FLORIDA STATE INSURANCE LICENSE EXAM 360 ACTUAL EXAM
QUESTIONS WITH DETAILED CORRECT VERIFIED ANSWERS
LATEST 2024
1. Risk management advisers _____ sell life insurance: can not
2. _____ are in the business of selling insurance for a profit. ____ insurers offer many lines
of insurance. Some sell primarily life insurance and annuities, while other sell accident
and health insurance, or property and casualty insurance.: commercial insurers
3. An insurance company selling more than one line of insurance is known as: Mule-line
Insurer
4. are organized and incorporated under state laws for the purpose of making a profit for its
stockholders (shareholders: Stock Companies
5. Traditionally, stock insurers are called ______ insurers because policyholders do not
participate in receiving dividends or electing the board of directors, unless they are also a
stockholder of the company. When declared, stock dividends are paid to stockholders:
nonparticipating
6. Transformation of a stock insurer into a mutual insurer is termed _______, and the
reverse is termed ______ . Dividends from a stock insurer subject to taxation because
they are considered profit.: mutualization/demutualization
7. _______ Companies are owned by their policyholders: Mutual
8. Mutual insurers are known as ________ because policyholders ________ in receiving
dividends and electing the board of directors. When declared, mutual company dividends
are paid to the policyholders. Dividends from a mutual insurer are not subject to taxation
because the dividends are considered to be a return of premium: Participating Insurers /
Participate
9. The only exception is if the policyowner chooses to let the dividends sit and collect
interest. In this case, only the accumulated interest would be _____.: taxable
10. If a company operates as both a PARTICIPATING and NONPARTICIPATING insurer they
are known as a _____ insurer: mixed
11. operates based on loss-sharing by group members. No premium is payable in advance.
Instead, each member is assessed an individual portion of losses that occur: A pure
assessment mutual company
12. charges a premium at the beginning of the policy period. If the original premiums
exceed the operating expenses and losses, the surplus is returned to the policyholders as
dividends. However, if total premiums are not enough to meet losses, additional
assessments are levied against the members. Normally, the amount of assessment that
may be levied is limited either by state law or simply as a provision in the insurer's by-
laws.: An advance premium assessment mutual
13. are special types of mutual companies, nonprofit religious, ethnic or charitable
organizations that provide insurance solely to their members. Fraternal must be formed
for reasons other than obtaining insurance. An example of fraternal societies is Knights of
Columbus: Fraternal benefit societies
,14. are mutual companies formed by a group of people in the same industry or
profession. Examples would be pharmacists, dentists, and engineers: Risk retention
groups
15. offer benefits to subscribers in return for the payment of a premium. These services
are packaged into various plans, and those who purchase the plans are known as
subscribers. Examples of service providers are Health Maintenance Organizations (HMO)
and Preferred Provider Organizations (PPO: Service Providers
16. are unincorporated groups of individual members that provide insurance for other
members through indemnity contracts. Each member acts as both insurer and insured
and are managed by Attorney in Fact.: Reciprocal insurers
17. make arrangements with other insurance companies to transfer a portion of their risk
to the reinsurer. The company transferring the risk is called the Ceding Company and the
company assuming the risk is the Reinsurer: Reinsurers
18. In a reinsurance agreement, the insurance company that transfers its loss exposure to
another insurer is called the: Primary Insurer
19. is sold by home service or debit life insurance companies. Face amounts are small;
usually $1,000 to $2,000 and premiums are paid weekly.: Home
Service Insurers (also known as industrial insurance ),
20. (Old Age Survivor Disability Insurance OASDI- Provides income benefits for the elderly
(retirement), survivors of those who died young (young child of a deceased parent), and
those qualifying for federal disability.: Social Security
21. Health insurance to CARE for the elderly: Medicare
22. Health insurance to AID the financially needy: Medicaid
23. _____ (Serviceman's or Veteran's Group Life Insurance: life insurance for active and
retired members of the military)
_____ (health insurance for members of the military and their family): S.G.L.I.
and V.G.L.I / Tri-Care
24. retain risks and must have a large number of similar risks and enough capital to pay
claims. However, they may save money if the loss experience is lower than the expected
costs. _____ are not a method of transferring risk, rather self-insurers establish their
own self-funded plan to cover potential losses: self insurers
25. is a plan in which an employer pays insurance benefits from a fund derived from the
employer's current revenues: self funded
26. is not an insurance company. Members of the association form syndicates to underwrite
and issue insurance- like coverage. This is a group of investors who share in unusual
risk.: Lloyds of London
27. are the ways insurance products are marketed and sold to the public. Insurance can be
purchased through licensed insurance producers, who are either agents or brokers, or
through a number of other ways. Agents are either captive/career agents or
independent agents. Captive agents work for only one insurer. Independent agents
work for themselves or for several insurers non- exclusively: Distribution systems
, 28. With the career agency system commercial insurers establish offices in certain locations.
Career agents are recruited to work at these locations. A general agent hires and trains
new producers and supervises a number of other producers. All producers under the
career agency system are captive agents and employees of the insurer.: Career Agency
System
29. the U.S. Supreme Court ruled that insurance transactions crossing state lines are not
interstate commerce.: 1869 Paul V Virginia
30. gave the authority to the states to regulate insurance.: 1905 The Armstrong Inv.
31. ruled that insurance transactions crossing state lines are interstate commerce and are
subject to federal regulation. Thus, many federal laws were conflicting with existing
state laws. However, this decision did not affect the power of states to regulate
insurance.: 1944 US v SE Underwriters
32. states that while the federal government has authority to regulate the insurance
industry, it would not exercise its right if the insurance industry was regulated
effectively and adequately on the state level. Under the McCarran-Ferguson Act, the
minimum penalty of a producer who has obtained personal information about a client
without having a legitimate reason to do so is a fine of $10,000.: 1945 The
McCarran/Feguson Act
33. provides individuals privacy protection and fair and accurate credit reporting. Insurance
companies are required to notify applicants if a credit check will be made on them.
Under the Fair Credit Reporting Act, the maximum penalty of a producer who has
obtained Consumer Information Reports under false pretenses is a fine of $5,000.: 1970
Fair ReportingAct
34. This law repealed the Glass-Steagall Act; this allows Banks, Retail Brokerages and
Insurance companies to enter each other's line of business: 1999
Gramm-Leach-Billey Act
35. Uniting and Strengthening America by Providing Appropriate Tools Required to
Intercept and Obstruct Terrorism Act): as it relates to the insurance industry, is designed
to detect and deter terrorists and their funding by imposing anti-money laundering
requirements on brokerage firms and financial institutions.: 01 Patriot Act
36. Insurance calls are not exempt from the no not call registry.: 03 National Do Not Call
Registry
37. is an organization composed of insurance commissioners from all 50 states, the District
of Columbia and the 4 US territories. They are responsible for recommending
appropriate laws and regulations: NAIC
38. NAIC are responsible for the creation of the ____ and the ______ , and the
Medicare Supplement Insurance Minimum Standards Model Act.: Advertising Code / Unfair
Trade Practices Act
39. The NAIC has four broad objectives: 1. To encourage uniformity in state insurance laws
and regulations
2. To assist in the administration of those laws and regulations by promoting efficiency
QUESTIONS WITH DETAILED CORRECT VERIFIED ANSWERS
LATEST 2024
1. Risk management advisers _____ sell life insurance: can not
2. _____ are in the business of selling insurance for a profit. ____ insurers offer many lines
of insurance. Some sell primarily life insurance and annuities, while other sell accident
and health insurance, or property and casualty insurance.: commercial insurers
3. An insurance company selling more than one line of insurance is known as: Mule-line
Insurer
4. are organized and incorporated under state laws for the purpose of making a profit for its
stockholders (shareholders: Stock Companies
5. Traditionally, stock insurers are called ______ insurers because policyholders do not
participate in receiving dividends or electing the board of directors, unless they are also a
stockholder of the company. When declared, stock dividends are paid to stockholders:
nonparticipating
6. Transformation of a stock insurer into a mutual insurer is termed _______, and the
reverse is termed ______ . Dividends from a stock insurer subject to taxation because
they are considered profit.: mutualization/demutualization
7. _______ Companies are owned by their policyholders: Mutual
8. Mutual insurers are known as ________ because policyholders ________ in receiving
dividends and electing the board of directors. When declared, mutual company dividends
are paid to the policyholders. Dividends from a mutual insurer are not subject to taxation
because the dividends are considered to be a return of premium: Participating Insurers /
Participate
9. The only exception is if the policyowner chooses to let the dividends sit and collect
interest. In this case, only the accumulated interest would be _____.: taxable
10. If a company operates as both a PARTICIPATING and NONPARTICIPATING insurer they
are known as a _____ insurer: mixed
11. operates based on loss-sharing by group members. No premium is payable in advance.
Instead, each member is assessed an individual portion of losses that occur: A pure
assessment mutual company
12. charges a premium at the beginning of the policy period. If the original premiums
exceed the operating expenses and losses, the surplus is returned to the policyholders as
dividends. However, if total premiums are not enough to meet losses, additional
assessments are levied against the members. Normally, the amount of assessment that
may be levied is limited either by state law or simply as a provision in the insurer's by-
laws.: An advance premium assessment mutual
13. are special types of mutual companies, nonprofit religious, ethnic or charitable
organizations that provide insurance solely to their members. Fraternal must be formed
for reasons other than obtaining insurance. An example of fraternal societies is Knights of
Columbus: Fraternal benefit societies
,14. are mutual companies formed by a group of people in the same industry or
profession. Examples would be pharmacists, dentists, and engineers: Risk retention
groups
15. offer benefits to subscribers in return for the payment of a premium. These services
are packaged into various plans, and those who purchase the plans are known as
subscribers. Examples of service providers are Health Maintenance Organizations (HMO)
and Preferred Provider Organizations (PPO: Service Providers
16. are unincorporated groups of individual members that provide insurance for other
members through indemnity contracts. Each member acts as both insurer and insured
and are managed by Attorney in Fact.: Reciprocal insurers
17. make arrangements with other insurance companies to transfer a portion of their risk
to the reinsurer. The company transferring the risk is called the Ceding Company and the
company assuming the risk is the Reinsurer: Reinsurers
18. In a reinsurance agreement, the insurance company that transfers its loss exposure to
another insurer is called the: Primary Insurer
19. is sold by home service or debit life insurance companies. Face amounts are small;
usually $1,000 to $2,000 and premiums are paid weekly.: Home
Service Insurers (also known as industrial insurance ),
20. (Old Age Survivor Disability Insurance OASDI- Provides income benefits for the elderly
(retirement), survivors of those who died young (young child of a deceased parent), and
those qualifying for federal disability.: Social Security
21. Health insurance to CARE for the elderly: Medicare
22. Health insurance to AID the financially needy: Medicaid
23. _____ (Serviceman's or Veteran's Group Life Insurance: life insurance for active and
retired members of the military)
_____ (health insurance for members of the military and their family): S.G.L.I.
and V.G.L.I / Tri-Care
24. retain risks and must have a large number of similar risks and enough capital to pay
claims. However, they may save money if the loss experience is lower than the expected
costs. _____ are not a method of transferring risk, rather self-insurers establish their
own self-funded plan to cover potential losses: self insurers
25. is a plan in which an employer pays insurance benefits from a fund derived from the
employer's current revenues: self funded
26. is not an insurance company. Members of the association form syndicates to underwrite
and issue insurance- like coverage. This is a group of investors who share in unusual
risk.: Lloyds of London
27. are the ways insurance products are marketed and sold to the public. Insurance can be
purchased through licensed insurance producers, who are either agents or brokers, or
through a number of other ways. Agents are either captive/career agents or
independent agents. Captive agents work for only one insurer. Independent agents
work for themselves or for several insurers non- exclusively: Distribution systems
, 28. With the career agency system commercial insurers establish offices in certain locations.
Career agents are recruited to work at these locations. A general agent hires and trains
new producers and supervises a number of other producers. All producers under the
career agency system are captive agents and employees of the insurer.: Career Agency
System
29. the U.S. Supreme Court ruled that insurance transactions crossing state lines are not
interstate commerce.: 1869 Paul V Virginia
30. gave the authority to the states to regulate insurance.: 1905 The Armstrong Inv.
31. ruled that insurance transactions crossing state lines are interstate commerce and are
subject to federal regulation. Thus, many federal laws were conflicting with existing
state laws. However, this decision did not affect the power of states to regulate
insurance.: 1944 US v SE Underwriters
32. states that while the federal government has authority to regulate the insurance
industry, it would not exercise its right if the insurance industry was regulated
effectively and adequately on the state level. Under the McCarran-Ferguson Act, the
minimum penalty of a producer who has obtained personal information about a client
without having a legitimate reason to do so is a fine of $10,000.: 1945 The
McCarran/Feguson Act
33. provides individuals privacy protection and fair and accurate credit reporting. Insurance
companies are required to notify applicants if a credit check will be made on them.
Under the Fair Credit Reporting Act, the maximum penalty of a producer who has
obtained Consumer Information Reports under false pretenses is a fine of $5,000.: 1970
Fair ReportingAct
34. This law repealed the Glass-Steagall Act; this allows Banks, Retail Brokerages and
Insurance companies to enter each other's line of business: 1999
Gramm-Leach-Billey Act
35. Uniting and Strengthening America by Providing Appropriate Tools Required to
Intercept and Obstruct Terrorism Act): as it relates to the insurance industry, is designed
to detect and deter terrorists and their funding by imposing anti-money laundering
requirements on brokerage firms and financial institutions.: 01 Patriot Act
36. Insurance calls are not exempt from the no not call registry.: 03 National Do Not Call
Registry
37. is an organization composed of insurance commissioners from all 50 states, the District
of Columbia and the 4 US territories. They are responsible for recommending
appropriate laws and regulations: NAIC
38. NAIC are responsible for the creation of the ____ and the ______ , and the
Medicare Supplement Insurance Minimum Standards Model Act.: Advertising Code / Unfair
Trade Practices Act
39. The NAIC has four broad objectives: 1. To encourage uniformity in state insurance laws
and regulations
2. To assist in the administration of those laws and regulations by promoting efficiency
