AD BANKER LIFE INSURANCE EXAM 2025. VERIFIED
LATEST UPDATE WITH ACCURATE QUESTIONS AND
ANSWERS 100% CORRECT (RATED A+).
Insurers - CORRECT ANS>> (Insurance Companies or Carriers) provide insurance coverage by
issuing particular insurance policies or contracts
Insurance Agencies - CORRECT ANS>> Independent sales organizations that provide service
and distribute insurance policies to consumers
Insurance Agents or Producers - CORRECT ANS>> are licensed individuals representing an
insurance company when transacting insurance business
Who primarily regulates the insurance industry? - CORRECT ANS>> The insurance industry is
regulated primarily at the state level through the legislative, judicial, and executive branches
Legislative Branch - CORRECT ANS>> Writes and passes state insurance laws or statues
designed to protect the insuring public
Judicial Branch - CORRECT ANS>> responsible for interpreting and determining the
constitutionality of the statues
(interprets the law and makes sure it is constitutionally allowed)
Executive Branch - CORRECT ANS>> (executes/enforces the law) has the power to issue rules
and regulations to help enforce statues
NAIC - CORRECT ANS>> National Association of Insurance Commissioners
National Association of Insurance Commissioners (NAIC) - CORRECT ANS>> Provides
resources, research, legislative and regulatory recommendations and interpretations for state
insurance regulators. Members may accept or reject recommendations. It has no legal authority
to enact or enforce insurance laws. The primary goal of the association is to promote state
uniformity.
Stock Insurance Company - CORRECT ANS>> Owned by its stockholders/shareholders who
elect a Board of Directors to manage the company, the board then elects officers to handle day-
to-day activities. Stockholders share in the company's profits and may receive corporate
dividends taxable as ordinary income IF declared by the directors. (Dividends not guaranteed)
Traditionally, this type of insurer issue non-participating policies, since the policyholders are not
entitled to dividends
Mutual Insurance Company - CORRECT ANS>> Owned by policyholders/members who are
considered the owners but do not directly manage the company. Board of director elected by
,the policyholders/members to manage the company and officers are elected by the board to
handle day-to-day operations.
When and if declared by the Board, policyholders may receive non-taxable dividends as a return
of unused premium. (not guaranteed) This type of insurer typically issues participating policies.
Fraternal Insurers or Fraternal Benefit Societies - CORRECT ANS>> Primarily social
organizations that engage in charitable and benevolent activities that primarily provide life
insurance to its members. Usually organized on a nonprofit basis. Members are typically from a
religious organization, lodge, order, or society.
Domestic Insurer - CORRECT ANS>> An insurer doing business in the jurisdiction in which it is
incorporated. Ex. GA incorporated insurer operating in GA
Foreign Insurer - CORRECT ANS>> An insurer licensed to operate in a state but incorporated
in another state. Ex. GA Incorporated Insurer operating in TX
Alien Insurer - CORRECT ANS>> An insurance company that is incorporated outside the United
States. Ex. Canadian Insurer operating in GA
Admitted/Authorized Insurer - CORRECT ANS>> Insurer who is approved to transact insurance
via a Certificate of Authority from the state's Department of Insurance.
Non-Admitted/Unauthorized Insurer - CORRECT ANS>> Insurer not authorized to transact
insurance in a given state by not complying with state requirements or by not seeking admission
Fair Credit Reporting Act - CORRECT ANS>> protects the consumer's right to the privacy of
credit and financial information, ensuring that all collected data is confidential, accurate, relevant
and properly used.
FCRA - CORRECT ANS>> Fair Credit Reporting Act
Fair Credit Reporting Act - CORRECT ANS>> protects the consumer's right to the privacy of
credit and financial information, ensuring that all collected data is confidential, accurate, relevant
and properly used.
credit reports may be obtained only to determine the financial and moral status of an applicant,
such as for employment screening or loan approval, or to assist in underwriting by an insurer.
pre-notification - CORRECT ANS>> the insurer must notify the insurance applicant (consumer)
that a credit report may be requested as part of the insurer's underwriting requirements, and
must have pre-authorization by obtaining the applicant's written consent to request the report.
signature obtained at the time of application
post-notification - CORRECT ANS>> If adverse action is taken, such as denial of coverage, the
insurer must notify the applicant by stating the reasons for the adverse action and the right to
request a copy of the credit report. The insurer must provide the information as to how the
applicant can request a copy of the report from the consumer agency that compiled the report.
, USA Patriot Act - CORRECT ANS>> With the increase of drug trafficking and acts of terrorism,
the desire and demand for laundered money has also increased. The PATRIOT Act was passed
to help detect and prevent this illegal activity.
AML - CORRECT ANS>> Anti-Money Laundering
Anti-Money Laundering (AML) - CORRECT ANS>> A set of procedures, laws or regulations
designed to stop the practice of generating income through illegal actions. Training for this is
required under the Patriot Act.
Currency Transaction Report (CTR) - CORRECT ANS>> Must be filed with FINCEN (Financial
Crimes Enforcement Network) through the department of Treasury for every cash transaction
that exceeds $10,000 and wire transfers in excess of $3,000
A federal regulation called the protects consumer privacy. - CORRECT ANS>>
Fair Credit Reporting Act
Insurable Interest - CORRECT ANS>> requires a financial or economic hardship in the event of
a loss due to an accident, sickness, or death of the insured.
interest must exist between the person buying the insurance, the policyowner, and the person
insured under the policy. Most family relationships qualify as insurable interest.
In the case of life and health insurance, contract law requires that insurable interest must exist
at the time of the application, not the time of the loss.
indemnify - CORRECT ANS>> to compensate for a loss, or to make one whole again
Principle of Indemnity - CORRECT ANS>> insurance is designed to restore an insured to the
same physical or financial condition which existed prior to the loss, without a profit or gain
For life and health insurance, insurable interest must exist at the time of .- CORRECT
ANS>> Application
Elements of a Legal Contract - CORRECT ANS>> agreement (offer and acceptance)
Consideration
competent parties
legal purpose
Competent Parties - CORRECT ANS>> Parties to a contract must have the legal capacity to
enter into a contract.
Not competent:
-minors
-mentally incompetent
-under the influence of drugs or alcohol
LATEST UPDATE WITH ACCURATE QUESTIONS AND
ANSWERS 100% CORRECT (RATED A+).
Insurers - CORRECT ANS>> (Insurance Companies or Carriers) provide insurance coverage by
issuing particular insurance policies or contracts
Insurance Agencies - CORRECT ANS>> Independent sales organizations that provide service
and distribute insurance policies to consumers
Insurance Agents or Producers - CORRECT ANS>> are licensed individuals representing an
insurance company when transacting insurance business
Who primarily regulates the insurance industry? - CORRECT ANS>> The insurance industry is
regulated primarily at the state level through the legislative, judicial, and executive branches
Legislative Branch - CORRECT ANS>> Writes and passes state insurance laws or statues
designed to protect the insuring public
Judicial Branch - CORRECT ANS>> responsible for interpreting and determining the
constitutionality of the statues
(interprets the law and makes sure it is constitutionally allowed)
Executive Branch - CORRECT ANS>> (executes/enforces the law) has the power to issue rules
and regulations to help enforce statues
NAIC - CORRECT ANS>> National Association of Insurance Commissioners
National Association of Insurance Commissioners (NAIC) - CORRECT ANS>> Provides
resources, research, legislative and regulatory recommendations and interpretations for state
insurance regulators. Members may accept or reject recommendations. It has no legal authority
to enact or enforce insurance laws. The primary goal of the association is to promote state
uniformity.
Stock Insurance Company - CORRECT ANS>> Owned by its stockholders/shareholders who
elect a Board of Directors to manage the company, the board then elects officers to handle day-
to-day activities. Stockholders share in the company's profits and may receive corporate
dividends taxable as ordinary income IF declared by the directors. (Dividends not guaranteed)
Traditionally, this type of insurer issue non-participating policies, since the policyholders are not
entitled to dividends
Mutual Insurance Company - CORRECT ANS>> Owned by policyholders/members who are
considered the owners but do not directly manage the company. Board of director elected by
,the policyholders/members to manage the company and officers are elected by the board to
handle day-to-day operations.
When and if declared by the Board, policyholders may receive non-taxable dividends as a return
of unused premium. (not guaranteed) This type of insurer typically issues participating policies.
Fraternal Insurers or Fraternal Benefit Societies - CORRECT ANS>> Primarily social
organizations that engage in charitable and benevolent activities that primarily provide life
insurance to its members. Usually organized on a nonprofit basis. Members are typically from a
religious organization, lodge, order, or society.
Domestic Insurer - CORRECT ANS>> An insurer doing business in the jurisdiction in which it is
incorporated. Ex. GA incorporated insurer operating in GA
Foreign Insurer - CORRECT ANS>> An insurer licensed to operate in a state but incorporated
in another state. Ex. GA Incorporated Insurer operating in TX
Alien Insurer - CORRECT ANS>> An insurance company that is incorporated outside the United
States. Ex. Canadian Insurer operating in GA
Admitted/Authorized Insurer - CORRECT ANS>> Insurer who is approved to transact insurance
via a Certificate of Authority from the state's Department of Insurance.
Non-Admitted/Unauthorized Insurer - CORRECT ANS>> Insurer not authorized to transact
insurance in a given state by not complying with state requirements or by not seeking admission
Fair Credit Reporting Act - CORRECT ANS>> protects the consumer's right to the privacy of
credit and financial information, ensuring that all collected data is confidential, accurate, relevant
and properly used.
FCRA - CORRECT ANS>> Fair Credit Reporting Act
Fair Credit Reporting Act - CORRECT ANS>> protects the consumer's right to the privacy of
credit and financial information, ensuring that all collected data is confidential, accurate, relevant
and properly used.
credit reports may be obtained only to determine the financial and moral status of an applicant,
such as for employment screening or loan approval, or to assist in underwriting by an insurer.
pre-notification - CORRECT ANS>> the insurer must notify the insurance applicant (consumer)
that a credit report may be requested as part of the insurer's underwriting requirements, and
must have pre-authorization by obtaining the applicant's written consent to request the report.
signature obtained at the time of application
post-notification - CORRECT ANS>> If adverse action is taken, such as denial of coverage, the
insurer must notify the applicant by stating the reasons for the adverse action and the right to
request a copy of the credit report. The insurer must provide the information as to how the
applicant can request a copy of the report from the consumer agency that compiled the report.
, USA Patriot Act - CORRECT ANS>> With the increase of drug trafficking and acts of terrorism,
the desire and demand for laundered money has also increased. The PATRIOT Act was passed
to help detect and prevent this illegal activity.
AML - CORRECT ANS>> Anti-Money Laundering
Anti-Money Laundering (AML) - CORRECT ANS>> A set of procedures, laws or regulations
designed to stop the practice of generating income through illegal actions. Training for this is
required under the Patriot Act.
Currency Transaction Report (CTR) - CORRECT ANS>> Must be filed with FINCEN (Financial
Crimes Enforcement Network) through the department of Treasury for every cash transaction
that exceeds $10,000 and wire transfers in excess of $3,000
A federal regulation called the protects consumer privacy. - CORRECT ANS>>
Fair Credit Reporting Act
Insurable Interest - CORRECT ANS>> requires a financial or economic hardship in the event of
a loss due to an accident, sickness, or death of the insured.
interest must exist between the person buying the insurance, the policyowner, and the person
insured under the policy. Most family relationships qualify as insurable interest.
In the case of life and health insurance, contract law requires that insurable interest must exist
at the time of the application, not the time of the loss.
indemnify - CORRECT ANS>> to compensate for a loss, or to make one whole again
Principle of Indemnity - CORRECT ANS>> insurance is designed to restore an insured to the
same physical or financial condition which existed prior to the loss, without a profit or gain
For life and health insurance, insurable interest must exist at the time of .- CORRECT
ANS>> Application
Elements of a Legal Contract - CORRECT ANS>> agreement (offer and acceptance)
Consideration
competent parties
legal purpose
Competent Parties - CORRECT ANS>> Parties to a contract must have the legal capacity to
enter into a contract.
Not competent:
-minors
-mentally incompetent
-under the influence of drugs or alcohol
