RMIN 4000 Exam 2 - UGA Daniel Brown UPDATED ACTUAL Exam Questions and CORRECT Answers
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Course
RMIN 4000
Institution
RMIN 4000
RMIN 4000 Exam 2 - UGA Daniel Brown
UPDATED ACTUAL Exam Questions and
CORRECT Answers
Private insurance industry - CORRECT ANSWER- US insurance industry employed
2.9m - closer to 3m now
Insurers paid over $20 billion in premium taxes
Major types of private insurers - CORRECT ANSWER- Stock i...
RMIN 4000 Exam 2 - UGA Daniel Brown
UPDATED ACTUAL Exam Questions and
CORRECT Answers
Private insurance industry - CORRECT ANSWER✔✔- US insurance industry employed
2.9m - closer to 3m now
Insurers paid over $20 billion in premium taxes
Major types of private insurers - CORRECT ANSWER✔✔- Stock insurers
Mutual insurers
Mutual Insurers - CORRECT ANSWER✔✔- Owned by policyholders
Profits are distributed to policyholders through dividends or rate reductions
Assessment mutual - CORRECT ANSWER✔✔- insurer has right to assess policyholders an
additional amount if the insurer's financial operations are unfavorable
Advance premium mutual - CORRECT ANSWER✔✔- insurer does not issue assessable
policies
*Do not have right to assess their policyholders (most ins companies today)
Fraternal insurer - CORRECT ANSWER✔✔- provides life and health insurance to members
of a social or religious organization
,Lloyd's (of London) - CORRECT ANSWER✔✔- World's leading market that provides
services and physical facilities for its members to write specialized lines of insurance -
marketplace of insurance
Not an insurer
What kinds of insurance does Lloyd's offer? - CORRECT ANSWER✔✔- casualty
property
marine
energy
motor
aviation
reinsurance
Lloyd's brokers - CORRECT ANSWER✔✔- represent policyholders to arrange coverage
with syndicates
Lloyd's syndicates - CORRECT ANSWER✔✔- offer insurance contracts in the market
See celebrities and athletes insuring various body parts
Lloyd's Syndicates - Members - CORRECT ANSWER✔✔- Join together and provide capital
to form syndicates, receiving profits or bearing losses
Most are corporation or limited partnerships
, "Names" are high net worth individuals
Lloyd's Syndicates - Managing Agents - CORRECT ANSWER✔✔- manage the syndicates,
typically specialize in certain lines
Lloyd's Syndicates - Underwriters - CORRECT ANSWER✔✔- work for the syndicates to
assess risks and determine premiums
*Must meet Lloyd's stringent capital requirements
Stock insurer - CORRECT ANSWER✔✔- A corporation owned by stockholders
Objective is to earn profit for stockholders by increasing the value of the stock and paying
dividends
Insurance agent - CORRECT ANSWER✔✔- Someone who legally represents the principal
(insurance company) and has the authority to act on the principal's behalf
The principal is legally responsible for all acts of an agent when the agent is acting within the
scope of authority
Typically has the authority to bind coverage
Insurance binders - CORRECT ANSWER✔✔- Provide temporary insurance until the policy
is actually written
Can typically be provided by property and casualty (P&C) agents.
Life insurance agents usually have no authority to issue binders
Why can't life insurance agents issue binders? - CORRECT ANSWER✔✔- Because the
company wants the opportunity to underwrite the risk first
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