the:: Fair Credit Reporting Act
12. Which of the following consists of an offer, acceptance,
and considera- tion?: Contract
13. Which of these is NOT a type of agent authority?: Principal
14. E and F are business partners. Each takes out a $500,000
life insurance policy on the other, naming himself as
primary beneficiary. E and F eventually terminate their
business, and four months later E dies. Although E was
married with three children at the time of death, the
primary beneficiary is still F. However, an insurable interest
no longer exists. Where will the proceeds from E's life
insurance policy be directed to?: F
15. All of the following are considered to be typical
characteristics describing the nature of an insurance
contract, EXCEPT:: Bilateral
16. The part of a life insurance policy guaranteed to be true is
called a(n):: warranty
1.
, 17. A life insurance arrangement which circumvents insurable
interest statutes is called:: Investor-Originated Life Insurance
1/ 9
18. Taking receipt of premiums and holding them for the
insurance company is an example of:: Fiduciary responsibility
19. Which of these arrangements allows one to bypass
insurable interest laws?: Investor-Originated Life Insurance
20. Insurance contracts are known as because certain
future conditions or acts must occur before any claims can
be paid.: conditional
21. When third-party ownership is involved, applicants who
also happen to be the stated primary beneficiary are
required to have:: insurable interest in the proposed insured
22. Statements made on an insurance application that are
believed to be true to the best of the applicant's knowledge
are called:: representations 23. If a contract of adhesion
contains complicated language, to whom would the
interpretation be in favor of?: Insured
24. At what point does an informal contract become
binding?: When one party makes an offer and the other party
accepts that offer
25. When must insurable interest exist for a life insurance
contract to be valid?: Inception of the contract
26. A life insurance policy would be considered a wagering
contract WITH-
1.
