Types of Insurers

Mutualization

A stock insurer becomes a mutual insurer

Which type of insurer/organization is in the business of insurance to make a profit?

Commercial

Which of the following is a common type of service provider?

Health Maintenance Organization

Which is not a characteristic of mutual insurers?

May transform into a stock insurer through the process called mutualization

Another term for a stock insurer is:

Nonparticipating

A mutual company pays dividends to:

Policyholders

Blue Cross Blue Shied is which type of insurer?

Service Provider

Service providers provide prepaid health care plans. Which of the following is not true about these providers?

Service providers are commercial organizations.

Which of the following insurers pays dividends?

Stock and mutual companies

A nonparticipating insurer is:

A stock insurer

Which of the following insurers cannot be categorized as commercial?

BlueCross BlueShield

The types of insurers who pay dividends include:

Both stock and mutual companies

Noncommercial organizations offer strictly:

Health insurance

BlueCross pays:

Hospital costs

An insurance company whose main responsibility is to make money for its policyholders is called a:

Mutual insurance company

What are the two distinct characteristics that distinguish mutual insurers from stock insurers?

Mutual insurers lack capital stock and profits are distributed among the members.

All of the following are false regarding mutual insurers, EXCEPT:

Mutual insurers, unlike stock insurers, are not governed by a board of directors. Mutual insurers pay dividends to stock holders. Mutual insurers are not required to be incorporated in most states. Mutual insurers are also referred to as participating insurers.

Mutual insurers are participating, which means:

Policyholders are paid dividends.

PQR only sells accident and health insurance policies, covering hospital, medical and surgical costs. PQR operates on a not-for-profit basis. Based on the information provided, PQR Insurer CANNOT be a:

Stock insurer

What statement is false regarding stock insurers?

Stock insurers are managed by a board of directors, who are chosen by the company stockholders.

What is the term used for an insured covered under a BlueCross BlueShield health plan?

Subscriber

The Mayflower Insurance Company is a stock insurance company. What is its operating objective?

To make a profit for stockholders

What is the term for profits distributed by mutual insurers to policyholders?

Dividends

Which of the following is true regarding dividends paid by mutual insurers?

Dividends are not taxable, but are considered a return of overcharged premium.

ABC company pays its stockholders dividends. ABC undergoes a change in company ownership and begins to pays its policyholders dividends, instead of its stockholders. What is the term that describes the transformation that ABC company has undergone?

Mutualization

Service providers are also known as which of the following?

Noncommercial Organizations

Which of the following insurers/organizations are not technically insurance companies?

Noncommercial organizations

Mutual companies pay dividends to which of the following in order to return overcharged premiums?

Policyholders

All of the following are providers of government insurance, EXCEPT:

TRICARE Medicare Medicaid Lloyd's