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Alabama Life Insurance Exam Questions
with Detailed Verified Answers (100%
Correct Answers) /Already Graded A+
What are commercial insurers also referred to as?
Ans: Private Insurance Companies
Commercial Insurers are in the business of selling insurance for ___ ________.
Ans: a profit
What two groups can commercial insurance be broken into?
Ans: Stock Companies & Mutual Insurers
What is a stock insurer?
Ans: 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?
Ans: stock companies
Which type of commercial insurer is participating?
Ans: mutual insurers
what is a mutual insurer?
Ans: 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?
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Ans: Yes
Are dividends subject to taxation in a PAR company?
Ans: No; only the interest, if collected, is taxable
If a company operates as both PAR and NONPAR what is it called ?
Ans: a Mixed Insurer
Are dividends guaranteed?
Ans: Never
An insurer selling more than one type of insurance is called a?
Ans: Multi-Line Insurer
Strong Assessment Mutual Companies are classified by:
Ans: 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?
Ans: Pure Assessment Company
What type of mutual company charges a premium at the beginning to cover
losses, and returns a surplus, or levies additional amounts to meet expenses and
losses?
Ans: Advance Premium Assessment Company
What are fraternal benefit societies?
Ans: special types of mutual companies that are non-profit religious, ethnic, or charitable
organizations.
Who would a fraternal benefit society supply insurance to?
Ans: Only its members
What are risk retention groups?
Click here for more: Preppass - Stuvia
Alabama Life Insurance Exam Questions
with Detailed Verified Answers (100%
Correct Answers) /Already Graded A+
What are commercial insurers also referred to as?
Ans: Private Insurance Companies
Commercial Insurers are in the business of selling insurance for ___ ________.
Ans: a profit
What two groups can commercial insurance be broken into?
Ans: Stock Companies & Mutual Insurers
What is a stock insurer?
Ans: 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?
Ans: stock companies
Which type of commercial insurer is participating?
Ans: mutual insurers
what is a mutual insurer?
Ans: 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?
, Page | 2
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Ans: Yes
Are dividends subject to taxation in a PAR company?
Ans: No; only the interest, if collected, is taxable
If a company operates as both PAR and NONPAR what is it called ?
Ans: a Mixed Insurer
Are dividends guaranteed?
Ans: Never
An insurer selling more than one type of insurance is called a?
Ans: Multi-Line Insurer
Strong Assessment Mutual Companies are classified by:
Ans: 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?
Ans: Pure Assessment Company
What type of mutual company charges a premium at the beginning to cover
losses, and returns a surplus, or levies additional amounts to meet expenses and
losses?
Ans: Advance Premium Assessment Company
What are fraternal benefit societies?
Ans: special types of mutual companies that are non-profit religious, ethnic, or charitable
organizations.
Who would a fraternal benefit society supply insurance to?
Ans: Only its members
What are risk retention groups?
