XCEL LIFE INSURANCE
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?
Reserves
Which term describes the elimination of a hazard?
Risk Avoidance
The powers directly given to an agent in an agency contract are called
Express
For insurance purposes, similar objects which are exposed to the same group of perils are referred to as
Homogenous exposure units
A(n) agent may represent several insurers
Independent
Which of the following is NOT an example of risk retention?
Not doing a business deal after deciding it would be too risky
Which of the following accurately describes a participating insurance policy?
Policyowners may be entitled to recieve dividends
A business becoming incorporated is an example of risk
Transfer
The hold harmless clause is an example of risk
Transfer
Which of the following can be defined as a cause of loss?
Peril
Dividends from a mutual insurance company are paid to whom?
Policyholders
The law of large numbers enables insurers to
Predict losses
Which of the following outlines authority given to the producer on behalf of the insurer?
Producer Contract
Which of the following types of risk is insurable
Pure
An agents authority to bind an insurer to an insurance contract may be granted in the?
Agent's contract and the company's appointment
Which of these statements regarding insurance is false?
As the number of insured units increases, the number of losses decreases
Insurance is NOT characterized as which of the following?
As the number of insureds increase the number of losses decrease
A reciprical insurer typically has an administrator who manages the premiums collected from the groups members. This administrator is called a(n)
Attorney - in - fact
A(n) agent is an insurance agent who represents ONE insurance company
Captive
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?
Falcultative reinsurance
A condition that increases the potential for financial loss is a(n)
Hazard
Which of the following financial products creates an instant estate, no matter when the date of death?
Life insurance
Which of these does NOT indicate presence of insurable interest in a life insurance contract?
Life long friendship
Which of the following is a syndicate established by a group of insurers to share underwriting duties?
Lloyd's organization
Risk. Is the process of analyzing exposures that create risk and designing programs to handle them
Management
All of these correctly describe an aleatory contract EXCEPT
One party makes any kind of legally enforceable offer
What type of risk involves the potential for loss with no possibility for gain?
Pure Risk
Which of these statements is NOT a characteristic of the Law of Large Numbers?
Rates can be calculated to compensate for losses
Ambiguities in an insurance contract are typically interpreted in favor of the insured. The rule is referred to as
Reasonable expectations
Which of the following is an unincorporated association whose members provide coverage for one another?
Reciprical
Which of the following can be defined as "the potential for loss"
Risk
ABC is attempting to minimize the severity of potential losses within its company. The company is engaged in
Risk reduction
A group owned insurance company that is formed to assume and spread the liability risks of its members is known as a
Risk retention group
Which of the following describes the act of insuring a risk against possible loss?
Risk transfer
A stock insurance company is owned by its
Shareholders
Dividends from a stock insurance company are normally sent to
Shareholders
What type of risk involves the potential for loss AND the possibility for gain?
Speculative
Which one of these is not considered to be an element of insurable risk?
Speculative risk
Who regulates an insurer's claim settlement practices?
State insurance departments
Which group is the Do Not Call Registry designed to protect?
Telemarketers
Which of the following types of insurers limits the exposures it writes to those of its owners?
Captive insurer
According to the law of large numbers, how would losses be affected if the number of similar insured United increases
Predicability of losses will be improved
An insurer has a contractual agreement which transfers a portion of its risk exposure to another insurer. What type of contractual agreement is this?
Reinsurance contract
How can an insurance company minimize exposure to loss?
Reinsuring Risks
An insurable risk require
That the chance of loss be calculable
Under the law of agency the principal is considered to be
The insurer
An arrangement where an individual is authorized to act on behalf of another person or company is established through
The law of agency
Which of the following involves sharing an uncertain risk with another similar group
Transfer
Purchasing insurance is an example of risk
Transference
Which reinsurance contract between two insurers involves an automatic sharing of the risks assumed?
Treaty reinsurance
