XCEL LIFE INSURANCE

A(n) insurer assumes risk from another insurance company

Reinsurance

What is the accounting measurement of an insurance company's future obligations to its policyowners?

Reserves

Which term describes the elimination of a hazard?

Risk Avoidance

The powers directly given to an agent in an agency contract are called

Express

For insurance purposes, similar objects which are exposed to the same group of perils are referred to as

Homogenous exposure units

A(n) agent may represent several insurers

Independent

Which of the following is NOT an example of risk retention?

Not doing a business deal after deciding it would be too risky

Which of the following accurately describes a participating insurance policy?

Policyowners may be entitled to recieve dividends

A business becoming incorporated is an example of risk

Transfer

The hold harmless clause is an example of risk

Transfer

Which of the following can be defined as a cause of loss?

Peril

Dividends from a mutual insurance company are paid to whom?

Policyholders

The law of large numbers enables insurers to

Predict losses

Which of the following outlines authority given to the producer on behalf of the insurer?

Producer Contract

Which of the following types of risk is insurable

Pure

An agents authority to bind an insurer to an insurance contract may be granted in the?

Agent's contract and the company's appointment

Which of these statements regarding insurance is false?

As the number of insured units increases, the number of losses decreases

Insurance is NOT characterized as which of the following?

As the number of insureds increase the number of losses decrease

A reciprical insurer typically has an administrator who manages the premiums collected from the groups members. This administrator is called a(n)

Attorney - in - fact

A(n) agent is an insurance agent who represents ONE insurance company

Captive

When a ceding insurer transfers a portion of its risk to an assuming insurer on a case by case basis, this process is referred to as?

Falcultative reinsurance

A condition that increases the potential for financial loss is a(n)

Hazard

Which of the following financial products creates an instant estate, no matter when the date of death?

Life insurance

Which of these does NOT indicate presence of insurable interest in a life insurance contract?

Life long friendship

Which of the following is a syndicate established by a group of insurers to share underwriting duties?

Lloyd's organization

Risk. Is the process of analyzing exposures that create risk and designing programs to handle them

Management

All of these correctly describe an aleatory contract EXCEPT

One party makes any kind of legally enforceable offer

What type of risk involves the potential for loss with no possibility for gain?

Pure Risk

Which of these statements is NOT a characteristic of the Law of Large Numbers?

Rates can be calculated to compensate for losses

Ambiguities in an insurance contract are typically interpreted in favor of the insured. The rule is referred to as

Reasonable expectations

Which of the following is an unincorporated association whose members provide coverage for one another?

Reciprical

Which of the following can be defined as "the potential for loss"

Risk

ABC is attempting to minimize the severity of potential losses within its company. The company is engaged in

Risk reduction

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

Which of the following describes the act of insuring a risk against possible loss?

Risk transfer

A stock insurance company is owned by its

Shareholders

Dividends from a stock insurance company are normally sent to

Shareholders

What type of risk involves the potential for loss AND the possibility for gain?

Speculative

Which one of these is not considered to be an element of insurable risk?

Speculative risk

Who regulates an insurer's claim settlement practices?

State insurance departments

Which group is the Do Not Call Registry designed to protect?

Telemarketers

Which of the following types of insurers limits the exposures it writes to those of its owners?

Captive insurer

According to the law of large numbers, how would losses be affected if the number of similar insured United increases

Predicability of losses will be improved

An insurer has a contractual agreement which transfers a portion of its risk exposure to another insurer. What type of contractual agreement is this?

Reinsurance contract

How can an insurance company minimize exposure to loss?

Reinsuring Risks

An insurable risk require

That the chance of loss be calculable

Under the law of agency the principal is considered to be

The insurer

An arrangement where an individual is authorized to act on behalf of another person or company is established through

The law of agency

Which of the following involves sharing an uncertain risk with another similar group

Transfer

Purchasing insurance is an example of risk

Transference

Which reinsurance contract between two insurers involves an automatic sharing of the risks assumed?

Treaty reinsurance