Questions and Answers
Fraternal Benefit Society has each of the following characteristics EXCEPT?
Which of the following is NOT considered advertising?
What is a nonparticipating company sometimes called?
Stock insurer
What is the minimum penalty for a producer who obtains personal information about a client without a legitimate reason under the McCarran-Ferguson Act?
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An insurer's ability to make unpredictable payouts to policyowners is called?
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What is a plan called in which an employer pays insurance benefits from a fund derived from current revenues?
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What is the type of insurance where an insurer transfers loss exposures from policies written for its insureds?
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A nonparticipating policy will pay dividends.
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What is a participating life insurance policy?
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What does a contract that involves one party indemnifying another when a loss arises from an unknown event refer to?
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The distribution of excess funds accumulated by the insurer on participating policies is considered a life insurance policy dividend.
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What is a type of insurer that is owned by its policyowners called?
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What is an insurer established by a parent company for the purpose of insuring the parent company's loss exposures called?
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Why are dividends from a mutual insurer not subject to taxation?
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If a life insurance company has transferred some of its risk to another insurer, what is the insurer assuming the risk called?
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What is another name for a participating company?
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What do you call an insurer owned by its policyholders?
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The Do Not Call Registry offers exemptions for calls placed from all of the following EXCEPT?
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Whose claim settlement practices are regulated by?
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Study Notes
Fraternal Benefit Society
- Does not exist for profit, distinguishing it from other organizations.
Advertising in Insurance
- Ratings from services like A.M. Best are not classified as advertising.
Nonparticipating Company
- Also known as a stock insurer, does not share dividends with policyholders.
McCarran-Ferguson Act Penalties
- Accessing personal information without legitimate reason can incur a penalty of $10,000.
Insurer Liquidity
- Refers to an insurer’s ability to make unpredictable payouts to policyowners.
Self-Funded Insurance Plans
- Employers cover insurance benefits from a fund built from their current revenues.
Reinsurance
- A type of insurance allowing insurers to transfer loss exposures from their policies.
Nonparticipating Policies
- These policies do not provide dividends to policyholders.
Participating Life Insurance Policies
- Policies that allow policyowners to receive surplus shares as dividends.
Insurance Policies
- Contracts that indemnify one party for losses arising from unknown events.
Life Insurance Dividends
- The distribution of excess funds from participating policies back to policyowners.
Mutual Insurers
- Insurance companies owned by their policyowners.
Captive Insurers
- Insurers established by a parent company to cover its specific loss exposures.
Tax Treatment of Dividends
- Dividends from mutual insurers are not taxed as they are seen as returns of premium.
Reinsurers
- Companies that assume risk transferred from primary insurers.
Exemptions from Do Not Call Registry
- Exemptions do not include sales calls related to insurance.
Regulation of Claims Settlement
- Claim settlement practices of insurers are regulated by state insurance departments.
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Description
Prepare for your Life and Health Insurance exam with this comprehensive review quiz. Designed with flashcards to help you memorize key concepts and definitions, this quiz covers the essential principles of fraternal benefit societies, advertising in insurance, and types of insurers. Perfect for students and professionals looking to refresh their knowledge.
