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Oklahoma Insurance Exam Questions and Answers
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Oklahoma Insurance Exam Questions and Answers
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Oklahoma Insurance Exam Questions and Answers.Life Insurance Answer- Transfers to a life insurance company the risk of financial loss to
an insurance company.
Health Insurance Answer- transfers to a health insurance policy the risk of financial loss resulting from illness, injury, disability of an insured person.
Risk Answer- Chance of loss: only pure risk is insurable.
Loss Answer- Unplanned reduction in economic value.
hazard Answer- a condition that increases the chance of a peril/setback/danger.
Risk Transfer Answer- Risk management role played by insurance.
Underwriting Answer- Assessing an applicant to determine insurability.
Law of Large Numbers Answer- Mathematical principle of probability underlying insurance.
Mutual Companies Answer- owned by policy owners
participating policies which pay policy dividends to their policy owners
may sell life/health insurance
Stock Companies Answer- DO NOT issue participating policies
Pay stock dividends to stockholders
Sell health/life
Home Service Companies Answer- issues industrial life insurance in small amounts
Ordinary Life Insurance Answer- Life insurance issued in face amounts of greater than 25k
Medical Care Service Providers Answer- blend features of insurance companies and medical care providers. Federal and State Government Insurance Programs Answer- Medicare
Social Security
Medicaid
Admitted vs. Non-admitted Answer- Refers to whether or not an insurer is approved or authorized to write business in this State.
Certificate of Authority
Insurance Providers Answer- Mutual Companies
Stock Companies
Home Service Companies
Ordinary Life Insurance
Medical Care Service Providers
Federal and State Government Programs
Admitted vs Non-Admitted
Insurance Producers Answer- Producers
Producers Authority
Cost Indexes
Required Disclosures
Producers 1 Answer- Must act in Good Faith and integrity in their dealings with both customers and Insurers.
Producers Authority Answer- 1. Express Authority: Defined in contract with insurer
2. Implied Authority: Understood to be a part of the job
3. Apparent Authority: Producer allows to exist, but not approved by insurer
Cost Indexes Answer- 1. L ins surrender cost index (future cash value withdrawal)
2. L ins Net Payment Cost Index (no cash value withdrawal)
Required Disclosures Answer- Buyers Guide explains the general features, benefits and
conditions of the type of ins being considered.
Loss Must be: Answer- 1. Defineable: time, place, location
2. Measurable: financial setback of the loss
3. Results from a peril: our of the insured's control
4. Part of a large group:
Risk Management involves: Answer- 1. Risk
2. Loss
3. Peril
4. Hazard
5. Exposure Two Types of Risk Answer- 1. Pure Risk
2. Speculative Risk
Pure Risk Answer- insurable
no chance of gain
untimely death
serious illness/disability
( definable, measurable, accidental,Large group, catastrophic).
Speculative Risk Answer- Results in loss or gain. NOT insurable
Two Kinds of Speculative Risk Answer- 1. Direct: immediate result of a loss or insured peril
2. Indirect: loss that results from a direct loss
Loss Exposure Answer- Subject to a possible loss: measured by EXPOSURE UNITS (the basis for a premium).
Exposure Units Answer- Insurance policies based on a number of Exposure Units: Basis for premiums
Peril Answer- A direct cause of a loss
Life Insurance Perils Answer- 1. death
2. disability
3. sickness
Hazard Answer- A condition that increases the chance./frequency of loss due to peril.
Three Types of Hazards Answer- 1. Moral: character weaknesses 2. Morale: State on mind indifference/ Disregarding ones health... not caring.
3. Physical Hazards: a. consuming excessive alcohol b. smoking c. reckless drug use * diabetes, emphysema
Risk Management Techniques (5) Answer- 1. Risk Avoidance
2. Risk Reduction
3. Risk Retention
4. Risk Sharing
5. Risk Transfer
Risk Avoidance Answer- a reasonable strategy- don't drive drunk
Risk Reduction Answer- Reduce exposure:
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