New Mexico Health And Life Insurance Exam Q
Correct Answers
risk c- cCORRECT cANS✔✔Risk
Uncertainty cof cfinancial closs cor ca cchance cof closs c- cCORRECT cANS✔✔
hazard c- cCORRECT cANS✔✔A chazard cis ca ccondition cthat cmakes ca cperil cmore clikely cto chappe
cseriousness cof ca closs
hazard c- cCORRECT cANS✔✔Any cfactor cthat cgives crise cto cperil
peril c- cCORRECT cANS✔✔cause cof closs
Peril c- cCORRECT cANS✔✔And cimmediate cspecific cevent ccausing closs cin cgiving crise cto crisk
Physical cHazard c- cCORRECT cANS✔✔Arises cfrom cmaterial cstructural cfor coperational cfeatures c
cunsanitary cconditions
Moral chazard c- cCORRECT cANS✔✔Arises cfrom cpeople's chabits cand cvalues csuch cas cfiling ca cf
Morale cHazard c- cCORRECT cANS✔✔Arises cfrom chuman ccarelessness cor ca cresponsibility csuch
cprecaution
exposure c- cCORRECT cANS✔✔
loss c- cCORRECT cANS✔✔Last cmust cbe cmeasurable, cthe cinsurer cmust cbe cable cto cplace ca csp
Methods cof cHandling cRisk c- cCORRECT cANS✔✔Avoidance
Retention
Sharing
Reduction
TransferAvoidance
, Stock cinsurance ccompanies c- cCORRECT cANS✔✔may cissue cnon- cparticipating cpolicies, cstockh
cpolicy cowner.Stockholders/shareholders cown cshares cin cthe ccompany ca cstock ccompany cis crefe
ccompany cbecause cthey cdo cnot cparticipate cin cdividends cresulting cfrom cstock cownership.
Mutual cinsurance ccompanies c- cCORRECT cANS✔✔owned cby cpolicyholdersFunds cnot cpaid cout
coperating ccosts care creturned cto cthe cpolicy cowners cin cthe cform cof cpolicy cdividends. cMutual cco
cparticipating ccompanies cbecause cthe cpolicy cowner cis cparticipate cin cdividends.
Fraternal cinsurers c- cCORRECT cANS✔✔Fraternal cbenefit csocieties care cprimarily clife cinsurance
corganizations cand cusually cengage cin ccharitable cand cbenevolent cactivities. c
Fraternal cinsurers care cdistinguished cby cthe cfact cthat ctheir cmembership cis cusually cdrawn cfrom c
cof ca clodge cor cfraternal corganization. c
One ccharacteristic cof cfraternal clife cinsurance cis cthe copen ccontract, cwhich callows cfraternal cinsu
cpolicyholders cin ctimes cof cfinancial cdifficulty.
Risk cRetention cGroup c(RRG) c- cCORRECT cANS✔✔Groups cwhere cthe cmembers cinsure ceach c
cto cwrite cinsurance cpolicies.These cgroups cmay conly cprovide cliability cinsurance cnot cworkers cco
cinsurance
The cUnited cStates cgovernment cas cinsurer c- cCORRECT cANS✔✔Provides cinsurance cbenefits cs
clife cinsurance cbenefits cfederal cEmployee ccompensation cbenefits cand cvarious cretirement cbenef
Private cversus cgovernment cinsurers c- cCORRECT cANS✔✔
Authorized c(admitted)versus cunauthorized c(nonadmitted)insurers c- cCORRECT cANS✔✔And cinsu
cauthority cfrom cthe cstate cinsurance cdepartment cto ctransact cbusiness cwithin ca cstate. cAn cauthor
cand censure cthat cis centitled cto ctransact cwith cin cthe cstate chaven't ccomplied cwith cthe claw cand cs
ctransacting cinsurance
Insurer's cDomicile c- cCORRECT cANS✔✔Domestic cinsurers-a ccompany cis ca cdomestic cinsurer ci
cincorporated
Foreign cinsurer-A ccompany cwho cis clicensed cto cconduct cbusiness cin cstate cother cthan cthe cone
Alien cinsurer-Companies cInc. cin ca ccountry cother cthan cthe cUnited cStates cDC cor cterritory
Financial cStatus c(Independent cRating cServices) c- cCORRECT cANS✔✔AM cBest
Fitch
Standard cand cPoor's
Moody's
Weiss
Six ctypes cof cinsurance c- cCORRECT cANS✔✔Property cinsurance
Casualty cinsurance
Annuity
Accident cand chealth cor csickness
Variable clife cand cvariable cannuity cproducts
Credit cinsurance
Marketing c(Distribution) cSystems c- cCORRECT cANS✔✔4 cbasic cdistribution csystems cused cto cm
Insurer ccontracts cwith cindepend cagents cto crepresent c& csell cfor conly cthat cinsurance ccomp, cTyp
cbasis. c- cInsurance ccompany cowns c& ccontrol call caccounts, cpolicy crecords, c& crenewals. c▬Dire
cis can cemployee cof cthe ccomp, cmay cbe cpaid ca csalary, ccommission cor cboth. c- cInsurance ccomp
cpolicy crecords, cand crenewals. c▬Direct cresponse: c-This csystem cdoes cnot cuse cagents, cbut cins
cmail cor ctelemarketing. c-Insurance ccomp cowns c& ccontrols call caccounts, cpolicy crecords, cand cre
Correct Answers
risk c- cCORRECT cANS✔✔Risk
Uncertainty cof cfinancial closs cor ca cchance cof closs c- cCORRECT cANS✔✔
hazard c- cCORRECT cANS✔✔A chazard cis ca ccondition cthat cmakes ca cperil cmore clikely cto chappe
cseriousness cof ca closs
hazard c- cCORRECT cANS✔✔Any cfactor cthat cgives crise cto cperil
peril c- cCORRECT cANS✔✔cause cof closs
Peril c- cCORRECT cANS✔✔And cimmediate cspecific cevent ccausing closs cin cgiving crise cto crisk
Physical cHazard c- cCORRECT cANS✔✔Arises cfrom cmaterial cstructural cfor coperational cfeatures c
cunsanitary cconditions
Moral chazard c- cCORRECT cANS✔✔Arises cfrom cpeople's chabits cand cvalues csuch cas cfiling ca cf
Morale cHazard c- cCORRECT cANS✔✔Arises cfrom chuman ccarelessness cor ca cresponsibility csuch
cprecaution
exposure c- cCORRECT cANS✔✔
loss c- cCORRECT cANS✔✔Last cmust cbe cmeasurable, cthe cinsurer cmust cbe cable cto cplace ca csp
Methods cof cHandling cRisk c- cCORRECT cANS✔✔Avoidance
Retention
Sharing
Reduction
TransferAvoidance
, Stock cinsurance ccompanies c- cCORRECT cANS✔✔may cissue cnon- cparticipating cpolicies, cstockh
cpolicy cowner.Stockholders/shareholders cown cshares cin cthe ccompany ca cstock ccompany cis crefe
ccompany cbecause cthey cdo cnot cparticipate cin cdividends cresulting cfrom cstock cownership.
Mutual cinsurance ccompanies c- cCORRECT cANS✔✔owned cby cpolicyholdersFunds cnot cpaid cout
coperating ccosts care creturned cto cthe cpolicy cowners cin cthe cform cof cpolicy cdividends. cMutual cco
cparticipating ccompanies cbecause cthe cpolicy cowner cis cparticipate cin cdividends.
Fraternal cinsurers c- cCORRECT cANS✔✔Fraternal cbenefit csocieties care cprimarily clife cinsurance
corganizations cand cusually cengage cin ccharitable cand cbenevolent cactivities. c
Fraternal cinsurers care cdistinguished cby cthe cfact cthat ctheir cmembership cis cusually cdrawn cfrom c
cof ca clodge cor cfraternal corganization. c
One ccharacteristic cof cfraternal clife cinsurance cis cthe copen ccontract, cwhich callows cfraternal cinsu
cpolicyholders cin ctimes cof cfinancial cdifficulty.
Risk cRetention cGroup c(RRG) c- cCORRECT cANS✔✔Groups cwhere cthe cmembers cinsure ceach c
cto cwrite cinsurance cpolicies.These cgroups cmay conly cprovide cliability cinsurance cnot cworkers cco
cinsurance
The cUnited cStates cgovernment cas cinsurer c- cCORRECT cANS✔✔Provides cinsurance cbenefits cs
clife cinsurance cbenefits cfederal cEmployee ccompensation cbenefits cand cvarious cretirement cbenef
Private cversus cgovernment cinsurers c- cCORRECT cANS✔✔
Authorized c(admitted)versus cunauthorized c(nonadmitted)insurers c- cCORRECT cANS✔✔And cinsu
cauthority cfrom cthe cstate cinsurance cdepartment cto ctransact cbusiness cwithin ca cstate. cAn cauthor
cand censure cthat cis centitled cto ctransact cwith cin cthe cstate chaven't ccomplied cwith cthe claw cand cs
ctransacting cinsurance
Insurer's cDomicile c- cCORRECT cANS✔✔Domestic cinsurers-a ccompany cis ca cdomestic cinsurer ci
cincorporated
Foreign cinsurer-A ccompany cwho cis clicensed cto cconduct cbusiness cin cstate cother cthan cthe cone
Alien cinsurer-Companies cInc. cin ca ccountry cother cthan cthe cUnited cStates cDC cor cterritory
Financial cStatus c(Independent cRating cServices) c- cCORRECT cANS✔✔AM cBest
Fitch
Standard cand cPoor's
Moody's
Weiss
Six ctypes cof cinsurance c- cCORRECT cANS✔✔Property cinsurance
Casualty cinsurance
Annuity
Accident cand chealth cor csickness
Variable clife cand cvariable cannuity cproducts
Credit cinsurance
Marketing c(Distribution) cSystems c- cCORRECT cANS✔✔4 cbasic cdistribution csystems cused cto cm
Insurer ccontracts cwith cindepend cagents cto crepresent c& csell cfor conly cthat cinsurance ccomp, cTyp
cbasis. c- cInsurance ccompany cowns c& ccontrol call caccounts, cpolicy crecords, c& crenewals. c▬Dire
cis can cemployee cof cthe ccomp, cmay cbe cpaid ca csalary, ccommission cor cboth. c- cInsurance ccomp
cpolicy crecords, cand crenewals. c▬Direct cresponse: c-This csystem cdoes cnot cuse cagents, cbut cins
cmail cor ctelemarketing. c-Insurance ccomp cowns c& ccontrols call caccounts, cpolicy crecords, cand cre
