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Insurance Guide Quiz
Insects and diseases
| Question | Answer |
|---|---|
| Commercial insurers are also known as? | Private insurance companies. |
| An insurance company selling more than one line of Insurance is known as a? | Multi-line insurer. |
| Commercial insurance is divided into 2 Main groups what are they? | Stock and Mutual Insurers. |
| Stock insurers are called? | Nonparticipating insurers. |
| The definition Mutualization is? | the process of converting a stock insurer into a mutual insurer. |
| Transformation Of a stock insurer Into a mutual insurer is called? | Termed mutualization. |
| Transformation of a mutual insurer into a stock insure is called? | Demutualization. |
| Mutual companies are owned by their? | Policyholders. |
| Mutual insurers are known as participating insurers because? | Policyholders participate in receiving dividends and electing the board of directors. |
| When declared, mutual company dividends are paid to? | The policyholders. |
| Dividends from a mutual insurer are not subject to taxation because? | The dividends are considered to be a return of premium. |
| If the policy owner chooses to sit and collect interest only the _____________ would be taxable. | Accumulated interest. |
| If a company operates as both a participating and nonparticipating insurer they are known as a? | Mixed insurer. |
| Dividends can never be guaranteed regardless of the type of ________ offering them. | Company. |
| Strong assessment mutual companies are classified by the way they? | Charge premium. |
| A pure assessment mutual company operates based on loss-sharing by? | Group members. |
| No premium is payable in advance for a pure assessment mutual company. Instead, each member is assessed an individual portion of? | Losses that occur. |
| An advance premium assessment mutual, charges a premium at the beginning of the? | Policy period. |
| If the original premiums exceed the operating expenses and losses of an advance premium assessment mutual? | The surplus is returned to the policyholders as dividends. |
| If total premiums are not enough to meet losses additional assessments are? | Levied against the members. |
| Normally, the amount of assessment that may be levied is limited either by state law or simply as a provision in the insurer's? | By-laws. |
| Fraternal benefit societies are special types of? | Mutual companies. |
| Fraternal benefit societies provide insurance to these types of societies and its members? | Nonprofit religious, ethnic or charitable organizations. |
| Fraternal must be formed for reasons other than obtaining insurance. An example of fraternal societies is? | Knights of Columbus. |
| Risk retention groups examples would be? | Pharmacist, dentist, and engineers. |
| Risk retention groups are mutual companies formed by a group of people in the same industry or? | Profession. |
| Service Providers offer benefits to subscribers in return for the pay0ment of a premium. These services are packaged into various plans, and those who purchase the plans are known as? | subscribers. |
| Examples of service providers are? | Health Maintenance Organizations (HMO) and Preferred Provider Organizations (PPO). |
| Reciprocal insurers are? | unincorporated groups of individual members that provide insurance for other members through indemnity contracts. Each member acts as both insurer and insured and are managed by Attorney in Fact. |
| Reinsurers make arrangements with other insurance companies to transfer a portion of their risk to the reinsurer. The company transferring the risk is called the? | Ceding Company and the company assuming the risk is the Reinsurer. |
| Captive Insurer is a? | insurer established and owned by the parent company to insure the parent company’s loss exposure. |
| Home Service Insurers (also known asindustrial insurance), issold by home service or debit life insurance companies. Face amounts are small; usually $1,000 to $2,000 and premiums are paid when? | Weekly. |
| Government Insurance: Federal and state government are also insurers. They provide social insurance programs, to help people who cannot afford the cost of incurring such losses themselves. Types of Government Insurance include? | • Social Security • Medicare, elderly. • Medicaid financially needy. • S.G.L.I. and V.G.L.I (Serviceman’s or Veteran’s Group Life Insurance: life insurance for members of the military) • Tri-Care (health insurance for members of the military. |
| Self-Insurers retain risks and must have a large number of similar risks and enough capital to pay claims. However, they may save money if the loss experience is? | lower than the expected costs. |
| Self-insurers are not a method of transferring risk, rather self-insurers establish their own self-funded plan to cover ________ losses. | Potential. |
| A Self-funded plan is a plan in which an employer? | pays insurance benefits from a fund derived from the employer’s current revenues. |
| Lloyd’s of London is not an insurance company. Members of the association form syndicates to underwrite and issue insurance- like coverage. This is a group of? | investors who share in unusual risk. |
| Distribution Systems are the ways insurance products are? | marketed and sold to the public. |
| Insurance can be purchased through licensed insurance producers, who are? | agents or brokers, or through a number of other ways. |
| Agents are either captive/career agents or independent agents. Captive agents work for only? | one insurer. |
| Independent agents work for themselves or for? | several insurers non- exclusively. |
| With the career agency system commercial insurers establish? | offices in certain locations. |
| Career agents are recruited to work at these locations. A general agent hires and trains new producers and supervises a number of other producers. All producers under the career agency system are? | captive agents and employees of the insurer. |
| Personal Producing General Agency System: With the personal producing general agency (PPGA)system, agents work for an independent agency selling policies from several insurance companies. Unlike the career agency system, agents are? | not employees of the insurance company. Instead, they work for the PPGA. Furthermore, personal producing general agents primarily sell insurance, instead of recruiting and training new agents as in the career agency system. |
| Independent Agency System (American Agency System): Independent agents represent a number of insurance companies under separate contractual agreements. Independent insurance agents have control and ownership over their clients’ accounts. This means? | The agents earn commissions on the sales they make and overrides on sales made by agents they manage. |
| Ffg | The insurer pays the branch manager's salary and pays him a bonus based on the amount and type of insurance sold and number of new agents hired. |
Created by:
josiahhumpleby