DC life and health insurance exam ACTUAL
QUESTIONS AND CORRECT ANSWERS
Taking receipt of premiums and holding them for the insurance company is an example of... -
Correct answers✔Fiduciary responsibility
Variable life insurance - Correct answers✔life insurance in which the benefits are a function of
the returns being generated on the investments selected by the policyholder?
Demutualization - Correct answers✔When a mutual company is converted into a stock company
Lloyd's of London - Correct answers✔An association formed to underwrite and issue insurance
light coverage on certain items and areas that might otherwise be uninsurable
Ceding company - Correct answers✔The company transferring the risk to a reinsurance company
in a reinsurance arrangement
Home service insurance - Correct answers✔industrial insurance sold by home service or debit
insurance companies
Home service insurers: Face amounts? - Correct answers✔Very small; Usually $1000-$2000
Home service insurers: collection of Premiums? - Correct answers✔Collected weekly, door to
door, by agents
, NAIC is responsible for - Correct answers✔Resolving insurance regulatory problems which is
designed to bring uniformity from state to state.
State Guaranty Association - Correct answers✔protect policy owners in the event of any
insurance company going out of business, becoming insolvent, or the in ability to pay claims
Independent Rating Services - Correct answers✔= are credit rating agencies that rate or "grade"
the financial strength and stability of insurers;
Independent Rating Services: RATINGS are based on... - Correct answers✔1) Claims, 2)
Reserves and 3) Company Profits.
What are the 4 essential elements that an insurance contract must have in order to be legally
binding? - Correct answers✔1) Offer and Acceptance
2) Consideration
3) Legal Purpose
4) Competent Parties
An offer is made when the _______ submits an application for insurance to the _____________.
- Correct answers✔When the APPLICANT submits an application to the INSURANCE
COMPANY.
How is the Offer for insurance accepted? - Correct answers✔When it's approved by the
insurance company's underwriters
Legal Purpose - Correct answers✔An insurance contract with
QUESTIONS AND CORRECT ANSWERS
Taking receipt of premiums and holding them for the insurance company is an example of... -
Correct answers✔Fiduciary responsibility
Variable life insurance - Correct answers✔life insurance in which the benefits are a function of
the returns being generated on the investments selected by the policyholder?
Demutualization - Correct answers✔When a mutual company is converted into a stock company
Lloyd's of London - Correct answers✔An association formed to underwrite and issue insurance
light coverage on certain items and areas that might otherwise be uninsurable
Ceding company - Correct answers✔The company transferring the risk to a reinsurance company
in a reinsurance arrangement
Home service insurance - Correct answers✔industrial insurance sold by home service or debit
insurance companies
Home service insurers: Face amounts? - Correct answers✔Very small; Usually $1000-$2000
Home service insurers: collection of Premiums? - Correct answers✔Collected weekly, door to
door, by agents
, NAIC is responsible for - Correct answers✔Resolving insurance regulatory problems which is
designed to bring uniformity from state to state.
State Guaranty Association - Correct answers✔protect policy owners in the event of any
insurance company going out of business, becoming insolvent, or the in ability to pay claims
Independent Rating Services - Correct answers✔= are credit rating agencies that rate or "grade"
the financial strength and stability of insurers;
Independent Rating Services: RATINGS are based on... - Correct answers✔1) Claims, 2)
Reserves and 3) Company Profits.
What are the 4 essential elements that an insurance contract must have in order to be legally
binding? - Correct answers✔1) Offer and Acceptance
2) Consideration
3) Legal Purpose
4) Competent Parties
An offer is made when the _______ submits an application for insurance to the _____________.
- Correct answers✔When the APPLICANT submits an application to the INSURANCE
COMPANY.
How is the Offer for insurance accepted? - Correct answers✔When it's approved by the
insurance company's underwriters
Legal Purpose - Correct answers✔An insurance contract with
