Finance

One provision of the Dodd-Frank Act was creation of the Financial Stab

One provision of the Dodd-Frank Act was creation of the Financial Stability Oversight Council. This council is charged with identifying nonbank financial companies that could increase the risk of collapse of the entire financial system. This risk is called A) market risk. B) systemic risk. C) diversifiable risk. D) enterprise risk.     ANSWER Answer: […]

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Date: September 19th, 2020

The Dodd-Frank Act created a federal body with some limited regulatory

The Dodd-Frank Act created a federal body with some limited regulatory authority. For example, the organization can represent the federal government in international negotiations regarding insurance and it can preempt state law where it conflicts with negotiated international agreements. This body is called the A) National Insurance Bureau. B) Federal Office of Insurance. C) Department […]

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Date: September 19th, 2020

The risk-based capital requirements for life insurers are based on a f

The risk-based capital requirements for life insurers are based on a formula that considers four types of risk. One risk reflects a range of uncertainties that life insurers face including such things as bad management decisions and guaranty fund assessments. This risk is called A) asset risk. B) insurance risk. C) interest rate risk. D) […]

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Date: September 19th, 2020

One method of ensuring the solvency of insurers is a periodic review,

One method of ensuring the solvency of insurers is a periodic review, every three to five years, of insurers that operate on a multistate basis. This review is coordinated by the NAIC. This review is called a(n) A) annual report. B) early warning system. C) field examination. D) inspection report.     ANSWER Answer: C

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Date: September 19th, 2020

The major argument in favor of an optional federal charter for insurer

The major argument in favor of an optional federal charter for insurers is that A) small insurers need a national charter to be competitive with large insurers. B) a federal charter will prevent insurer insolvencies. C) a federal charter will provide greater oversight of insurer market practices. D) national insurers are at a competitive disadvantage […]

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Date: September 19th, 2020

All of the following are arguments in favor of using an applicant’s cr

All of the following are arguments in favor of using an applicant’s credit record in personal lines underwriting EXCEPT A) Most consumers have good credit records and benefit when credit history is used as a rating factor. B) Use of credit data in underwriting and rating eliminates price discrimination against minority groups when they purchase […]

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Date: September 19th, 2020