OR Life and Health Insurance: Flash Cards from Exam FX. Chapter:
General Insurance; Completing the Application, Underwriting, and
Delivering the Policy | 50 Questions with 100% Correct Answers
Insurers are classified to their domiciles.
What are the three types of insurers? Correct Answer: 1) Domestic
2) Foreign
3) Alien
An insurance policy paid a nontaxable dividend to the insured one year, and nothing the next.
From what type of insurer did the insured purchase the policy? Correct Answer: Mutual
Insurance is used to transfer what to the insurance company? Correct Answer: Financial
responsibility for loss.
What do individuals use to transfer their risk of loss to a larger group? Correct Answer:
Insurance
What document is required for an insurance company to transport insurance? Correct Answer:
Certificate of Authority
For the purpose of insurance, what is risk? Correct Answer: Uncertainty of loss
What are the five characteristics of an ideally insurable risk? Correct Answer: Loss must be due
to:
1) Due to chance
2) Definite and measurable
3) Statistically predictable
4) Not catastrophic
5) Coverage cannot be mandatory
What is the name of the process that insurance companies use to determine whether or not an
applicant is insurable? Correct Answer: Underwriting
What type of insurer is formed under the laws of another country? Correct Answer: Alien
What law is the foundation of the statistical prediction of loss upon which rates for insurance are
calculated? Correct Answer: Law of Large Numbers
Whom does an insurance agent represent? Correct Answer: The insurance company
The insurer organized to return a profit to the stockholders is what type of insurer? Correct
Answer: Stock company
General Insurance; Completing the Application, Underwriting, and
Delivering the Policy | 50 Questions with 100% Correct Answers
Insurers are classified to their domiciles.
What are the three types of insurers? Correct Answer: 1) Domestic
2) Foreign
3) Alien
An insurance policy paid a nontaxable dividend to the insured one year, and nothing the next.
From what type of insurer did the insured purchase the policy? Correct Answer: Mutual
Insurance is used to transfer what to the insurance company? Correct Answer: Financial
responsibility for loss.
What do individuals use to transfer their risk of loss to a larger group? Correct Answer:
Insurance
What document is required for an insurance company to transport insurance? Correct Answer:
Certificate of Authority
For the purpose of insurance, what is risk? Correct Answer: Uncertainty of loss
What are the five characteristics of an ideally insurable risk? Correct Answer: Loss must be due
to:
1) Due to chance
2) Definite and measurable
3) Statistically predictable
4) Not catastrophic
5) Coverage cannot be mandatory
What is the name of the process that insurance companies use to determine whether or not an
applicant is insurable? Correct Answer: Underwriting
What type of insurer is formed under the laws of another country? Correct Answer: Alien
What law is the foundation of the statistical prediction of loss upon which rates for insurance are
calculated? Correct Answer: Law of Large Numbers
Whom does an insurance agent represent? Correct Answer: The insurance company
The insurer organized to return a profit to the stockholders is what type of insurer? Correct
Answer: Stock company
