LOMA 281 Exam Study Guide with
Complete Solutions
waiver of premium for payor benefit - Answer️️ -insurer waives renewal premiums if
the policy owner, rather than the insured, dies or becomes totally disabled (must provide
evidence of insurability)
Contracts of Indemnity - Answer️️ -ba...
- legally required to have a representative form of government
Solvency Regulation - Answer✔️✔️--assets must be sufficient to offset liabilities
-calculation of reserves
-premium to surplus ratio
-investment types and quality
-annual statement must be filed
-guaranty funds
Market Conduct Regulation - Answer✔️✔️-Regulation of the practices of insurers in
regard to four areas of operation: sales practices, underwriting practices, claims
practices, and bad-faith actions.
McCarran-Ferguson Act - Answer✔️✔️-states that while the federal government has
authority to regulate the insurance industry, it would not exercise its right if the
insurance industry was regulated effectively and adequately on the state level.
Dodd-Frank Act - Answer✔️✔️-Created the Federal Insurance Office (FIO) with authority
to monitor the insurance industry
The Life and Health Insurance Guaranty Association - Answer✔️✔️-State's association
covers the company's benefits up to state-mandated maximums (usually up to $300k)
should the insurance company go insolvent
Unilateral Contract - Answer✔️✔️-contract in which only one party makes a legally
enforceable promise when entering into the contract
Bilateral Contract - Answer✔️✔️-Both parties make legally enforceable promises
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