RMIN 4000 UGA Edmunds Test 2
Questions and Answers
2 Main Branches of Private Insurance - Correct Answers -Property/Casualty &
Life/Annuity
Main Types of Private Insurers - Correct Answers -Stock Insurers, Mutual Insurers,
Lloyd's
What are stock insurers? - Correct Answers -A corporation owned by stockholders
Objective of stock insurers - Correct Answers -earn profit for stockholders by increasing
the value of stock and paying dividends
What are mutual insurers? - Correct Answers -A corporation owned by policyholders
Objective of mutual insurers - Correct Answers -profits are distrubuted to policyholders
by dividends or rate reductions
Types of Mutual Insurers - Correct Answers -Assessment Mutual, Advance Premium
Mutual, Fraternal Insurer
Make insurance available - Correct Answers -- Insurers may not be willing to underwrite
types of risks
- Fair Access to Insurance Requirements (FAIR Plans)
- Restrict the market exit of insurers.
6 regulated areas - Correct Answers -Formation & Licensing of insurers, solvency
regulation, rate regulation, policy forms, sales practices and consumer protection, and
taxation of insurers
Formation and Licensing of Insurers - Correct Answers -Minimum capital and surplus
requirements
Domestic Insurer - Correct Answers -Domiciled in the state
Assessment Mutual - Correct Answers -insurer has the right to assess policyholders an
additional amount if the insurer's financial operations are unfavorable`
advance premium mutual - Correct Answers -insurer does not issue assessable policies
, fraternal insurer - Correct Answers -Provides life and health insurance to members of a
social or religious organization
Lloyd's - Correct Answers -not an insurer, but is the world's leading insurance market
that provides services and physical facilities for its members to write specialized lines of
insurance
Lloyd's brokers - Correct Answers -represent policyholders to arrange coverage with
syndicates
Lloyd's Syndicates - Correct Answers -offer insurance contracts in the market
Lloyd's Syndicates: Members - Correct Answers --Join together & provide capital to
form syndicates, receiving profits or bearing losses
-Most are corporations or limited partnerships
-"Names" are high net worth individuals
Managing Agents (Lloyd's) - Correct Answers -manage the syndicates, who typically
specialize in certain lines
Lloyd's Underwriters - Correct Answers -work for the syndicates to assess risks and
determine premiums
What must Lloyd's syndicates achieve? - Correct Answers -They must meet Lloyd's
stringent capital requirements
Marketing systems - Correct Answers -agents, brokers, surplus lines brokers, managing
general agent
Managing General Agent (MGA) - Correct Answers -specialty producer that has
underwriting authority from an insurer (s)
Insurance agent - Correct Answers -someone who legally represents the principal
(insurance company) and has the authority to act on the principal's behalf
What is the principal legally responsible for? - Correct Answers -all acts of an agent
when the agent is acting within the scope of authority
Agent Binding Authority - Correct Answers -provide temporary insurance until the policy
is actually written
Who typically provides agent binding authority? - Correct Answers -Property and
Casualty agents
Who cannot provide agent binding authority? - Correct Answers -Life Insurance Agents
Questions and Answers
2 Main Branches of Private Insurance - Correct Answers -Property/Casualty &
Life/Annuity
Main Types of Private Insurers - Correct Answers -Stock Insurers, Mutual Insurers,
Lloyd's
What are stock insurers? - Correct Answers -A corporation owned by stockholders
Objective of stock insurers - Correct Answers -earn profit for stockholders by increasing
the value of stock and paying dividends
What are mutual insurers? - Correct Answers -A corporation owned by policyholders
Objective of mutual insurers - Correct Answers -profits are distrubuted to policyholders
by dividends or rate reductions
Types of Mutual Insurers - Correct Answers -Assessment Mutual, Advance Premium
Mutual, Fraternal Insurer
Make insurance available - Correct Answers -- Insurers may not be willing to underwrite
types of risks
- Fair Access to Insurance Requirements (FAIR Plans)
- Restrict the market exit of insurers.
6 regulated areas - Correct Answers -Formation & Licensing of insurers, solvency
regulation, rate regulation, policy forms, sales practices and consumer protection, and
taxation of insurers
Formation and Licensing of Insurers - Correct Answers -Minimum capital and surplus
requirements
Domestic Insurer - Correct Answers -Domiciled in the state
Assessment Mutual - Correct Answers -insurer has the right to assess policyholders an
additional amount if the insurer's financial operations are unfavorable`
advance premium mutual - Correct Answers -insurer does not issue assessable policies
, fraternal insurer - Correct Answers -Provides life and health insurance to members of a
social or religious organization
Lloyd's - Correct Answers -not an insurer, but is the world's leading insurance market
that provides services and physical facilities for its members to write specialized lines of
insurance
Lloyd's brokers - Correct Answers -represent policyholders to arrange coverage with
syndicates
Lloyd's Syndicates - Correct Answers -offer insurance contracts in the market
Lloyd's Syndicates: Members - Correct Answers --Join together & provide capital to
form syndicates, receiving profits or bearing losses
-Most are corporations or limited partnerships
-"Names" are high net worth individuals
Managing Agents (Lloyd's) - Correct Answers -manage the syndicates, who typically
specialize in certain lines
Lloyd's Underwriters - Correct Answers -work for the syndicates to assess risks and
determine premiums
What must Lloyd's syndicates achieve? - Correct Answers -They must meet Lloyd's
stringent capital requirements
Marketing systems - Correct Answers -agents, brokers, surplus lines brokers, managing
general agent
Managing General Agent (MGA) - Correct Answers -specialty producer that has
underwriting authority from an insurer (s)
Insurance agent - Correct Answers -someone who legally represents the principal
(insurance company) and has the authority to act on the principal's behalf
What is the principal legally responsible for? - Correct Answers -all acts of an agent
when the agent is acting within the scope of authority
Agent Binding Authority - Correct Answers -provide temporary insurance until the policy
is actually written
Who typically provides agent binding authority? - Correct Answers -Property and
Casualty agents
Who cannot provide agent binding authority? - Correct Answers -Life Insurance Agents
