RMI211 Practice Exam 3 Questions and Answers(A+ Solution guide)
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Course
RMI211
Institution
RMI211
A life insurance company based in Canada was licensed to operate in Massachusetts. When operating in
Massachusetts, the Canadian insurer is considered to be (a)
A. domestic insurer
B. captive insurer
C. foreign insurer
D. alien insurer - D
The major reasons for insurer insolvency include whic...
RMI211 Practice Exam 3
A life insurance company based in Canada was licensed to operate in Massachusetts. When operating in
Massachusetts, the Canadian insurer is considered to be (a)
A. domestic insurer
B. captive insurer
C. foreign insurer
D. alien insurer - D
The major reasons for insurer insolvency include which of the following:
I. Inadequate pricing and loss reserves
II. Rapid Growth and inadequate surplus
A. I only
B. II only
C. both I and II
D. Neither I norII - C
Which of the following is a principal method of insuring the solvency of insurers?
A. requiring submission of annual financial statements to state regulators
B. tracking and investing market conduct complaints against insurers
C. disciplining agents of the insurer for illegal sale practices
D. regulating the forms (applications and policies) employed by the insurer - A
The number of title insurance companies operating in State Z is relatively low. Recently, the largest of
these companies (50% market share) acquired the second largest company (30% market share).
, Immediately after the acquisition, the insurer raised premiums by 75%. This scenario demonstrates
which of the following rationales for the regulation of insurance?
A. maintain insurers solvency
B. prohibit unfair sales practice by agents
C. ensure reasonable rates
D. make insurance available - C
In which of the following did the Court decide insurance was interstate commerce when conducted
across state lines, and therefore was subject to federal regulation?
A. Paul v. Virginia
B. South-Eastern Underwriters Association case
C. McCarran-Ferguson Act
D. Financial Modernization Act - B
XYZ Mutual Insurance Company has total assets of $10 million. The policyholders' surplus is $2 million.
What are XYZ Mutual's total liabilities?
A. $4 million
B. $8 million
C. $10 million
D. $ 12 million - B
Mutual Property Insurance Company has a surplus of $2 million. According to a conservative rule, how
much in new net premiums can Mutual Property Insurance Company safely write?
A. $2 million
B. $8 million
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