Chapter 1

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

captive

An agent's authority to bind an insurer to an insurance contract may be granted in the

Agent's contract and the insurance company's appointment

Insurance is NOT characterized as which of the following?

As the number of insured increase the number of losses decrease

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

Captive insurer

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

Life insurance

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

Reciprocal

which of the following is NOT an objective of the National Association of Insurance Commissioners?

Regulate state insurance commissioners

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?

Reserve

Which group is the Do Not Call registry designed to protect against?

Telemarketers

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

facultative reinsurance

A(n) ______ agent may represent several insurers.

independent

Stock companies

make a profit for its stockholders

Mutual companies are owned by

policy holders

which of the following accurately describes a participating insurance policy?

policyowners may be entitled to receive dividends.

Multi- line insurer

selling more than 1 line of insurance

A stock insurance company is owned by its

shareholders

Dividends from a stock insurance company are normally sent to

shareholders

nonparticipating insurers

stock insurer

stock dividends are paid to

stockholders

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

treaty reinsurance

A reciprocal insurer typically has an administrator who manages the premuims collected from the group's members. this administrator is called

Attorney-in-fact

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

Lloyd's Organization

Dividends from a mutual insurance company are paid to whom?

Policyholders

Commercial Insurer

Private insurance companies (sell insurance for a profit)

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

Producer Contract

A group owned insurance company that is formed to assume and spread the liability risks of its members is known as

Risk retention group

Who regulates an insurer's claim settlement practices?

State insurance departments


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