Questions and Answers
An insurance applicant must be informed of an investigation regarding his/her reputation and character according to the?
Fair Credit Reporting Act
A nonprofit incorporated society that does not have capital stock and operates for the sole benefit of its members is known as?
A fraternal benefit society
At what point must a life insurance applicant be informed of their rights that fall under the Fair Credit Reporting Act?
Upon completion of the application
Which of these describe a participating life insurance policy?
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A group-owned insurance company that is formed to assume and spread the liability risks of its members is known as a?
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The stated amount or percent of liquid assets that an insurer must have on hand that will satisfy future obligations to its policyholders is called?
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Which of the following requires insurers to disclose when an applicant's consumer or credit history is being investigated?
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What type of reinsurance contract involves two companies automatically sharing their risk exposure?
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What is the name of the law that requires insurers to disclose information gathering practices and where the information was obtained?
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Who elects the governing body of a mutual insurance company?
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What year was the McCarran-Ferguson Act enacted?
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Study Notes
Insurance Legislation and Regulations
- The Fair Credit Reporting Act mandates that insurance applicants must be informed of any investigations into their reputation and character.
- Applicants must be informed of their rights under the Fair Credit Reporting Act upon completing their application.
- The Fair Credit Reporting Act, enacted in 1970, requires insurers to disclose when an applicant's consumer or credit history is being investigated and their information-gathering practices.
Types of Insurance Societies and Policies
- A fraternal benefit society is a nonprofit organization that operates solely for the benefit of its members and does not have capital stock.
- Participating life insurance policies allow policyholders to receive dividends, sharing in the profits of the insurance company.
- A risk retention group is a group-owned insurance company formed to spread liability risks among its members.
Insurance Financial Terminology
- Reserves refer to the required amount of liquid assets that an insurer must maintain to meet future obligations to policyholders.
- Reinsurance contracts can be categorized as treaty contracts, which involve automatic sharing of risk exposure between two companies.
Governance and Historical Legislation
- Policyholders are responsible for electing the governing body of a mutual insurance company.
- The McCarran-Ferguson Act was enacted in 1945, impacting the regulation of insurance companies and states' rights.
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Description
Test your knowledge on fundamental insurance principles with these flashcards. Questions cover important acts and types of insurance societies, essential for aspiring professionals in the field.
