Assignment 6 - Classifications of Insurers

Which one of the following is a proprietary insurer? Select one: A. American Lloyds B. Mutual insurer C. National Flood Insurance Program D. Captive insurer

A. American Lloyds

Due to the possibility of an environmental pollution exposure resulting in extensive losses, several insurers in a particular state have joined together to insure the exposure. No single insurer was willing to insure the entire risk. This insurance arrangement is typical of Select one: A. An insurance pool. B. A cooperative. C. An insurance exchange. D. A reciprocal exchange.

A. An insurance pool.

The only unincorporated insurers permitted in most states are Select one: A. Reciprocal insurance exchanges. B. Alien insurers. C. Lloyds associations. D. Captive insurers.

A. Reciprocal insurance exchanges.

Pedro's Chemical Sprays (Pedro's) has been unable to obtain liability coverage for its products. Insurers consider Pedro's to be uninsurable. Pedro's risk manager, Johanna, believes that the company can cover and fund the losses. Which one of the following plans is Johanna considering for Pedro's? Select one: A. Insurance pool B. Captive C. Lloyd's of London D. Reciprocal insurance exchange

B. Captive

The two major types of insurers by legal form of ownership are Select one: A. Admitted and nonadmitted. B. Proprietary and cooperative. C. Direct writer and exclusive writer. D. Domestic and foreign.

B. Proprietary and cooperative.

Which one of the following consists of a series of private contracts in which subscribers or members of the group agree to insure each other? Select one: A. Mutual insurers B. Reciprocal insurance exchanges C. Residual market D. Pools

B. Reciprocal insurance exchanges

Insurance pools operate either as a syndicate or through Select one: A. Reciprocal insurers. B. Reinsurance. C. Surplus lines insurers. D. Stock insurers.

B. Reinsurance.

Because Janine has had many driving accidents due to her own carelessness, she has been unable to find private insurers willing to provide her with automobile insurance. In most states, Janine would be able to purchase auto liability insurance through a Select one: A. Reciprocal exchange. B. Residual market plan. C. Fraternal organization. D. Cooperative.

B. Residual market plan.

Which one of the following is an example of a cooperative insurer? Select one: A. An insurance exchange B. A stock insurer C. A mutual insurer D. A government insurer

C. A mutual insurer

Insurer A is a proprietary insurer that acts as an insurance marketplace. Its members underwrite any insurance or reinsurance purchased, and members are primarily partnerships or corporations with limited liability. Insurer A members belong to syndicates and delegate day-to-day operations to the syndicate manager. Insurer A is which one of the following? Select one: A. A mutual insurer B. A cooperative insurer C. An insurance exchange D. An American Lloyds insurer

C. An insurance exchange

Property-casualty insurers can be classified in which one of the following ways? Select one: A. Line of business B. Form of management C. Licensing status D. Financial rating

C. Licensing status

Which one of the following is not a type of insurance but a marketplace such as a stock exchange? Select one: A. Mutuals B. Cooperatives C. Lloyd's D. Reciprocals

C. Lloyd's

Which one of the following statements is true with regard to the various forms of ownership of property-casualty insurers? Select one: A. Stock insurance companies and mutual insurance companies are owned by the policyholders. B. The main reason that cooperative insurers are formed is to earn a profit for their owners. C. Lloyd's and insurance exchanges are each examples of an insurance marketplace. D. Most pools that are required by law are underwritten by state governments.

C. Lloyd's and insurance exchanges are each examples of an insurance marketplace.

Insurer Z is a large national insurer that provides low-cost insurance to its policyholders, who are the owners of Insurer Z. The insurer issues no common stock and has no stockholders. Its policyholders have voting rights, and they elect Insurer Z's board of directors. The board of directors appoints officers to manage the insurer. Insurer Z is a Select one: A. Insurance exchange. B. Reciprocal insurer. C. Mutual insurer. D. Proprietary insurer.

C. Mutual insurer.

Insurance pools operate either as a syndicate or through Select one: A. Reciprocal insurers. B. Cooperative exchanges. C. Reinsurance. D. Surplus lines insurers.

C. Reinsurance.

Which one of the following statements is true with regard to the various forms of ownership of property-casualty insurers? Select one: A. Stock insurance companies and mutual insurance companies are owned by the policyholders. B. The main reason that cooperative insurers are formed is to earn a profit for their owners. C. State and federal governments provide insurance for exposures that are significant but not commercially insurable. D. Most pools that are required by law are underwritten by state governments.

C. State and federal governments provide insurance for exposures that are significant but not commercially insurable.

Which one of the following types of insurers are the most prevalent in the United States? Select one: A. Government insurers B. Mutual insurers C. Stock insurers D. Captive insurers

C. Stock insurers

Juan has a poor driving record and has been unable to obtain auto liability coverage from private insurers. Auto liability coverage is mandatory in his state. Since affordability is a concern, Juan wants auto liability coverage only. Which one of the following is an option for Juan to obtain coverage? Select one: A. Obtain coverage through the state's reinsurance pool B. Obtain coverage through a fraternal organization C. Obtain coverage through a risk retention group D. Obtain coverage through his state's residual market

D. Obtain coverage through his state's residual market