PA Life Insurance Exam Questions and Correct Answers

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? $10,000 or up to one year in jail A type of insurer that is owned by its policyowners is called Mutual insurer What is considered to be the primary reason for buying life insurance? Provide death benefits Fraternal Benefit Society has each of the following characteristics EXCEPT Exist for profit (FBS is a non profit entity, it is incorporated, without capital stock, and exists for the benefit of its members) What kind of life insurance policy issued by a mutual insurer provides a return of divisible surplus? participating life insurance policy (A mutual insurer issues life insurance policies that provide a return of divisible surplus.) An insurer's ability to make unpredictable payouts to policyowners is called liquidity An insurer's claim settlement practices are regulated by the State insurance departments A nonparticipating company is sometimes called a stock insurer Which of the following is not considered advertising? A.) a rating from a rating service company such as A.M. best B.) an illustration C.) A sales presentation D.)Direct mailing from an agency A.) a rating from a rating service company such as A.M. best A nonparticipating policy will not pay dividends Insurance represents the process of risk transference A ______ is considered to be an event or condition that increases the probability of an insureds loss? Hazard