Chapter 1
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