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RMIN CH 5 Exam 2 Questions &Exam (elaborations) answers 100% satisfaction guarantee
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RMIN CH 5 Exam 2 Questions &Exam (elaborations) answers 100% satisfaction guarantee
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RMIN CH 5 Exam 2 questionsA - ✔✔10) Neil needs insurance that is unavailable in the state where he lives. To obtain insurance
from a nonadmitted insurer, Neil should contact a
A) surplus lines broker.
B) nonadmitted agent.
C) general agency broker.
D) direct writer.
A - ✔✔13) Advantages of the direct response system for marketing life insurance include which of
the following?
I. Advertising can be specifically directed to selected markets.
II. Complex products can be easily sold.
A) I only
B) II only
C) both I and II
D) neither I nor II
A - ✔✔21) Sarah owns a property and liability insurance agency. She is authorized to represent
several insurance companies and she is compensated by commissions. Sarah's agency owns the
100%
expiration rights to the business she sells. Sarah is a(n)
A) independent agent.
B) exclusive agent.
C) direct writer.
D) insurance broker.
A - ✔✔30) Some investors decided to start an insurance company. Each investor contributed
$50,000 to raise the capital required to charter a new company. Each investor received an ownership
interest in the company. The company will raise additional capital by selling ownership rights to other
investors. Under this type of organization, the customer and owner functions are separate. This type
of insurer is called a
A) stock company.
B) reciprocal exchange.
C) fraternal company.
D) mutual company.
A - ✔✔37) R.I.P. Company manufactures herbicide and pesticide. The company had difficulty finding
affordable liability insurance. R.I.P. established its own insurance company based in Bermuda for the
purpose of insuring R.I.P.'s loss exposures. The company that R.I.P. formed is called a
A) captive insurer.
, B) reciprocal insurer.
C) fraternal insurer.
D) holding company.
A - ✔✔39) A personal lines insurance company initiating banking and investment services for its
policyowners demonstrates which financial services industry trend?
A) convergence
B) demutualization
C) mass merchandising
A - ✔✔7) Which of the following statements about Lloyd's of London is true?
A) Coverage is actually written by syndicates who belong to Lloyd's of London.
B) Its underwriters specialize in writing life and health insurance.
C) It operates as an admitted insurer throughout the United States.
D) It allows underwriters to write coverage without meeting stringent financial requirements.
A - ✔✔8) Temporary evidence of insurance until a policy is actually issued is provided by a(n)
A) binder.
B) brokerage agreement.
C) pre-approval form.
D) endorsement. 100%
A - ✔✔9) Which of the following statements about brokers is (are) true?
I. They legally represent the insured rather than the insurance company.
II. They are prohibited from being licensed as agents.
A) I only
B) II only
C) both I and II
D) neither I nor II
B - ✔✔11) All of the following statements about the general agency system used for selling life
insurance are true EXCEPT
A) A general agent is responsible for hiring, training, and motivating new agents.
B) A general agent is a salaried employee whose responsibilities are limited to selling life insurance.
C) A general agent may receive an allowance for the expenses of maintaining an agency office.
D) A general agent receives a commission based on the amount of business produced.
B - ✔✔12) Which of the following statements about the managerial system of marketing life
insurance is (are) true?
I. It uses branch offices run by independent agents who represent several companies.
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