TranAmerica Chapter 1

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

And insurance policy; is a contract where one party promises to indemnifies another against loss that arises from an unknown event.

Which of the following is not a benefit of insurance?

Losses due to fraud or in laminated: it's not a benefit of insurance.

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

Marketing: can we best defined as identifying and selling to potential customers.

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

Mutual insurance: a mutual insurance is also referred to as a participating company.

And insurer owned by its policyholders is called?

Mutual insurer: a mutual insurer is owned by its policy holders.

What is a participating life insurance and policy?

A participating life insurance policy is defined as a contract that allows the policy owner to receive a share of surplus in the form of policy dividends.

AAA insurance company has transferred a portion of this loss exposure to BBB insurance company. This reassurance transaction what is AAA insurance company called?

Primary insurance: any reassuring agreement, the insurance company that transfer it's loss exposure to another insurer is called the primary insurer.

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

Reassurance: reassurance is the arrangement by which an insurance company transfers a portion of a risk it has assumed to another insurance.

And insurer enters into a contract with a third-party to ensure itself against losses from insurance policies it issues. What is the agreement called?

Reinsurance: reinsurance is an arrangement by which an insurance company transfers a portion of a risk it has assumed to another insurance.

When a mutual insurance becomes a stock company, the process is called?

The Demutualization: the process whereby a mutual insurance because the stock company is called the Demutualization.