CCTC EXAM TWO PACKAGE ACTUAL
EXAMINATION 2026 QUESTIONS WITH
SOLUTIONS GRADED A+
⩥ Which of the following is NOT considered advertising?
An illustration
A sales presentation
Direct mailing from an agency
A rating from a rating service company, such as A.M. Best. Answer: A
rating from a rating service company, such as A.M. Best
⩥ A type of insurer that is owned by its policyowners is called
stock
domestic
in-house
mutual. Answer: mutual
⩥ ABC Insurance Company transfers part of their risk to XYZ Insurance
Company. This situation is called
,conservation
reciprocity
reinsurance
risk transfer. Answer: reinsurance
⩥ What kind of life insurance policy issued by a mutual insurer provides
a return of divisible surplus?
straight life insurance policy
nonparticipating life insurance policy
participating life insurance policy
divisible surplus life insurance policy. Answer: participating life
insurance policy
⩥ A nonparticipating policy will
provide tax advantages
provide a return of premium
give policyowners special privileges
not pay dividends. Answer: not pay dividends
,⩥ Karen is a producer who has obtained personal information about a
client without having a legitimate reason to do so. Under the McCarran-
Ferguson Act, what is the minimum penalty for this?
$15,000
$0
$10,000
$5,000. Answer: $10,000
⩥ The Do Not Call Registry offers exemptions for calls placed from all
of the following EXCEPT
political organizations
surveys
charities
insurance sales calls. Answer: insurance sales calls
⩥ The Fair Credit and Reporting Act's main purpose is to
protect insurers from an applicant's misrepresentation
assist in the underwriting of insurance policies
assist an insurer in determining an applicant's creditworthiness
, protect consumers with guidelines regarding credit reporting and
distribution. Answer: protect consumers with guidelines regarding credit
reporting and distribution
⩥ Why are dividends from a mutual insurer not subject to taxation?
Because dividends are considered to be a return of premium
Because dividends are already subject to capital gains
Because dividends are payable directly to the policyholder
Because insurance premiums are tax-deductible. Answer: Because
dividends are considered to be a return of premium
⩥ All of the following are examples of pure risk EXCEPT
Injured while playing football
Falling at a casino and breaking a hip
Jewelry stolen during a home robbery
Losing money at a casino. Answer: Losing money at a casino
⩥ How do insurers predict the increase of individual risks?
Law of large numbers
Average mortality incidents
EXAMINATION 2026 QUESTIONS WITH
SOLUTIONS GRADED A+
⩥ Which of the following is NOT considered advertising?
An illustration
A sales presentation
Direct mailing from an agency
A rating from a rating service company, such as A.M. Best. Answer: A
rating from a rating service company, such as A.M. Best
⩥ A type of insurer that is owned by its policyowners is called
stock
domestic
in-house
mutual. Answer: mutual
⩥ ABC Insurance Company transfers part of their risk to XYZ Insurance
Company. This situation is called
,conservation
reciprocity
reinsurance
risk transfer. Answer: reinsurance
⩥ What kind of life insurance policy issued by a mutual insurer provides
a return of divisible surplus?
straight life insurance policy
nonparticipating life insurance policy
participating life insurance policy
divisible surplus life insurance policy. Answer: participating life
insurance policy
⩥ A nonparticipating policy will
provide tax advantages
provide a return of premium
give policyowners special privileges
not pay dividends. Answer: not pay dividends
,⩥ Karen is a producer who has obtained personal information about a
client without having a legitimate reason to do so. Under the McCarran-
Ferguson Act, what is the minimum penalty for this?
$15,000
$0
$10,000
$5,000. Answer: $10,000
⩥ The Do Not Call Registry offers exemptions for calls placed from all
of the following EXCEPT
political organizations
surveys
charities
insurance sales calls. Answer: insurance sales calls
⩥ The Fair Credit and Reporting Act's main purpose is to
protect insurers from an applicant's misrepresentation
assist in the underwriting of insurance policies
assist an insurer in determining an applicant's creditworthiness
, protect consumers with guidelines regarding credit reporting and
distribution. Answer: protect consumers with guidelines regarding credit
reporting and distribution
⩥ Why are dividends from a mutual insurer not subject to taxation?
Because dividends are considered to be a return of premium
Because dividends are already subject to capital gains
Because dividends are payable directly to the policyholder
Because insurance premiums are tax-deductible. Answer: Because
dividends are considered to be a return of premium
⩥ All of the following are examples of pure risk EXCEPT
Injured while playing football
Falling at a casino and breaking a hip
Jewelry stolen during a home robbery
Losing money at a casino. Answer: Losing money at a casino
⩥ How do insurers predict the increase of individual risks?
Law of large numbers
Average mortality incidents
