GA Life Insurance Exam Ch. 1

Who elects the governing body of a mutual insurance company?

• chairman of the board

• policyholders

• bondholders

• stockholders

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

• a stock insurer

• a mutual insurer

• the Life and Health Insurance Guaranty Association

What type of reinsurance contract involves two companies automatically sharing their risk exposure?

• treaty

• excess

• facultative

• arbitrage

Dividends payable to a policy owner are

• guaranteed

• declared by the state

• declared by the insurance company

• strictly regulated

A group-owned insurance company that is formed to assume and spread the liability risks of its members is known as a

• treaty insurer

• risk retention group

• risk assumption group

• captive insurer

When a policy pays dividends to its policyholders, it is said to be

• profitable

• mutual

• nonparticipating

• participating

What year was the McCarran-Ferguson Act enacted?

• 1944

• 1945

• 1946

• 1947

The stated amount or percentage of liquid assets that an insurer must have on hand that will satisfy future obligations to its policyholders is called

• credits

• reserves

• surplus

• retention

Which of the following requires insurers to disclose when an applicant's consumer or credit history is being investigated?

• 1970 Fair Credit Reporting Act

• 1959 Intervention by SEC

• 1999 Financial Services Modernization Act

• 1945 The McCarran-Ferguson Act

Which of these describe a participating insurance policy?

• Policy owners are not allowed to vote for members of the board of directors.

• Stock companies allow policy owners to share in any company earnings

• Policy owners are entitled to receive dividends

• Policy owners pay assessments for company losses