INSURANCE EXAMINATION
[2025/2026]
PRINCIPLES OF INSURANCE, RISK MANAGEMENT
AND GENERAL INSURANCE PRACTICE
BUSINESS, FINANCE & INSURANCE STUDIES
INSURANCE AND RISK MANAGEMENT / BUSINESS
STUDIES
SPRING SEMESTER EXAMINATION 2026
Certificate of Insurance
A legal document that indicates that an insurance policy has been issued, and that states both
the amounts and types of insurance provided.
Characteristics of social insurance
Non profit
Mandatory participation
1
Benefits prescribed by law
Page
1|Page
, Designed to meet needs of public
Government has monopoly
Private Insurers
Sell insurance based on needs and preferences
Wide variety of products
Exist to generate a profit
Insured party voluntarily participate
Stock Insurance Companies
Always for profit
Publicly traded
Stockholder provide capital and participate in profit or losses
"Non participation" insurers - no dividends go to policy holders
Mutual Insurance Company
No shareholders
Policy holders elect board of directors
"Participating" insurers - policy holders participate in dividends
Re-insurer
2
Page
Provides insurance for insurers to reduce exposure to loss
2|Page
, Pays percentage of insurers loss or any loss over a certain amount
Reciprocal Insurers
Unincorporated
Non profit
Operated by attorney in fact
Members pay into individual accounts
Cost of claims shared by whole groups
Fraternal Benefit Societies
Also called fraternal associations
Non profit mutual aid organizations
Engage in charitable activities
Provide some type of insurance to members
Typically consist of people with similar religion, ethnicity or occupation
Fraternal Benefit Societies insurance
Used to fund altruistic activities
Must be assessable by law
Members are both providers and recipients
If claims payment ability is impaired, members help pay the difference
3
Page
3|Page
[2025/2026]
PRINCIPLES OF INSURANCE, RISK MANAGEMENT
AND GENERAL INSURANCE PRACTICE
BUSINESS, FINANCE & INSURANCE STUDIES
INSURANCE AND RISK MANAGEMENT / BUSINESS
STUDIES
SPRING SEMESTER EXAMINATION 2026
Certificate of Insurance
A legal document that indicates that an insurance policy has been issued, and that states both
the amounts and types of insurance provided.
Characteristics of social insurance
Non profit
Mandatory participation
1
Benefits prescribed by law
Page
1|Page
, Designed to meet needs of public
Government has monopoly
Private Insurers
Sell insurance based on needs and preferences
Wide variety of products
Exist to generate a profit
Insured party voluntarily participate
Stock Insurance Companies
Always for profit
Publicly traded
Stockholder provide capital and participate in profit or losses
"Non participation" insurers - no dividends go to policy holders
Mutual Insurance Company
No shareholders
Policy holders elect board of directors
"Participating" insurers - policy holders participate in dividends
Re-insurer
2
Page
Provides insurance for insurers to reduce exposure to loss
2|Page
, Pays percentage of insurers loss or any loss over a certain amount
Reciprocal Insurers
Unincorporated
Non profit
Operated by attorney in fact
Members pay into individual accounts
Cost of claims shared by whole groups
Fraternal Benefit Societies
Also called fraternal associations
Non profit mutual aid organizations
Engage in charitable activities
Provide some type of insurance to members
Typically consist of people with similar religion, ethnicity or occupation
Fraternal Benefit Societies insurance
Used to fund altruistic activities
Must be assessable by law
Members are both providers and recipients
If claims payment ability is impaired, members help pay the difference
3
Page
3|Page
