Massachusetts Life and Health Insurance Exam Questions with complete solutions.
Insurance - (answer)Transfer of Risk
Risk - (answer)Uncertainty/ Possibility of Loss
Exposure - (answer)Risks for which the insurance company would be liable
Peril - (answer)Cause of Loss
Hazard - (answer)Something that causes an increase in the chance of loss
Physical Hazard - (answer)Hazard that can be seen
Moral Hazard - (answer)A belief that intentionally causing a loss is acceptable
Morale Hazard - (answer)Carelessness
STARR - (answer)Method of handling risk
S- Method of handling risks - (answer)Sharing
T- Method of handling risk - (answer)Transfer
A- Method of handling risk - (answer)Avoidance
R- Method of handling risk - (answer)Retention
R- Method of handling risk - (answer)Reduction
,Massachusetts Life and Health Insurance Exam Questions with complete solutions.
Contract Policy - (answer)An agreement between the insured and the insurer
Law of Large Numbers - (answer)The larger the group, the more accurate losses can be predicted
CANHAM Risks - (answer)Can be insured with the following characteristics
C- CANHAM Risks - (answer)Calculable
A- CANHAM Risks - (answer)Affordable
N- CANHAM Risks - (answer)Non- Catastrophic
H- CANHAM Risks - (answer)Homogeneous
A- CANHAM Risks - (answer)Accidental
M- CANHAM Risks - (answer)Measurable
Adverse Selection - (answer)risks that have a greater than average chance of loss
Reinsurance- - (answer)An insurance company sells some of its risk to other insurance companies.
Facultative Reinsurance - (answer)the reinsurer evaluates each risk before allowing the transfer
Treaty Reinsurance - (answer)the reinsurer accepts the transfer according to an agreement called a
treaty
,Massachusetts Life and Health Insurance Exam Questions with complete solutions.
Stock Insurer - (answer)An insurer that is owned by its stockholders and formed as a corporation for the
purpose of earning a profit for the stockholders.- Issues Non Par Policies
Mutual Insurer - (answer)An insurer that is owned by its policyholders and formed as a corporation for
the purpose of providing insurance to them.- Non Taxable dividends & Participating Polcies
Fraternal Insurer - (answer)provides insurance and other benefits
must be a member of the society to get the benefits
Reciprocal Insurers - (answer)unincorporated groups of people that provide insurance for one another
through individual indemnity agreements
Llyod's Associations - (answer)Organizations that provide support facilities for underwriters or groups of
individuals that accept insurance risk.
Risk Retention Group - (answer)A liability insurance company owned by its members, which are exposed
to similar liability risks by virtue of being in the same business or industry.
Risk Purchasing Groups - (answer)Groups of people with similar insurance needs who form an
organization to buy insurance as a group.
Self-insurance - (answer)a business that pays its own claims
Residual Market - (answer)insurance from the state or federal government
Insurance Company Locations - (answer)Domestic, Foreign, and Alien
Certificate of Authority - (answer)state license for an insurance company
, Massachusetts Life and Health Insurance Exam Questions with complete solutions.
Admitted or Authorized - (answer)state requires the insurance company to have a certificate of
authority
Non-admitted - (answer)unauthorized-insurance company not required to have a Certificate of
Authority from the state
Surplus Lines - (answer)any type of insurance for which there is no available market within the state,
and the coverage must be placed with a non admitted insurer
Methods of Marketing - (answer)- Independent
- Exclusive or captive
- General agents or managing general agents
- direct writing companies
Agency - (answer)The insurance agent acts on behalf of principal (Insurance Company)
Agent Authority - (answer)express, implied, apparent
Fiduciary Trust - (answer)- Promptly sends premiums to insurer
- Has knowledge of products
- Complies with laws and regulations
- Does not commingle funds
Legal Contract - (answer)Consideration, Legal Purpose, Offer (Made by Insured), Acceptance, Competent
Parties
Adhesion - (answer)Policy written by the insurance company
aleatory - (answer)not equal value - small premium for a large amount of coverage
Insurance - (answer)Transfer of Risk
Risk - (answer)Uncertainty/ Possibility of Loss
Exposure - (answer)Risks for which the insurance company would be liable
Peril - (answer)Cause of Loss
Hazard - (answer)Something that causes an increase in the chance of loss
Physical Hazard - (answer)Hazard that can be seen
Moral Hazard - (answer)A belief that intentionally causing a loss is acceptable
Morale Hazard - (answer)Carelessness
STARR - (answer)Method of handling risk
S- Method of handling risks - (answer)Sharing
T- Method of handling risk - (answer)Transfer
A- Method of handling risk - (answer)Avoidance
R- Method of handling risk - (answer)Retention
R- Method of handling risk - (answer)Reduction
,Massachusetts Life and Health Insurance Exam Questions with complete solutions.
Contract Policy - (answer)An agreement between the insured and the insurer
Law of Large Numbers - (answer)The larger the group, the more accurate losses can be predicted
CANHAM Risks - (answer)Can be insured with the following characteristics
C- CANHAM Risks - (answer)Calculable
A- CANHAM Risks - (answer)Affordable
N- CANHAM Risks - (answer)Non- Catastrophic
H- CANHAM Risks - (answer)Homogeneous
A- CANHAM Risks - (answer)Accidental
M- CANHAM Risks - (answer)Measurable
Adverse Selection - (answer)risks that have a greater than average chance of loss
Reinsurance- - (answer)An insurance company sells some of its risk to other insurance companies.
Facultative Reinsurance - (answer)the reinsurer evaluates each risk before allowing the transfer
Treaty Reinsurance - (answer)the reinsurer accepts the transfer according to an agreement called a
treaty
,Massachusetts Life and Health Insurance Exam Questions with complete solutions.
Stock Insurer - (answer)An insurer that is owned by its stockholders and formed as a corporation for the
purpose of earning a profit for the stockholders.- Issues Non Par Policies
Mutual Insurer - (answer)An insurer that is owned by its policyholders and formed as a corporation for
the purpose of providing insurance to them.- Non Taxable dividends & Participating Polcies
Fraternal Insurer - (answer)provides insurance and other benefits
must be a member of the society to get the benefits
Reciprocal Insurers - (answer)unincorporated groups of people that provide insurance for one another
through individual indemnity agreements
Llyod's Associations - (answer)Organizations that provide support facilities for underwriters or groups of
individuals that accept insurance risk.
Risk Retention Group - (answer)A liability insurance company owned by its members, which are exposed
to similar liability risks by virtue of being in the same business or industry.
Risk Purchasing Groups - (answer)Groups of people with similar insurance needs who form an
organization to buy insurance as a group.
Self-insurance - (answer)a business that pays its own claims
Residual Market - (answer)insurance from the state or federal government
Insurance Company Locations - (answer)Domestic, Foreign, and Alien
Certificate of Authority - (answer)state license for an insurance company
, Massachusetts Life and Health Insurance Exam Questions with complete solutions.
Admitted or Authorized - (answer)state requires the insurance company to have a certificate of
authority
Non-admitted - (answer)unauthorized-insurance company not required to have a Certificate of
Authority from the state
Surplus Lines - (answer)any type of insurance for which there is no available market within the state,
and the coverage must be placed with a non admitted insurer
Methods of Marketing - (answer)- Independent
- Exclusive or captive
- General agents or managing general agents
- direct writing companies
Agency - (answer)The insurance agent acts on behalf of principal (Insurance Company)
Agent Authority - (answer)express, implied, apparent
Fiduciary Trust - (answer)- Promptly sends premiums to insurer
- Has knowledge of products
- Complies with laws and regulations
- Does not commingle funds
Legal Contract - (answer)Consideration, Legal Purpose, Offer (Made by Insured), Acceptance, Competent
Parties
Adhesion - (answer)Policy written by the insurance company
aleatory - (answer)not equal value - small premium for a large amount of coverage
