Life insurance part 1

Which of the following is an insurer established by a parent company for purpose of insuring the parent company's loss exposures?

Captive Insurer

What is a participating life insurance policy?

Contract that allows the policyowner to receive a share of surplus in the form of policy dividends

Which of the following is NOT a characteristic of reinsurance?

Increases the unearned premium reserved

Which of the following is a contract that involves one party which indemnifies another when a loss arises from an unknown event?

Insurance policy

Which of the following is NOT a benefit of insurance?

Losses due to fraud are eliminated

One important function of an insurance company is to identify and sell to potential customers. Which of these BEST describes this function?

Marketing

A participating company is also referred to as which type of insurer?

Mutual Insurer

An insurer owned by its policyholders is called a

Mutual insurer

John owns an insurance policy that gives him the right to share in the insurer's surplus. What kind of policy is this?

Participating

AAA insurance Company has transferred a portion of its loss exposure to BBB Insurance Company. In this reinsurance transaction, what is AAA Insurance Company called?

Primary Insurance

An insurer enters into a contract with a third party to insure itself against losses from insurance policies it issues. What is this agreement called?

Reinsurance

Which of the following is a type of insurance where an insurer transfers loss exposures from policies written for its insured?

Reinsurance

When a mutual insurer becomes a stock company, the process is called

Demutualization

Which of the following statements regarding a life insurance policy dividend is TRUE?

it is the distribution of excess of funds accumulated by the insurer on participating policies