WISCONSIN ACCIDENT AND HEALTH
INSURANCE EXAM
Dividends48from48a48stock48company48are48normally48sent48to:
Beneficiaries48
Shareholders
Policy48holders
Insureds48-48answer--Shareholders
Which48of48the48following48financial48products48creates48an48instant48estate,48no48matter48
when48the48date48of48death?
Mutual48funds48
Life48insurance
Certificate48of48deposit
Deferred48annuity48-48answer--Life48insurance
Which48of48the48following48outlines48the48authority48given48to48the48producer48on48behalf48o
f48the48insurer?48
Rebating48arrangement
Commingling48contract
Controlled48business48clause48
Producer48contract48-48answer--Producer48contract
Dividends48from48a48mutual48insurance48company48are48paid48to48whom?
Policyholders
Beneficiaries
Preferred48stockholders
Stockholders48-48answer--Policyholders
A48stock48insurance48company48is48owned48by48its
Officers
Board48directors48
Policyowners48
Shareholders48-48answer--Policyowners
A48reciprocal48insurer48typically48has48an48administrator48who48manages48the48premiums4
8collected48from48the48group's48members.48This48administrator48is48called48a(n)
Reciprocal48commissioner48
Attorney48general48
,Attorney-in-fact
Reciprocal48-48answer--Attorney-in-fact
which48reinsurance48contract48between48two48insurers48involves48an48automatic48sharing4
8of48the48risks48assumed?48
Arbitrage48reinsurance48
Facultative48reinsurance48
Excess48reinsurance48
Treaty48reinsurance48-48answer--Treaty48reinsurance
A48group-
owned48insurance48company48that48is48formed48to48assume48and48spread48the48liability48ri
sks48of48its48members48is48known48as48a
Risk48retention48group
Treaty48insurer48
Risk48assumption48group
Captive48insurer48-48answer--Risk48retention48group
Which48group48is48the48Do48not48Registry48designed48to48protect48against?
Telemarketers
Charities
Political48organizations48
Relatives48-48answer--Telemarketers
who48regulates48an48insurer's48claim48settlement48practices?
National48Association48of48Claim48Adjusters48
State48attorney48general48
National48Association48of48insurance48Commissioners48
State48insurance48departments48-48answer--State48insurance48departments
Which48of48the48following48is48Not48an48example48of48risk48retention?48
Becoming48aware48of48a48risk48and48taking48no48action48
Self-insuring48a48given48risk
Deciding48a48business48deal48is48risky48but48going48through48with48it48anyways
Not48doing48a48business48deal48after48deciding48it48would48be48too48risky48-48answer--
Not48doing48a48business48deal48after48deciding48it48would48be48too48risky
Which48of48the48following48describes48the48act48of48insuring48a48risk48against48possible48los
s?48
Risk48avoidance48
Risk48transfer48
Hazard48reduction48
Loss48management48-48answer--Risk48transfer
ABC48Company48is48attempting48to48minimize48the48severity48of48potential48losses48within4
8its48company.48The48company48is48engaged48in48risk
,Transference48
Retention
Reduction48
Avoidance48-48answer--Reduction
Which48of48these48statements48regarding48insurance48is48false?
One48way48insurers48deal48with48catastrophic48loss48is48through48reinsurance
As48the48number48of48insured48units48increases,48the48number48of48losses48decreases48
Speculative48risk48cannot48be48insured48
Pure48risk48can48be48insured48-48answer--
As48the48number48of48insured48units48increases,48the48number48of48losses48decreases
Purchasing48insurance48is48an48example48of48risk
Transference48
Avoidance48
Retention
Sharing48-48answer--Transference
A48business48becoming48incorporated48is48an48example48of48risk
Reduction48
Severance48
Retention48
Transfer48-48answer--Transfer
How48can48an48insurance48company48minimize48exposure48to48loss?48
Risk48concealing
Reinsuring48risks
Reissuance48
Risk48assumption48-48answer--Reinsuring48risks
An48insurable48risk48requires
That48the48chance48for48both48a48loss48or48gain48exists48
The48loss48must48be48catastrophic48
That48the48chance48of48loss48be48calculated
that48the48loss48must48be48incalculable48-48answer--
That48the48chance48of48loss48be48calculated
which48of48the48following48can48be48defined48as48"the48potential48for48loss"?
Hazard
Risk
Transference
Peril48-48answer--Risk
Which48term48describes48the48elimination48of48a48hazard?48
Risk48avoidance48
Risk48retention48
, Risk48transference48
Risk48pooling48-48answer--Risk48avoidance
which48one48of48these48is48Not48considered48to48be48an48element48of48an48insurable48risk?
48
Speculative48risk48
Pure48risk48
Loss48cannot48be48catastrophic48
Loss48must48be48due48to48chance48-48answer--Speculative48risk
An48insurer48has48a48contractual48agreement48which48transfers48a48portion48of48its48risk48e
xposure48to48another48insurer.48What48type48of48contractual48arrangement48is48this?
Coinsurance48contract48
Mutuality48agreement48
Reinsurance48contract
Reciprocity48arrangement48-48answer--Reinsurance48contract
A48hold-harmless48clause48is48an48example48of48risk
Avoidance48
Retention48
Transfer48
Sharing48-48answer--Transfer
The48law48of48large48numbers48enables48an48insurer48to
Predict48losses48
Avoid48adverse48selection48
Classify48rates48
Assure48company48profiles48-48answer--Predict48losses
What48happens48when48an48initial48offer48is48answered48with48a48counteroffer?48
An48arbitrator48decides48on48a48compromise
The48counteroffer48is48legally48enforceable48
Initial48offer48is48void
Initial48offer48is48automatically48accepted48-48answer--Initial48offer48is48void
What48qualifies48as48acceptance48of48an48insurance48contract48offer?48
A48declined48policy
An48issued48policy
The48application48an48initial48premium48
The48initial48premium48only48-48answer--An48issued48policy
XYZ48Insurance48Company48gives48direct48authority48to48its48producers48to48sell48insuranc
e48through48an48agency48contract,48but48nothing48is48stated48regarding48the48collection48of4
8premiums.48Which48authority48grants48the48producer48the48right48to48collect48premiums?
Implied48authority48
Apparent48authority48
Express48authority48
INSURANCE EXAM
Dividends48from48a48stock48company48are48normally48sent48to:
Beneficiaries48
Shareholders
Policy48holders
Insureds48-48answer--Shareholders
Which48of48the48following48financial48products48creates48an48instant48estate,48no48matter48
when48the48date48of48death?
Mutual48funds48
Life48insurance
Certificate48of48deposit
Deferred48annuity48-48answer--Life48insurance
Which48of48the48following48outlines48the48authority48given48to48the48producer48on48behalf48o
f48the48insurer?48
Rebating48arrangement
Commingling48contract
Controlled48business48clause48
Producer48contract48-48answer--Producer48contract
Dividends48from48a48mutual48insurance48company48are48paid48to48whom?
Policyholders
Beneficiaries
Preferred48stockholders
Stockholders48-48answer--Policyholders
A48stock48insurance48company48is48owned48by48its
Officers
Board48directors48
Policyowners48
Shareholders48-48answer--Policyowners
A48reciprocal48insurer48typically48has48an48administrator48who48manages48the48premiums4
8collected48from48the48group's48members.48This48administrator48is48called48a(n)
Reciprocal48commissioner48
Attorney48general48
,Attorney-in-fact
Reciprocal48-48answer--Attorney-in-fact
which48reinsurance48contract48between48two48insurers48involves48an48automatic48sharing4
8of48the48risks48assumed?48
Arbitrage48reinsurance48
Facultative48reinsurance48
Excess48reinsurance48
Treaty48reinsurance48-48answer--Treaty48reinsurance
A48group-
owned48insurance48company48that48is48formed48to48assume48and48spread48the48liability48ri
sks48of48its48members48is48known48as48a
Risk48retention48group
Treaty48insurer48
Risk48assumption48group
Captive48insurer48-48answer--Risk48retention48group
Which48group48is48the48Do48not48Registry48designed48to48protect48against?
Telemarketers
Charities
Political48organizations48
Relatives48-48answer--Telemarketers
who48regulates48an48insurer's48claim48settlement48practices?
National48Association48of48Claim48Adjusters48
State48attorney48general48
National48Association48of48insurance48Commissioners48
State48insurance48departments48-48answer--State48insurance48departments
Which48of48the48following48is48Not48an48example48of48risk48retention?48
Becoming48aware48of48a48risk48and48taking48no48action48
Self-insuring48a48given48risk
Deciding48a48business48deal48is48risky48but48going48through48with48it48anyways
Not48doing48a48business48deal48after48deciding48it48would48be48too48risky48-48answer--
Not48doing48a48business48deal48after48deciding48it48would48be48too48risky
Which48of48the48following48describes48the48act48of48insuring48a48risk48against48possible48los
s?48
Risk48avoidance48
Risk48transfer48
Hazard48reduction48
Loss48management48-48answer--Risk48transfer
ABC48Company48is48attempting48to48minimize48the48severity48of48potential48losses48within4
8its48company.48The48company48is48engaged48in48risk
,Transference48
Retention
Reduction48
Avoidance48-48answer--Reduction
Which48of48these48statements48regarding48insurance48is48false?
One48way48insurers48deal48with48catastrophic48loss48is48through48reinsurance
As48the48number48of48insured48units48increases,48the48number48of48losses48decreases48
Speculative48risk48cannot48be48insured48
Pure48risk48can48be48insured48-48answer--
As48the48number48of48insured48units48increases,48the48number48of48losses48decreases
Purchasing48insurance48is48an48example48of48risk
Transference48
Avoidance48
Retention
Sharing48-48answer--Transference
A48business48becoming48incorporated48is48an48example48of48risk
Reduction48
Severance48
Retention48
Transfer48-48answer--Transfer
How48can48an48insurance48company48minimize48exposure48to48loss?48
Risk48concealing
Reinsuring48risks
Reissuance48
Risk48assumption48-48answer--Reinsuring48risks
An48insurable48risk48requires
That48the48chance48for48both48a48loss48or48gain48exists48
The48loss48must48be48catastrophic48
That48the48chance48of48loss48be48calculated
that48the48loss48must48be48incalculable48-48answer--
That48the48chance48of48loss48be48calculated
which48of48the48following48can48be48defined48as48"the48potential48for48loss"?
Hazard
Risk
Transference
Peril48-48answer--Risk
Which48term48describes48the48elimination48of48a48hazard?48
Risk48avoidance48
Risk48retention48
, Risk48transference48
Risk48pooling48-48answer--Risk48avoidance
which48one48of48these48is48Not48considered48to48be48an48element48of48an48insurable48risk?
48
Speculative48risk48
Pure48risk48
Loss48cannot48be48catastrophic48
Loss48must48be48due48to48chance48-48answer--Speculative48risk
An48insurer48has48a48contractual48agreement48which48transfers48a48portion48of48its48risk48e
xposure48to48another48insurer.48What48type48of48contractual48arrangement48is48this?
Coinsurance48contract48
Mutuality48agreement48
Reinsurance48contract
Reciprocity48arrangement48-48answer--Reinsurance48contract
A48hold-harmless48clause48is48an48example48of48risk
Avoidance48
Retention48
Transfer48
Sharing48-48answer--Transfer
The48law48of48large48numbers48enables48an48insurer48to
Predict48losses48
Avoid48adverse48selection48
Classify48rates48
Assure48company48profiles48-48answer--Predict48losses
What48happens48when48an48initial48offer48is48answered48with48a48counteroffer?48
An48arbitrator48decides48on48a48compromise
The48counteroffer48is48legally48enforceable48
Initial48offer48is48void
Initial48offer48is48automatically48accepted48-48answer--Initial48offer48is48void
What48qualifies48as48acceptance48of48an48insurance48contract48offer?48
A48declined48policy
An48issued48policy
The48application48an48initial48premium48
The48initial48premium48only48-48answer--An48issued48policy
XYZ48Insurance48Company48gives48direct48authority48to48its48producers48to48sell48insuranc
e48through48an48agency48contract,48but48nothing48is48stated48regarding48the48collection48of4
8premiums.48Which48authority48grants48the48producer48the48right48to48collect48premiums?
Implied48authority48
Apparent48authority48
Express48authority48
