XCEL Solutions Exam Questions
Johns owns an insurance policy that gives him the right to share in the insurer's surplus.
What kind of policy is this? - Correct answer-Participating
A participating company is also referred to as which type of insurer? - Correct answer-
Mutual insurer
Which of the following is NOT a benefit of insurance? - Correct answer-LOSSES DUE
TO FRAUD ARE ELIMINATED
Reduces the uncertainty of loss
Makes a loss whole again
Source of investment funds
An insurer enters into a contract with a third party to insure itself against losses from
insurance policies it issues. What is this agreement called? - Correct answer-
Reinsurance
Which of the following is an insurer established by a parent company for the purpose of
insuring the parent company's loss exposures? - Correct answer-Captive insurer
Which of the following is a type of insurance where an insurer transfers loss exposures
from policies written for its insureds? - Correct answer-Reinsurance
AAA Insurance Company has transferred a portion of its loss exposure to BBB
Insurance Company. In this reinsurance transaction, what is AAA Insurance Company
called? - Correct answer-Primary insurer
An insurer owned by its policyholders is called a - Correct answer-Mutual insurer
One important function of an insurance company is to identify and sell to potential
customers. Which of these BEST describes this function? - Correct answer-Marketing
Which of the following is a contract that involves one party which indemnifies another
when a loss arises from an unknown event? - Correct answer-Insurance Policy
A situation in which there is ONLY a chance of loss or no loss is a - Correct answer-
Pure Risk
Which of the following is NOT an element of an insurable risk? - Correct answer-Loss
must be catastrophic
,An insurer having a large number of similar exposure units is considered important
because - Correct answer-the greater the number insured, the more accurately the
insurer can predict losses and set appropriate premiums
Which of the following is considered to be any situation that has the potential for loss? -
Correct answer-Loss exposure
Which of the following is any situation that presents the possibility of a loss? - Correct
answer-Loss exposure
All of the following circumstances must be met for loss retention to be an effective risk
management technique, EXCEPT - Correct answer-Probability of loss is unknown
Which of the following is NOT considered a definition of risk? - Correct answer-The
cause of a loss
Which of the following refers to a condition that may increase the chance of loss? -
Correct answer-Hazard
Which of the following is a situation where there is a possibility of either a loss or a
gain? - Correct answer-Speculative risk
Which of the following best describes the statement "The more times an event is
repeated, the more predictable the outcome becomes"? - Correct answer-Law of Large
numbers
Which of the following is NOT considered to be a definition of the term "loss"? - Correct
answer-Probability that an event will occur
Which of these statements correctly describes risk? - Correct answer-Pure risk is the
only insurable risk
A hazard can be best described as - Correct answer-a condition that may increase the
likelihood of a loss occuring
Which of the following describes the increase in the probability of a loss due to an
insured's dishonest tendencies? - Correct answer-Moral hazard
Which of the following would NOT be accomplished with the purchase of an insurance
policy? - Correct answer-Risk is eliminated
Which of the following statements correctly describes a contract of indemnity? - Correct
answer-One party is restored to the same financial position the party was in before the
loss occurred
, Which course of action is the insurer entitled to when deliberate concealment is
committed by the insured? - Correct answer-Rescinding the contract
Reasonably necessary acts that an agent must perform for carrying out his/her
expressly authorized duties are covered by an agent's - Correct answer-Implied
authority
Which of the following is NOT a requirement of a contact? - Correct answer--Parties
involved must be competent
-EQUAL CONSIDERATION IS REQUIRED BETWEEN THE INVOLVED PARTIES
-Contract must have a legal purpose
-Offer and acceptance must be involved
When handling premiums for an insured, an agent is acting in which capacity? - Correct
answer-Fiduciary
Which statement is CORRECT when describing a contract of adhesion? - Correct
answer-Contract may be accepted or rejected by the insured
Which of the following contracts is defined as "one that restores an injured party to the
condition that was present before the loss"? - Correct answer-Indemnity contract
Which of the following contracts is defined as "one that restores an injured party to the
condition that was present before the loss"? - Correct answer-
Which of the following contracts is defined as "one that restores an injured party to the
condition that was present before the loss"? - Correct answer-Indemnity contract
A contract requires - Correct answer-
Which of the following contracts is defined as "one that restores an injured party to the
condition that was present before the loss"? - Correct answer-Indemnity contract
A contract requires - Correct answer-
Who does a life settlement broker represent? - Correct answer-Individual wanting to sell
their life policy to a third party
What does the term "illustration" mean when used in the phrase "life insurance policy
illustration", according to the California Insurance Code? - Correct answer-Presentation
of policy features that includes non-guaranteed elements
When handling premiums for an insured, an agent is acting in which capacity? - Correct
answer-Fiduciary
Johns owns an insurance policy that gives him the right to share in the insurer's surplus.
What kind of policy is this? - Correct answer-Participating
A participating company is also referred to as which type of insurer? - Correct answer-
Mutual insurer
Which of the following is NOT a benefit of insurance? - Correct answer-LOSSES DUE
TO FRAUD ARE ELIMINATED
Reduces the uncertainty of loss
Makes a loss whole again
Source of investment funds
An insurer enters into a contract with a third party to insure itself against losses from
insurance policies it issues. What is this agreement called? - Correct answer-
Reinsurance
Which of the following is an insurer established by a parent company for the purpose of
insuring the parent company's loss exposures? - Correct answer-Captive insurer
Which of the following is a type of insurance where an insurer transfers loss exposures
from policies written for its insureds? - Correct answer-Reinsurance
AAA Insurance Company has transferred a portion of its loss exposure to BBB
Insurance Company. In this reinsurance transaction, what is AAA Insurance Company
called? - Correct answer-Primary insurer
An insurer owned by its policyholders is called a - Correct answer-Mutual insurer
One important function of an insurance company is to identify and sell to potential
customers. Which of these BEST describes this function? - Correct answer-Marketing
Which of the following is a contract that involves one party which indemnifies another
when a loss arises from an unknown event? - Correct answer-Insurance Policy
A situation in which there is ONLY a chance of loss or no loss is a - Correct answer-
Pure Risk
Which of the following is NOT an element of an insurable risk? - Correct answer-Loss
must be catastrophic
,An insurer having a large number of similar exposure units is considered important
because - Correct answer-the greater the number insured, the more accurately the
insurer can predict losses and set appropriate premiums
Which of the following is considered to be any situation that has the potential for loss? -
Correct answer-Loss exposure
Which of the following is any situation that presents the possibility of a loss? - Correct
answer-Loss exposure
All of the following circumstances must be met for loss retention to be an effective risk
management technique, EXCEPT - Correct answer-Probability of loss is unknown
Which of the following is NOT considered a definition of risk? - Correct answer-The
cause of a loss
Which of the following refers to a condition that may increase the chance of loss? -
Correct answer-Hazard
Which of the following is a situation where there is a possibility of either a loss or a
gain? - Correct answer-Speculative risk
Which of the following best describes the statement "The more times an event is
repeated, the more predictable the outcome becomes"? - Correct answer-Law of Large
numbers
Which of the following is NOT considered to be a definition of the term "loss"? - Correct
answer-Probability that an event will occur
Which of these statements correctly describes risk? - Correct answer-Pure risk is the
only insurable risk
A hazard can be best described as - Correct answer-a condition that may increase the
likelihood of a loss occuring
Which of the following describes the increase in the probability of a loss due to an
insured's dishonest tendencies? - Correct answer-Moral hazard
Which of the following would NOT be accomplished with the purchase of an insurance
policy? - Correct answer-Risk is eliminated
Which of the following statements correctly describes a contract of indemnity? - Correct
answer-One party is restored to the same financial position the party was in before the
loss occurred
, Which course of action is the insurer entitled to when deliberate concealment is
committed by the insured? - Correct answer-Rescinding the contract
Reasonably necessary acts that an agent must perform for carrying out his/her
expressly authorized duties are covered by an agent's - Correct answer-Implied
authority
Which of the following is NOT a requirement of a contact? - Correct answer--Parties
involved must be competent
-EQUAL CONSIDERATION IS REQUIRED BETWEEN THE INVOLVED PARTIES
-Contract must have a legal purpose
-Offer and acceptance must be involved
When handling premiums for an insured, an agent is acting in which capacity? - Correct
answer-Fiduciary
Which statement is CORRECT when describing a contract of adhesion? - Correct
answer-Contract may be accepted or rejected by the insured
Which of the following contracts is defined as "one that restores an injured party to the
condition that was present before the loss"? - Correct answer-Indemnity contract
Which of the following contracts is defined as "one that restores an injured party to the
condition that was present before the loss"? - Correct answer-
Which of the following contracts is defined as "one that restores an injured party to the
condition that was present before the loss"? - Correct answer-Indemnity contract
A contract requires - Correct answer-
Which of the following contracts is defined as "one that restores an injured party to the
condition that was present before the loss"? - Correct answer-Indemnity contract
A contract requires - Correct answer-
Who does a life settlement broker represent? - Correct answer-Individual wanting to sell
their life policy to a third party
What does the term "illustration" mean when used in the phrase "life insurance policy
illustration", according to the California Insurance Code? - Correct answer-Presentation
of policy features that includes non-guaranteed elements
When handling premiums for an insured, an agent is acting in which capacity? - Correct
answer-Fiduciary
