1-BASIC PRINCIPLES OF LIFE HEALTH INSURANCE AND ANNUITIES

Which of these describes a participating insurance policy?

• Policy owners are entitled to receive dividends

• Policyowners pay assessment for company losses

• Stock companies allow their policyowners to share in any company earnings

• Policyowners are not entitled to vote a members of the board of directors

Answer explanation

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

• A stock insurer

• A mutual insurer

• The Life and Health Insurance Guaranty Association

Answer explanation

Dividends payable to a policyowner are

• Guaranteed

• declared by the State

• declared by the Insurance Company

• strictly regulated

Answer explanation

What type of reinsurance contract involves two companies automatically sharing their risk exposure?

• Arbitrage

• Facultative

• Excess

• Treaty

An Insurance applicant MUST be informed of an investigation regarding his/her reputation and character according to the:

• State Guaranty Association

• Fair Labor Standards Board

• Fair Credit Reporting Act

• National Association of Insurance Commissioners

Which of the following requires insurers to disclose when an applicant’s consumer or credit history is being investigated:

• 1970 - Fair Credit Reporting Act

• 1959 - Intervention by (SEC) The Securities and Exchange Commission

• 1999 – Financial Services Modernization Act

• 1945 – The McCarran-Ferguson Act

Who Elect the governing body of a mutual insurance company?

• Chairman of the board

• Bondholders

• Stockholders

• Policyholders

When a policy pays dividend to a policyholder, it is said to be

• profitable

• mutual

• nonparticipating

• participating

Which of these describe a participating Insurance policy?

• Policy owners are entitled to receive dividends

• Policyowners pay assessments for company losses

• Stock companies allow their policyowners to share in any company earnings

• Policyowners are entitled to vote for members of the board of directors

What is the name of the law that requires insurers to disclosure information gathering practices and where the information was obtain?

• State Guaranty Association

• Fair Labor Standards Board

• Fair Credit Reporting Act

• National Association of Insurance Commissioners