Common sources of underwriting information for life and health insurance include all of the following EXCEPT A) the application. B) a physical examination. C) the Medical Information Bureau. D) the applicant’s income tax return. ANSWER Answer: D
Date: September 19th, 2020
As an alternative to demutualizing, Big Mutual Insurance Company reorganized itself into a corporate form that can directly or indirectly own a stock insurance company. This form of organization is called a(n) A) holding company. B) shell company. C) upstream company. D) downstream company. ANSWER Answer: A
Date: September 19th, 2020
Which of the following statements is (are) true about savings bank life insurance (SBLI)? I. Each depositor at the savings bank receives life insurance equal to his or her savings account balance. II. The goal of SBLI is to provide low-cost life insurance to consumers. A) I only B) II only C) both I and […]
Date: September 19th, 2020
David is a successful independent insurance agent. Recently, one of the life insurance companies with whom he places business offered him a special financial arrangement. If David meets sales targets, he will receive large bonuses. He will also be able to recruit and train sub-agents and receive an over-riding commission based on the amount of […]
Date: September 19th, 2020
R.I.P. Company manufactures herbicide and pesticide. The company had difficulty finding affordable liability insurance. R.I.P. established its own insurance company based in Bermuda for the purpose of insuring R.I.P.’s loss exposures. The company that R.I.P. formed is called a A) captive insurer. B) reciprocal insurer. C) fraternal insurer. D) holding company. ANSWER Answer: […]
Date: September 19th, 2020
ABC Insurance has always used the exclusive agency system to market coverages. ABC, however, cannot afford full-time agents in sparsely-populated areas. To reach customers in these areas, ABC enters into agreements with local independent agents. Using more than one marketing system is called employing a A) direct response system. B) general agency system. C) multiple […]
Date: September 19th, 2020
Which of the following statements is true with regard to career life insurance agents? A) They represent several different life insurance companies. B) They are compensated largely through a salary and not through commissions. C) They are paid the same commission rate on new and renewal business. D) The insurer provides financing, training, supervision, and […]
Date: September 19th, 2020
Scott works in property and liability insurance marketing. He legally represents insurance purchasers, rather than insurance companies. Scott is paid a commission on the insurance placed with insurers. Scott is a(n) A) exclusive agent. B) direct writer. C) branch manager. D) insurance broker. ANSWER Answer: D
Date: September 19th, 2020
Which of the following statements is true regarding independent insurance agents in property and liability insurance? A) The insurer owns the expiration rights, not the independent agent. B) Independent agents are only permitted to represent one insurance company. C) Independent agents are paid the same commission rate on new and renewal business. D) Independent agents […]
Date: September 19th, 2020
The leaders of a religious group decided to start a life insurance organization to insure members of the religious group. The insurer will operate as a nonprofit organization, thus receiving favorable tax treatment. The insurer formed will be a A) health maintenance organization. B) stock insurer. C) fraternal insurer. D) reciprocal exchange. ANSWER […]
Date: September 19th, 2020
