Massachusetts Mass State Life Insurance
Exam Questions With Correct Answers
Which of the following describes a participating life insurance policy?
| | | | | | | | |
A participating life policy is one in which the policy owner receives dividends
| | | | | | | | | | | |
deriving from the company's divisible surplus
| | | | | |
What type of reinsurance contract between two insurers involves an automatic
| | | | | | | | | |
sharing of the risks assumed?
| | | | |
Under treaty reinsurance, each party automatically accepts specific percentages
| | | | | | | |
of the insurer's business.
| | | |
At what point must a life insurance applicant be informed of their rights that fall
| | | | | | | | | | | | | |
under the Fair Credit Reporting Act?
| | | | | |
Upon completion of the application
| | | |
The State Guaranty Association guarantees
| | | |
that a claim will be paid if an admitted insurer becomes insolvent
| | | | | | | | | | |
,Dividends from a mutual insurance company are paid to whom?
| | | | | | | | |
Policyholders
|
What is considered the accounting measurement of an insurance company's
| | | | | | | | |
future obligations to its policy owners?
| | | | | |
reserves
A group-owned insurance company that is formed to assume and spread the
| | | | | | | | | | |
liability risks of its members is known as a
| | | | | | | | |
risk retention group
| |
Which of the following is a syndicate established by a group of insurers to share
| | | | | | | | | | | | | |
underwriting duties?
| |
Lloyd's organization|
,An agent's authority to bind an insurer to an insurance contract may be granted in
| | | | | | | | | | | | | |
the
|
agent's contract and the insurance company's appointment
| | | | | |
Dividends from a stock insurance company are normally sent to
| | | | | | | | |
shareholders
|
Law of Large numbers
| | |
-insurance is based on the sharing of risks among a large group of people
| | | | | | | | | | | | |
-states that the larger the number of people, the more predictable the actual
| | | | | | | | | | | |
|losses will be
| |
-companies use this data to calculate rates
| | | | | |
Speculative risk |
-involves opportunity for either loss or gain
| | | | | |
-not covered by insurance companies
| | | |
, pure risk |
-a situation that can only result in a loss, there is no opportunity for financial gain
| | | | | | | | | | | | | | |
-only type of risk that is insurable
| | | | | |
treatment of risk through: avoidance | | | |
simply avoiding as many risks as possible
| | | | | | |
-effective but not always practical | | | |
treatment of risk through- reduction | | | |
since we cannot avoid risk entirely we often attempt to lessen the possibility of a
| | | | | | | | | | | | | |
loss by taking acting to reduce the risk
| | | | | | | |
-
treatment of risk through- sharing | | | |
when a group of individuals or businesses with similar exposures share the losses
| | | | | | | | | | | |
that occur within that group
| | | | |
-reciprocal insurance exchange is a formal risk sharing arrangement
| | | | | | | |
Exam Questions With Correct Answers
Which of the following describes a participating life insurance policy?
| | | | | | | | |
A participating life policy is one in which the policy owner receives dividends
| | | | | | | | | | | |
deriving from the company's divisible surplus
| | | | | |
What type of reinsurance contract between two insurers involves an automatic
| | | | | | | | | |
sharing of the risks assumed?
| | | | |
Under treaty reinsurance, each party automatically accepts specific percentages
| | | | | | | |
of the insurer's business.
| | | |
At what point must a life insurance applicant be informed of their rights that fall
| | | | | | | | | | | | | |
under the Fair Credit Reporting Act?
| | | | | |
Upon completion of the application
| | | |
The State Guaranty Association guarantees
| | | |
that a claim will be paid if an admitted insurer becomes insolvent
| | | | | | | | | | |
,Dividends from a mutual insurance company are paid to whom?
| | | | | | | | |
Policyholders
|
What is considered the accounting measurement of an insurance company's
| | | | | | | | |
future obligations to its policy owners?
| | | | | |
reserves
A group-owned insurance company that is formed to assume and spread the
| | | | | | | | | | |
liability risks of its members is known as a
| | | | | | | | |
risk retention group
| |
Which of the following is a syndicate established by a group of insurers to share
| | | | | | | | | | | | | |
underwriting duties?
| |
Lloyd's organization|
,An agent's authority to bind an insurer to an insurance contract may be granted in
| | | | | | | | | | | | | |
the
|
agent's contract and the insurance company's appointment
| | | | | |
Dividends from a stock insurance company are normally sent to
| | | | | | | | |
shareholders
|
Law of Large numbers
| | |
-insurance is based on the sharing of risks among a large group of people
| | | | | | | | | | | | |
-states that the larger the number of people, the more predictable the actual
| | | | | | | | | | | |
|losses will be
| |
-companies use this data to calculate rates
| | | | | |
Speculative risk |
-involves opportunity for either loss or gain
| | | | | |
-not covered by insurance companies
| | | |
, pure risk |
-a situation that can only result in a loss, there is no opportunity for financial gain
| | | | | | | | | | | | | | |
-only type of risk that is insurable
| | | | | |
treatment of risk through: avoidance | | | |
simply avoiding as many risks as possible
| | | | | | |
-effective but not always practical | | | |
treatment of risk through- reduction | | | |
since we cannot avoid risk entirely we often attempt to lessen the possibility of a
| | | | | | | | | | | | | |
loss by taking acting to reduce the risk
| | | | | | | |
-
treatment of risk through- sharing | | | |
when a group of individuals or businesses with similar exposures share the losses
| | | | | | | | | | | |
that occur within that group
| | | | |
-reciprocal insurance exchange is a formal risk sharing arrangement
| | | | | | | |
