XCEL Chapter 1 Exam Review 2023 WITH 100%VERIFIED SOLUTIONS

Stock insurer A non-participating company is also called Insurance policy Contract that involves one party which indemnifies another when a loss arises from an unknown event Mutual A type of insurer that is owned by its policy owners is called Because dividends are considered to be a return of premium Why are dividends from a mutual insurer not subject to taxation? Participating life insurance policy Life insurance policy issued by a mutual insurer provides a return of divisible surplus Exist for profit Fraternal Benefit Society does NOT Reinsurance Type of insurance where an insurer transfers loss exposures from policies written for its insurers It is the distribution of excess of funds accumulated by the insurer on participating policies What is a true statement regarding a life insurance policy dividend? Mutual Insurer Insurer owned by its policyholders Reinsurer A life insurance company has transferred some of its risk to another insurer. The insurer assuming the risk is called the Marketing One important function of an insurance company is to identify and sell to potential customers. Which of these BEST describes this function? Participating policy John owns an insurance policy that gives him the right to share in the insurer's surplus. What kind of policy is this? Non-participating policy Does not participate in paying dividends Participating life insurance policy Contract that allows the policy owner to receive a share of surplus in the form of policy dividends $10,000 or up to 1 year in jail Minimum penalty under the McCarran-Ferguson Act Demutualization When a mutual insurer becomes a stock company