Which of the following statements about premium taxes is (are) true? I. They are levied by the federal government as a result of the McCarran-Ferguson Act. II. Their primary purpose is to provide funds for insurance regulation. A) I only B) II only C) both I and II D) neither I nor II […]
Date: September 19th, 2020
One life insurance company reserve is designed to smooth the company’s reported surplus over time by absorbing fluctuations in security prices that are not attributable to changing interest rates. This reserve is called the A) asset write-off reserve. B) reserve for amounts held on deposit. C) unearned premium reserve. D) asset valuation reserve. […]
Date: September 19th, 2020
By misrepresenting the true facts, Gretchen was able to convince someone to replace an existing life insurance policy with another company and to purchase a new policy from the company that Gretchen represents. Gretchen has engaged in an illegal sales practice called A) bait and switch. B) rebating. C) retaliating. D) twisting. ANSWER […]
Date: September 19th, 2020
Reasons for regulation of insurance include which of the following? I. Maintaining insurer solvency II. Ensuring reasonable rates A) I only B) II only C) both I and II D) neither I nor II ANSWER Answer: C
Date: September 19th, 2020
Under what type of rate regulation are insurers required to obtain approval of rates before using them if the rate change exceeds a specified predetermined range? A) flex-rating law B) prior-approval law C) file-and-use law D) use-and-file law ANSWER Answer: A
Date: September 19th, 2020
The basis for current state regulation of insurance is A) the McCarran-Ferguson Act. B) Paul v. Virginia. C) the South-Eastern Underwriters Association case. D) the National Association of Insurance Commissioners. ANSWER Answer: A
Date: September 19th, 2020
The right of the states to regulate the business of insurance was first established by A) the South-Eastern Underwriters Association case. B) the case of Paul v. Virginia. C) the Financial Modernization Act. D) the Sherman Act. ANSWER Answer: B
Date: September 19th, 2020
All of the following statements about the methods of regulating insurance are true EXCEPT A) All states have insurance laws that regulate the operations of insurers. B) Insurers are totally exempt from regulation by federal agencies and laws. C) The courts regulate insurance in many ways, including the interpretation of policy clauses and provisions. D) […]
Date: September 19th, 2020
An insurance company incorporated in another state 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: B
Date: September 19th, 2020
Which of the following statements about the licensing of insurance companies is (are) true? I. A new capital stock insurer must meet minimum capital and surplus requirements, which vary by state and line of insurance. II. The licensing requirements for insurance companies are less stringent than those imposed on most other types of firms. A) […]
Date: September 19th, 2020
