FLORIDA 240 LICENSE EXAM AND
PRACTICE EXAM NEWEST 2024
ACTUAL EXAM COMPLETE 300
QUESTIONS AND CORRECT DETAILED
ANSWERS
The stated amount or percent of liquid assets that an insurer must have on hand
that will satisfy future obligations to its policyholders is called: - ✔✔Reserves
An insurance applicant MUST be informed of an investigation regarding his/her
reputation and character according to the: - ✔✔Fair Credit Reporting Act
A nonprofit incorporated society that does not have capital stock and operates
for the sole benefit of its members is known as: - ✔✔A fraternal benefit society
What I the name of the law that requires insurers to disclose information
gathering practices and where the information was obtained? - ✔✔Fair Credit
Reporting Act
Who elects the governing body of a mutual insurance company? -
✔✔Policyholders
A group-owned insurance company that is formed to assume and spread the
liability ricks of its members is known as a: - ✔✔Risk retention group
1|Page
©JOSHCLAY 2025/2026. YEAR PUBLISHED 2025.
,What type of reinsurance contract involves two companies automatically
sharing their risk exposure? - ✔✔treaty
What year was the McCarran-Ferguson Act enacted? - ✔✔1945
Which of these describe a participating life insurance policy? - ✔✔Policy owners
are entitled to receive dividends
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
Which of the following requires insurers to disclose when an applicant's
consumer or credit history is being investigated: - ✔✔1970 - Fair Credit
Reporting Act
What type of reinsurance contract involves two companies automatically
sharing their risk exposure? - ✔✔Treaty
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
All of the following are considered to be typical characteristics describing the
nature of an insurance contract, EXCEPT: - ✔✔Bilateral
The part of a life insurance policy guaranteed to be true is called a(n) -
✔✔warranty
2|Page
©JOSHCLAY 2025/2026. YEAR PUBLISHED 2025.
,Statements made on an insurance application that are believed to be true to the
best of the applicant's knowledge are called - ✔✔representations
Q purchases a $500,000 life insurance policy and pays $900 in premiums over
the first six months. Q dies suddenly and the beneficiary is paid $500,000. This
exchange of unequal values reflects which of the following insurance contract
features? - ✔✔Aleatory
When must insurable interest be present in order for a life insurance policy to
be valid? - ✔✔When the application is made
A life insurance arrangement which circumvents insurable interest statutes is
called: - ✔✔Investor-Originated Life Insurance
Stranger Originated Life Insurance (STOLI) has been found to be in violation of
which of the following contractual elements? - ✔✔Legal Purpose (Insurable
Interest)
Who makes the legally enforceable promises in a unilateral contract? -
✔✔Insurance company
A policy of adhesion can only be modified by whom? - ✔✔insurance company
3|Page
©JOSHCLAY 2025/2026. YEAR PUBLISHED 2025.
, When third-party ownership is involved, applicants who also happen to be the
stated primary beneficiary are required to have: - ✔✔insurable interest in the
proposed insured
Which of these is considered a statement that is assured to be true in every
aspect? - ✔✔Warranty
Which of these require an offer, acceptance, and consideration? - ✔✔contract
If a contract of adhesion contains complicated language, to whom would the
interpretation be in favor of? - ✔✔insured
Insurance contracts are known as _____ because certain future conditions or
acts must occur before any claims can be paid. - ✔✔conditional
Insurance policies are offered on a "take it or leave it" basis, which make them:
- ✔✔Contracts of Adhesion
In regards to representations or warranties, which of these statements is TRUE?
- ✔✔If material to the risk, false representations will void a policy
Which of these arrangements allows one to bypass insurable interest laws? -
✔✔Investor-Originated Life Insurance
In an insurance contract, the insurer is the only party who makes a legally
enforceable promise. What kind of contract is this? - ✔✔unilateral
4|Page
©JOSHCLAY 2025/2026. YEAR PUBLISHED 2025.
PRACTICE EXAM NEWEST 2024
ACTUAL EXAM COMPLETE 300
QUESTIONS AND CORRECT DETAILED
ANSWERS
The stated amount or percent of liquid assets that an insurer must have on hand
that will satisfy future obligations to its policyholders is called: - ✔✔Reserves
An insurance applicant MUST be informed of an investigation regarding his/her
reputation and character according to the: - ✔✔Fair Credit Reporting Act
A nonprofit incorporated society that does not have capital stock and operates
for the sole benefit of its members is known as: - ✔✔A fraternal benefit society
What I the name of the law that requires insurers to disclose information
gathering practices and where the information was obtained? - ✔✔Fair Credit
Reporting Act
Who elects the governing body of a mutual insurance company? -
✔✔Policyholders
A group-owned insurance company that is formed to assume and spread the
liability ricks of its members is known as a: - ✔✔Risk retention group
1|Page
©JOSHCLAY 2025/2026. YEAR PUBLISHED 2025.
,What type of reinsurance contract involves two companies automatically
sharing their risk exposure? - ✔✔treaty
What year was the McCarran-Ferguson Act enacted? - ✔✔1945
Which of these describe a participating life insurance policy? - ✔✔Policy owners
are entitled to receive dividends
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
Which of the following requires insurers to disclose when an applicant's
consumer or credit history is being investigated: - ✔✔1970 - Fair Credit
Reporting Act
What type of reinsurance contract involves two companies automatically
sharing their risk exposure? - ✔✔Treaty
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
All of the following are considered to be typical characteristics describing the
nature of an insurance contract, EXCEPT: - ✔✔Bilateral
The part of a life insurance policy guaranteed to be true is called a(n) -
✔✔warranty
2|Page
©JOSHCLAY 2025/2026. YEAR PUBLISHED 2025.
,Statements made on an insurance application that are believed to be true to the
best of the applicant's knowledge are called - ✔✔representations
Q purchases a $500,000 life insurance policy and pays $900 in premiums over
the first six months. Q dies suddenly and the beneficiary is paid $500,000. This
exchange of unequal values reflects which of the following insurance contract
features? - ✔✔Aleatory
When must insurable interest be present in order for a life insurance policy to
be valid? - ✔✔When the application is made
A life insurance arrangement which circumvents insurable interest statutes is
called: - ✔✔Investor-Originated Life Insurance
Stranger Originated Life Insurance (STOLI) has been found to be in violation of
which of the following contractual elements? - ✔✔Legal Purpose (Insurable
Interest)
Who makes the legally enforceable promises in a unilateral contract? -
✔✔Insurance company
A policy of adhesion can only be modified by whom? - ✔✔insurance company
3|Page
©JOSHCLAY 2025/2026. YEAR PUBLISHED 2025.
, When third-party ownership is involved, applicants who also happen to be the
stated primary beneficiary are required to have: - ✔✔insurable interest in the
proposed insured
Which of these is considered a statement that is assured to be true in every
aspect? - ✔✔Warranty
Which of these require an offer, acceptance, and consideration? - ✔✔contract
If a contract of adhesion contains complicated language, to whom would the
interpretation be in favor of? - ✔✔insured
Insurance contracts are known as _____ because certain future conditions or
acts must occur before any claims can be paid. - ✔✔conditional
Insurance policies are offered on a "take it or leave it" basis, which make them:
- ✔✔Contracts of Adhesion
In regards to representations or warranties, which of these statements is TRUE?
- ✔✔If material to the risk, false representations will void a policy
Which of these arrangements allows one to bypass insurable interest laws? -
✔✔Investor-Originated Life Insurance
In an insurance contract, the insurer is the only party who makes a legally
enforceable promise. What kind of contract is this? - ✔✔unilateral
4|Page
©JOSHCLAY 2025/2026. YEAR PUBLISHED 2025.
