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RMIN 4000 Edmunds Exam 2 Questions and Answers 100% Accurate
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RMIN 4000 Edmunds Exam 2 Questions and Answers 100- Accurate
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RMIN 4000 Edmunds Exam 2 Questions and Answers100% Accurate
major types of private insurers - (correct answer) -Stock, Mutual, and Lloyd's of London
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stock insurers - (correct answer) -corporation owned by stockholders.
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objective is to earn profit for stockholders by increasing the value of the stock and paying dividends
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Mutual insurers - (correct answer) -a corporation owned by policyholders. profits are distributed to
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policyholders by dividends or rate reductions
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types of mutual insurers - (correct answer) -advance premium mutual, assessment mutual, and
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fraternal insurer
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assessment mutual - (correct answer) -insurer has the right to assess policyholders an additional
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amount if the insurer's financial operations are unfavorable
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advance premium mutual - (correct answer) -insurer does not issue assessable policies
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fraternal insurer - (correct answer) -a mutual insurer that provides life and health insurance to
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members of a social or religious organization
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Lloyd's of London - (correct answer) -The world's leading insurance market that provides services and
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physical facilities for its members to write specialized lines of insurance. They underwrite insurance for
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syndicates.
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Is Lloyd's of London an insurer? - (correct answer) -No
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Lloyd's of London brokers - (correct answer) -represent policyholders to arrange coverage with
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syndicates
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syndicates - (correct answer) -offer insurance contracts in the market
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who makes up a syndicate? - (correct answer) -members, managing agents, and underwriters
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, insurance agent - (correct answer) -Someone who legally represents the principal (insurance company)
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and has the authority to act on the principal's behalf
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Is the principal responsible for acts of an agent? - (correct answer) -Yes, when the agent is acting
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within the scope of authority
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Agent Binding Authority - (correct answer) -provide temporary insurance until the policy is actually
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written (typically with P&C, NOT life
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brokers - (correct answer) -someone who legally represents the insured, places appropriate coverage,
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is paid commission from insurer, and
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importance of large brokerage firms - (correct answer) -very important for commercial P&C, have
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knowledge of specialized markets, and provide risk management and loss-control services
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surplus lines broker - (correct answer) -"Wholesalers" who work with retail Agents and Brokers,
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licensed to place business with a "non admitted" insurer
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surplus lines - (correct answer) -any type of insurance for which there is no available market in the
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state
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non-admitted insurer - (correct answer) -an insurer not licensed to do business in the state
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independent agency distribution - (correct answer) -represent several unrelated insurers, agency owns
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expirations and renewal rights
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exclusive agency system - (correct answer) -the agent represents only one insurer or group of insurers
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under common ownership. agents do not own expirations or renewal rights to policies
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direct writer system - (correct answer) -an insurer in which the salesperson is an employee of the
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insurer, not an independent contractor. employees paid on "salary plus"
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direct response system - (correct answer) -Insurer sells directly to the consumer by television or some
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other media
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what are some methods to sell individual insurance policies to - (correct answer) -employer groups,
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labor unions, trade associations, college and university alumni, and others groups like AARP or AAA
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group insurance marketing - (correct answer) -Products are sold through group representatives
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employees who receive a salary and incentive payments based on sales (can pay for insurance by
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payroll deduction)
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what are the major insurance company operations? - (correct answer) -ratemaking, underwriting,
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production, claims settlement, reinsurance, and investments
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ratemaking - (correct answer) -the pricing of insurance and the calculation of insurance premiums
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