ALABAMA LIFE INSURANCE EXAM 2024 WITH 100% CORRECT ANSWERS

What are commercial insurers also referred to as? - ANSWERS Private Insurance Companies Commercial Insurers are in the business of selling insurance for ___ ________. - ANSWERS a profit What two groups can commercial insurance be broken into? - ANSWERS Stock Companies & Mutual Insurers What is a stock insurer? - ANSWERS incorporated to make a profit for its stockholders. nonparticipating because the policyholders do not receive dividends unless they are stockholders. dividends are subject to taxation. Which type of commercial insurer is nonparticipating? - ANSWERS stock companies Which type of commercial insurer is participating? - ANSWERS mutual insurers what is a mutual insurer? - ANSWERS owned by policyholders. participating policies because policyholders get to participate in receiving dividends and electing directors. dividends are not subject to taxation unless they collect interest. Are dividends subject to taxation in a NONPAR company? - ANSWERS Yes Are dividends subject to taxation in a PAR company? - ANSWERS No; only the interest, if collected, is taxable If a company operates as both PAR and NONPAR what is it called ? - ANSWERS a Mixed Insurer Are dividends guaranteed? - ANSWERS Never An insurer selling more than one type of insurance is called a? - ANSWERS Multi-Line Insurer Strong Assessment Mutual Companies are classified by: - ANSWERS the way that they charge premiums What type of mutual company operates on a loss-sharing basis, where each member is assessed a portion of losses? - ANSWERS Pure Assessment Company