LI Part 1

The stated amount or percent of liquid that an insurer must have on hand that will satisfy future obligations to its policy holders is called

• credits

• reserves

• surplus

• retention

A nonprofit incorporated society that does not have capital stock and operates for the sole benefit of its members is known as

• 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 share their risk exposure?

• arbitrage

• facultative

• excess

• treaty

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

• captive insurer

An insurance applicant Must be informed of an investigation regarding his/her reputation and character according this

• State Guaranty Association

• Fair Labor Standards Board

• Fair Credit Reporting Act

• National Association of Insurance Commissioners

Who elects the governing body of a mutual insurance company?

• chairman of the board

• bond holders

• stock holders

• policy holders

What is the name of the law that requires insurers to disclose information gathering practices and where the information was obtained?

• State Guaranty Association

• Fair Labor Standards Act

• Fair Credit Reporting Act

• National Association of Insurance Company

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

• 1970 Fair Credit Reporting Act

• 1959 Intervention by the Securities and Exchange Commission

• 1999 Financial Services Modernization Act

• 1945 The McCarrant-Ferguson Act

At what point must a life insurance applicant be informed of their rights that fall under the Fair Reporting Act?

• Before the appointment is scheduled

• Upon the completion of application

• at the policy's delivery

• When the insurer receives the MIB report

Which of these describe a participating life insurance policy?

• Policyowners are entitled to receive dividends

• Policyowners pay assessments for company losses

• Stock companies allow their policyowners to share in any company earnings

• Policyowners are not entitled to vote for members of the board of directors