Which of the following is a characteristic of a typical mass merchandising plan? A) higher commission scales for agents and higher administrative expenses B) payment of premiums through payroll deduction C) group rather than individual underwriting D) contributions by the employer to the cost of coverage ANSWER Answer: B
Why are some mutual insurers referred to as “assessment mutuals”? A) They charge low premiums because the loss exposures of their insureds are thoroughly assessed before a policy is written. B) They are noted for being very thorough in their assessment of investment opportunities. C) They are assessed for state premium taxes only if they […]
Which of the following statements about reciprocal exchanges is (are) true? I. Reciprocal exchanges usually specialize in health insurance. II. Reciprocal exchanges are unincorporated mutual insurance companies. A) I only B) II only C) both I and II D) neither I nor II ANSWER Answer: B
Which of the following statements about Lloyd’s of London is true? A) Coverage is actually written by syndicates who belong to Lloyd’s of London. B) New individual members or Names who belong to the various syndicates have unlimited legal liability. C) It operates as an admitted insurer throughout the United States. D) It allows underwriters […]
Which of the following statements about life insurance marketing systems is true? A) Insurance brokers are not permitted to sell life insurance. B) Some exclusive agents who market property and liability insurance also sell life insurance. C) Independent insurance agents are not permitted to market life insurance. D) Financial institutions such as banks are not […]
Temporary evidence of insurance until a policy is actually issued is provided by a(n) A) binder. B) brokerage agreement. C) pre-approval form. D) endorsement. ANSWER Answer: A
Neil needs insurance that is unavailable in the state where he lives. To obtain insurance from a nonadmitted insurer, Neil should contact a A) surplus lines broker. B) nonadmitted agent. C) general agency broker. D) direct writer. ANSWER Answer: A
Which of the following statements about insurance brokers is (are) true? I. They legally represent the insured rather than the insurance company. II. They are prohibited from being licensed as agents. A) I only B) II only C) both I and II D) neither I nor II ANSWER Answer: A
Advantages of the direct response system for marketing life insurance include which of the following? I. Advertising can be specifically directed to selected markets. II. Complex products can be easily sold. A) I only B) II only C) both I and II D) neither I nor II ANSWER Answer: A
Which of the following statements about the exclusive agency system for marketing property and liability insurance is true? A) Exclusive agents typically have complete ownership of policy expirations. B) A higher commission rate is usually paid on exclusive agents’ renewal business than on new business. C) Exclusive agents represent several different insurance companies. D) New […]
