CA LIFE EXAM – PSI QUESTIONS AND ANSWERS LATEST UPDATE

A participating company is also referred to as which type of insurer? - Answer- Mutual insurer An insurer owned by its policyholders, is called a - Answer- Mutual insurer What is a participating life insurance policy? - Answer- Contract that allows the policyowner to receive a share of surplus in the form of policy dividends An insurer enter into a contract with a third-party to ensure itself against losses from insurance policies it issues. What is this agreement called? - Answer- Reinsurance John owns an insurance company that gives him the right to share and then sure surplus. What kind of policy is this? - Answer- Participating Which of the following is not a characteristic of reinsurance? - Answer- Increases the unearned premium reserved Which of the following is not a benefit of insurance? - Answer- Losses due to fraud are eliminated When a mutual insurer becomes a stock company, the process is called - Answer- Demutualization Which of the following is a contract that involves one party which indemnifies another one a loss arises from an unknown event? - Answer- Insurance policy Which of the following is an insurer established by a parent company's loss exposure's? - Answer- Captive insurers Which of the following is not considered to be a definition for the term "loss"? - Answer- Probability that an event will occur Which of the following is not considered a definition of a risk? - Answer- The cause of loss Which of the following best describes the statement; " the more times, and event is repeated, the more predictable the outcome becomes"? - Answer- Law of large numbers Which of the following would not be accomplished with the purchase of an insurance policy? - Answer- Risk is eliminated Which of the following is a situation where there is a possibility of either a loss or gain? - Answer- Speculative risk