RMI3011 EXAM 2 QUESTIONS AND ANSWERS WITH
A COMPLETE STUDY GUIDE TESTED AND
APPROVED 2025/2026 NEWEST
In module 7 we discussed responsibilities of regulators. Which parts of insurance operations
are regulated?
a. Rates only
b. Licensing only
c. Contractual provisions only
d. Agents/brokers activites only
e. Virtually all aspects of insurers are regulated
f. Most insurer aspects are unregulated --CORRECT ANSWER--e. Virtually all aspects of
insurers are regulated
In module 7, when discussing the regulation of rates we discussed the basic requirements of
rate regulation. They include:
a. Rates should be adequate
b. Rates should not be excessive
c. Rates should encourage loss control
d. Rates should allocate cost burden fairly among insureds
e. All of the above
f. None of the above --CORRECT ANSWER--e. All of the above
In module 7, when discussing the regulation of agents activities, some banned agent activities
include:
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,a. Twisting
b. Commissions
c. Licensing
d. Policy writing
e. All of the above
f. None of the above --CORRECT ANSWER--a. Twisting
In module 7, when discussing regulating contract provisions, the regulator is responsible for
protecting the public against:
a. Deceptive language
b. Misleading language
c. Unfair contract provisions
d. All of the above
e. None of the above --CORRECT ANSWER--d. All of the above
In module 7 we discussed some insurance regulation basics. Which of the following are true?
I. Insurance is regulated at the state level
II. The National Association of Insurance Commissioners (NAIC) drafts model laws
III. The insurance commissioners are charged with enforcing the laws
a) I only
b) II only
c) III only
d) I and II
e) I and III
f) II and III
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,g) I, II, & III --CORRECT ANSWER--g) I, II, & III
In module 7 we discussed insurance regulation. Why is insurance regulated?
a. All insurance is legally required
b. Premiums are paid well after benefits are received
c. Complex legal contracts
d. All of the above
e. None of the above --CORRECT ANSWER--c. Complex legal contracts
In module 7 we discussed state vs federal regulation. Arguments for state regulation include:
a. State regulation is ineffective for large insurers
b. Federal regulation would be less effective and more costly
c. State regulation is more flexible and can respond more quickly to local issues
d. Need for a two tier system
e. All of the above
f. None of the above --CORRECT ANSWER--c. State regulation is more flexible and can
respond more quickly to local issues
In module 7 we discussed insurance regulation. Which of the following are true regarding
regulating solvency?
I. Ensure that insurer is holding enough capital to minimize likelihood of bankruptcy
II. Manage guaranty funds
III. Liquidate insolvent insurers
a) I only
b) II only
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, c) III only
d) I and II
e) I and III
f) II and III
g) I, II, & III --CORRECT ANSWER--g) I, II, & III
In module 7, regulation of insurance, we discussed the effects of regulation. One of the
effects of regulation is:
a. Regulation reduces costs
b. Regulation makes consumers more vulnerable
c. Regulation increases market volatility
d. Regulation makes rates quicker to react to risk changes
e. All of the above
f. None of the above --CORRECT ANSWER--f. None of the above
In module 7, regulation of insurance, we discussed where regulation is going. One area of
insurance that may be more of a focus of regulation going forward is:
a. Availability
b. Affordability
c. County level regulation
d. Reduction in regulation
e. All of the above
f. None of the above --CORRECT ANSWER--a. Availability
In module 8 examples of government provided personal insurance include:
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A COMPLETE STUDY GUIDE TESTED AND
APPROVED 2025/2026 NEWEST
In module 7 we discussed responsibilities of regulators. Which parts of insurance operations
are regulated?
a. Rates only
b. Licensing only
c. Contractual provisions only
d. Agents/brokers activites only
e. Virtually all aspects of insurers are regulated
f. Most insurer aspects are unregulated --CORRECT ANSWER--e. Virtually all aspects of
insurers are regulated
In module 7, when discussing the regulation of rates we discussed the basic requirements of
rate regulation. They include:
a. Rates should be adequate
b. Rates should not be excessive
c. Rates should encourage loss control
d. Rates should allocate cost burden fairly among insureds
e. All of the above
f. None of the above --CORRECT ANSWER--e. All of the above
In module 7, when discussing the regulation of agents activities, some banned agent activities
include:
Page 1 of 55
,a. Twisting
b. Commissions
c. Licensing
d. Policy writing
e. All of the above
f. None of the above --CORRECT ANSWER--a. Twisting
In module 7, when discussing regulating contract provisions, the regulator is responsible for
protecting the public against:
a. Deceptive language
b. Misleading language
c. Unfair contract provisions
d. All of the above
e. None of the above --CORRECT ANSWER--d. All of the above
In module 7 we discussed some insurance regulation basics. Which of the following are true?
I. Insurance is regulated at the state level
II. The National Association of Insurance Commissioners (NAIC) drafts model laws
III. The insurance commissioners are charged with enforcing the laws
a) I only
b) II only
c) III only
d) I and II
e) I and III
f) II and III
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,g) I, II, & III --CORRECT ANSWER--g) I, II, & III
In module 7 we discussed insurance regulation. Why is insurance regulated?
a. All insurance is legally required
b. Premiums are paid well after benefits are received
c. Complex legal contracts
d. All of the above
e. None of the above --CORRECT ANSWER--c. Complex legal contracts
In module 7 we discussed state vs federal regulation. Arguments for state regulation include:
a. State regulation is ineffective for large insurers
b. Federal regulation would be less effective and more costly
c. State regulation is more flexible and can respond more quickly to local issues
d. Need for a two tier system
e. All of the above
f. None of the above --CORRECT ANSWER--c. State regulation is more flexible and can
respond more quickly to local issues
In module 7 we discussed insurance regulation. Which of the following are true regarding
regulating solvency?
I. Ensure that insurer is holding enough capital to minimize likelihood of bankruptcy
II. Manage guaranty funds
III. Liquidate insolvent insurers
a) I only
b) II only
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, c) III only
d) I and II
e) I and III
f) II and III
g) I, II, & III --CORRECT ANSWER--g) I, II, & III
In module 7, regulation of insurance, we discussed the effects of regulation. One of the
effects of regulation is:
a. Regulation reduces costs
b. Regulation makes consumers more vulnerable
c. Regulation increases market volatility
d. Regulation makes rates quicker to react to risk changes
e. All of the above
f. None of the above --CORRECT ANSWER--f. None of the above
In module 7, regulation of insurance, we discussed where regulation is going. One area of
insurance that may be more of a focus of regulation going forward is:
a. Availability
b. Affordability
c. County level regulation
d. Reduction in regulation
e. All of the above
f. None of the above --CORRECT ANSWER--a. Availability
In module 8 examples of government provided personal insurance include:
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