NEBRASKA LIFE AND HEALTH FINAL PAPER 2025/2026
QUESTIONS WITH SOLUTIONS RATED A+
✔✔Surplus lines - ✔✔insurance that is not available in the regular market place.
Insurance for high risk individuals and placed with a non-admitted insurers who
specialized in a high risk market.
✔✔Domestic insurers - ✔✔insurance company incorporated in this state (home office in
the state it was formed)
✔✔Foreign insureres - ✔✔insurance company that is incorporated in another state or
territorial possession. (company chartered in CA would be a foreign company in NY)
✔✔Alien insurers - ✔✔insurance company incorporated outside the United States
✔✔Independent Agency System/ American Agency System (types of marketing
arrangements - ✔✔-1 independent agent represents several companies
-nonexclusive agency
-commissions on personal sales
-business renewal with any company
✔✔Exclusive Agency System/Captive Agents (types of marketing arrangements) - ✔✔-
1 agents represents 1 company
-exclusive agency
-commissions on personal sales
-renewals placed with appointing insurer
✔✔General Agency System (types of marketing arrangements) - ✔✔-General Agent-
entrepreneur represents 1 company
-exclusive agency
-compensation and commissions
-appoints subagents
✔✔Managerial System (types of marketing arrangements) - ✔✔-branch manager
-salaried
-agents can be employees or independent agents
✔✔Direct Response Marketing System (types of marketing arrangements) - ✔✔-no
agents
-advertise directly to consumers
-consumers apply directly to company
✔✔Financial Status (Independent Rating Services) - ✔✔financial strength based on
prior claims, experience, investment earnings, levels of reserves, and management.
, ✔✔Insurance companies financial integrity are published by: - ✔✔-AM Best
-Fitch
-Standard and Poor's
-Moody's
-Weiss
✔✔Reinsurance - ✔✔contract under which one insurance company (the reinsurer)
indemnifies another insurance company for all or part of its liabilities
✔✔Agent - ✔✔an individual licensed to sell/solicit or negotiate insurance contracts on
behalf of insurer
✔✔The Law of Agency - ✔✔defines relationship between the principal and the
agent/producer: the acts of agent/producer with the scope of authority are deemed to be
the acts of insurer
✔✔Express authority - ✔✔authority a principal intends to grant to an agent by means of
agents contract. It is the authority that is written in the contract.
✔✔Implied authority - ✔✔authority not expressed or written into the contract, but which
the agent is assumed to in order to transact the business of insurance for the principal.
✔✔Apparent authority - ✔✔authority is the appearance or the assumption of authority
based on the actions, words, or deeds, or the principal or because of circumstances the
principal created.
✔✔Fiduciary responsibility - ✔✔although agents act for insurers they are legally
obligated to treat applicants and insureds in an ethical manner because an agent
handles funds of an insured
✔✔Market conduct - ✔✔describes the way companies and producers should conduct
their business, it is a code of ethics.
✔✔Some market conduct regulations include, but are not limited to: - ✔✔-conflict of
interest
-a request of a gift or loan as a condition to complete business
-supplying confidential information
✔✔Contract - ✔✔is an agreement between 2 or more parties enforceable by law
✔✔Elements of a legal contract - ✔✔1. agreement
2. consideration
3. competent parties
4. legal purpose
QUESTIONS WITH SOLUTIONS RATED A+
✔✔Surplus lines - ✔✔insurance that is not available in the regular market place.
Insurance for high risk individuals and placed with a non-admitted insurers who
specialized in a high risk market.
✔✔Domestic insurers - ✔✔insurance company incorporated in this state (home office in
the state it was formed)
✔✔Foreign insureres - ✔✔insurance company that is incorporated in another state or
territorial possession. (company chartered in CA would be a foreign company in NY)
✔✔Alien insurers - ✔✔insurance company incorporated outside the United States
✔✔Independent Agency System/ American Agency System (types of marketing
arrangements - ✔✔-1 independent agent represents several companies
-nonexclusive agency
-commissions on personal sales
-business renewal with any company
✔✔Exclusive Agency System/Captive Agents (types of marketing arrangements) - ✔✔-
1 agents represents 1 company
-exclusive agency
-commissions on personal sales
-renewals placed with appointing insurer
✔✔General Agency System (types of marketing arrangements) - ✔✔-General Agent-
entrepreneur represents 1 company
-exclusive agency
-compensation and commissions
-appoints subagents
✔✔Managerial System (types of marketing arrangements) - ✔✔-branch manager
-salaried
-agents can be employees or independent agents
✔✔Direct Response Marketing System (types of marketing arrangements) - ✔✔-no
agents
-advertise directly to consumers
-consumers apply directly to company
✔✔Financial Status (Independent Rating Services) - ✔✔financial strength based on
prior claims, experience, investment earnings, levels of reserves, and management.
, ✔✔Insurance companies financial integrity are published by: - ✔✔-AM Best
-Fitch
-Standard and Poor's
-Moody's
-Weiss
✔✔Reinsurance - ✔✔contract under which one insurance company (the reinsurer)
indemnifies another insurance company for all or part of its liabilities
✔✔Agent - ✔✔an individual licensed to sell/solicit or negotiate insurance contracts on
behalf of insurer
✔✔The Law of Agency - ✔✔defines relationship between the principal and the
agent/producer: the acts of agent/producer with the scope of authority are deemed to be
the acts of insurer
✔✔Express authority - ✔✔authority a principal intends to grant to an agent by means of
agents contract. It is the authority that is written in the contract.
✔✔Implied authority - ✔✔authority not expressed or written into the contract, but which
the agent is assumed to in order to transact the business of insurance for the principal.
✔✔Apparent authority - ✔✔authority is the appearance or the assumption of authority
based on the actions, words, or deeds, or the principal or because of circumstances the
principal created.
✔✔Fiduciary responsibility - ✔✔although agents act for insurers they are legally
obligated to treat applicants and insureds in an ethical manner because an agent
handles funds of an insured
✔✔Market conduct - ✔✔describes the way companies and producers should conduct
their business, it is a code of ethics.
✔✔Some market conduct regulations include, but are not limited to: - ✔✔-conflict of
interest
-a request of a gift or loan as a condition to complete business
-supplying confidential information
✔✔Contract - ✔✔is an agreement between 2 or more parties enforceable by law
✔✔Elements of a legal contract - ✔✔1. agreement
2. consideration
3. competent parties
4. legal purpose
