Chapter Exam (1)- Basic Principles of Life and Health Insurance and
Annuities
Nonprofit Organizations
What type of nonprofit organization operates without capital stock and benefits its members? Options:
a. Fraternal benefit society; b. Stock insurer; c. Mutual insurer; d. Life and Health I...
Chapter Exam (1)- Basic Principles of Life and Health Insurance and
Annuities
Nonprofit Organizations
What type of nonprofit organization operates without capital stock and benefits its members? Options:
a. Fraternal benefit society; b. Stock insurer; c. Mutual insurer; d. Life and Health Insurance Guaranty
Association
Answer: a. Fraternal benefit society
Reserves and Surplus
What term refers to the amount of liquid assets an insurer must have on hand to satisfy future
obligations to policyholders? Options: a. Credits; b. Reserve; c. Surplus; d. Retention
Answer: b. Reserve
Participating Life Insurance Policies
Which of the following describes a participating life insurance policy? Options: a. Policyowners pay
assessments for company losses; b. Policyowners are entitled to receive dividends; c. Stock companies
allow their policyowners to share in any company earnings; d. Policyowners are not entitled to vote for
members of the board of directors
Answer: b. Policyowners are entitled to receive dividends
Fair Credit Reporting Act
At what point must an applicant be informed of their rights under the Fair Credit Reporting Act?
Options: a. Before the appointment is scheduled; b. Upon completion of the application; c. At the
policy's delivery; d. When the insurer receives the MIB report
Answer: b. Upon completion of the application
Risk Management and Reinsurance
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