Which of the following is considered a nonadmitted asset for an insurer? A) cash B) preferred stocks C) real estate D) office furniture ANSWER Answer: D
Date: September 19th, 2020
An insurance company chartered in another country has been licensed to operate in your state. In your state, the insurer would be considered a(n) A) nonadmitted insurer. B) foreign insurer. C) alien insurer. D) reciprocal insurer. ANSWER Answer: C
Date: September 19th, 2020
Which of the following statements about the regulation of insurance company investments is (are) true? I. The purpose of regulating insurance company investments is to prevent insurers from making unsound investments which could threaten their solvency. II. Life insurers can invest an unlimited amount of their assets in common stocks. A) I only B) II […]
Date: September 19th, 2020
Which of the following statements about the regulation of life insurance companies is (are) true? I. The percentage of assets a life insurance company may invest in a specific type of asset (e.g., stocks or bonds) is generally limited by law. II. The purpose of limiting the accumulation of surplus is to prevent an insurer […]
Date: September 19th, 2020
Which of the following statements about the use of risk-based capital requirements is (are) true? I. Insurers must have a certain amount of capital depending on the riskiness of their investments and insurance operations. II. Insurers may be required to take certain actions depending on how much capital they have relative to their risk-based capital […]
Date: September 19th, 2020
The policyholders’ surplus of an insurer is defined as the difference between its A) assets and its liabilities. B) premium income and its expenses. C) reserves and its liabilities. D) assets and its nonadmitted assets. ANSWER Answer: A
Date: September 19th, 2020
Which of the following statements about state insurance guaranty funds is (are) true? I. They limit the amount that policyholders can collect if an insurer becomes insolvent. II. They are usually funded by general revenues of the states. A) I only B) II only C) both I and II D) neither I nor II […]
Date: September 19th, 2020
The assets of a property and liability insurance company are primarily A) investments such as stocks and bonds. B) loss reserves. C) plant and equipment. D) premiums paid by policyholders. ANSWER Answer: A
Date: September 19th, 2020
Under one type of rate regulation, insurers do not have to register their rates with state regulatory authorities. However, insurers may be required to furnish rate schedules and supporting data to state officials. A fundamental assumption underlying this type of rating law is that market forces will determine the price and availability of insurance, rather […]
Date: September 19th, 2020
ABC Insurance Company’s investment income ratio last year was 4.2 percent. The company’s combined ratio last year was 102.6 percent. What was ABC’s overall operating ratio? A) 96.8 percent B) 98.4 percent C) 103.2 percent D) 106.8 percent ANSWER Answer: B
Date: September 19th, 2020
