Louisiana P&C Insurance Exam Review set one
Questions with Complete Solutions| Verified
Answers| 2024-25
It is illegal for an agent to pay, allow, give, offer, or promise to a prospective insurance buyer
any return of premiums, any special favor or advantage, or anything of value not specified in
the insurance contract, as an inducement to buy insurance. This practice is known as -
✔✔rebating.
Rebates - ✔✔are prohibited. It is illegal to allow, offer, give or promise any rebate of
premium, any special favor or advantage, or anything of value not specified in the insurance
contract.
An insurance company incorporated under the laws of a state in which it is operating is
classified by that state as - ✔✔a domestic insurer.
The term 'domestic insurer' - ✔✔is used by a state to refer to an insurer formed under the
laws of that particular state.
Within your own state of residence, an insurance company formed under the laws of a
European country would be classified - ✔✔an alien insurer
An 'alien insurer' typically means - ✔✔one formed under the laws of a nation other than the
United States of America.
An insurer's 'loss ratio' is determined by - ✔✔dividing its underwriting losses by total
premiums.
A 'loss ratio' - ✔✔is determined by dividing losses by total premiums received.
, Misrepresenting an insurance policy, or making incomplete comparisons of policies, for the
purpose of inducing someone to change or replace an existing insurance policy is an illegal
practice known as - ✔✔twisting.
It is unlawful for a person to misrepresent a policy, or to make incomplete comparisons, for the
purpose of inducing a policyholder to change or replace existing insurance. - ✔✔This
practice is known as twisting.
Which type of licensee represents insureds or prospective insureds and does not represent an
insurance company? - ✔✔An insurance broker.
A broker - ✔✔works as an independent contractor and solicits, negotiates, or procures
insurance on behalf of insureds or prospective insureds, and not on behalf of an insurer or an
agent.
An agent who represents more than one insurance company is a/an - ✔✔independent
agent.
In the independent agency system - ✔✔agencies that are independent contractors contract
with several different companies to represent and sell insurance for those companies.
The insurance business is regulated primarily by - ✔✔state laws.
Insurance is regulated - ✔✔at the state level. In addition to state insurance laws, each state
enacts insurance rules and regulations to help carry out the intent of the insurance code.
An insurance company that obtains capital from investors who own the company and share the
company's profits and losses is - ✔✔a stock company.
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