XCEL Chapter 1 - Basic Principles
A life insurance company has transferred some of its risk to another insurer. The insurer assuming the risk is called the
reinsurer; make transfer arrangements to another insurer.
Karen is a producer who has obtained personal information about a client without having a legitimate reason to do so. Under the McCarran-Ferguson Act, what is the minimum penalty for this?
$10,000
Ken is a producer who has obtained Consumer Information Reports under false pretenses. Under the Fair Credit Reporting Act, what is the maximum penalty that may be imposed on Ken?
$5,000
Which of the following is NOT considered advertising?
A rating from a rating service company, such as A.M. Best
A plan in which an employer pays insurance benefits from a fund derived(borrowed) from the employer's current revenues(pay) is called
A self-funded plan
Why are dividends from a mutual insurer not subject to taxation?
Because dividends are considered to be a return of premium
What is the primary purpose of a rating service company such as A.M Best?
Determine financial strength of an insurance company
Fraternal Benefit Society has each of the following characteristics EXCEPT
Exist For profit
A type of insurer that is owned by its policyowners is called
Mutual
What is considered to be the primary reason for buying life insurance?
Provide death benefits
An insurer's claim settlement practices are regulated by the
State insurance departments
The Do Not Call Registry offers exemptions for calls placed from all of the following EXCEPT
insurance sales calls because Insurance calls are not exempt from the no not call registry
An insurer's ability to make unpredictable payouts to policyowners is called
liquidity
A nonparticipating policy will
not pay dividends because policyholders do not participate in receiving dividends
What kind of life insurance policy issued by a mutual insurer provides a return of divisible surplus?
participating life insurance policy
The Fair Credit and Reporting Act's main purpose is to
protect consumers with guidelines regarding credit reporting and distribution
A nonparticipating company is sometimes called a(n)
stock insurer