XCEL Chapter 1 (Life)

Which of the following is NOT a commercial insurer

Fraternal Company

Which of the following is NOT a benefit of insurance?

Losses due to fraud are eliminated

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

Mutual insurer

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

Participating

Liquidity

indicates a company's ability to make unpredictable payouts to policyowners.

Types of Insurance Companies

there are two classifications: private commercial and government.

Stock Companies - Nonparticipating

A stock insurance company is a private organization, organized and incorporated under state laws for the purpose of making a profit for its stockholders.

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

Captive insurer

Private Insurance Companies - Commercial

Commercial insurers offer many lines of insurance. Some sell primarily life insurance and annuities, while others sell accident and health insurance, or property and casualty insurance. Companies that sell more than one line of insurance are known as multi-line insurers

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 a contract that involves one party which indemnifies another when a loss arises from an unknown event?

Insurance contract

Which of the following statements is correct when comparing participating policies with non-participating policies?

Premiums for participating policies are usually higher than for non-participating policies

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

Reinsurance

The State Guaranty Association guarantees

that a claim will be paid if an insurer becomes insolvent

Reserves

the accounting measurement of an insurer's future obligations to its policyholders.