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Virginia life insurance Questions and
Correct Answers/ Latest Update / Already
Graded
Commercial Insurers
Ans: are in the business of selling insurance for a profit.
Commercial insurance is divided into two main groups: stock
and mutual insurers.
Stock Companies
Ans: organized and incorporated under state laws for the
purpose of making a profit for its stockholders (shareholders).
Nonparticipating insurer
Ans: Stock insurers policyholders do not participate in
receiving dividends, unless they are also a stockholder of the
company.
stock dividend
Ans: Paid to the stockholders
Responsible to stockholders
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Ans: Directors and officers
Mutalization
Ans: Transformation of a stock insurer into a mutual insurer
Demutualization
Ans: Transformation of a mutual insurer into a stock insurer.
Taxation
Ans: Dividends are subject to taxation because they are
considered profit
Mutual Companies
Ans: Owned by the policy owners and issue participating
policies.
Mutual Insurer
Ans: An insurer that is owned by its policyholders and formed
as a corporation for the purpose of providing insurance to them.
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Mutual companies also
Ans: When declared are paid to the policyholders
Dividends from a mutual insurer
Ans: Are not subject to taxation because the dividends are
considered to be a return premium
Exception to taxation of dividends
Ans: If the policy wonder chooses to let the dividends sit and
collect interest. Accumulated interest would be taxable
Mixed Insurer
Ans: A company that operates as both a participating and
nonparticipating insurer. Dividends can never be guaranteed
regardless of the type of company offering them
Strong Assessment Mutual Companies
Ans: Are classified by the way they charge premium.
Pure Assessment Mutual Company
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Ans: Operates on the basis of loss-sharing by group members.
No premium is payable in advance. Instead, each
member is assessed an individual portion of losses that actually
occur.
Advanced premium assessment mutual
Ans: charges a premium at the beginning of the policy period.
If the original premiums exceed the operating expenses and
losses, the surplus is returned to the policyholders as dividends.
Fraternal Benefit Societies
Ans: Special type of mutual companies/nonprofit religious,
ethnic, or charitable organizations that provides insurance
solely to their members. Must be formed for reasons other than
obtaining insurance
Risk Retention Group
Ans: Mutual companies formed by a group of people in the
same industry or profession
service provider
All rights reserved © 2025/ 2026 |
Virginia life insurance Questions and
Correct Answers/ Latest Update / Already
Graded
Commercial Insurers
Ans: are in the business of selling insurance for a profit.
Commercial insurance is divided into two main groups: stock
and mutual insurers.
Stock Companies
Ans: organized and incorporated under state laws for the
purpose of making a profit for its stockholders (shareholders).
Nonparticipating insurer
Ans: Stock insurers policyholders do not participate in
receiving dividends, unless they are also a stockholder of the
company.
stock dividend
Ans: Paid to the stockholders
Responsible to stockholders
All rights reserved © 2025/ 2026 |
, Page |2
Ans: Directors and officers
Mutalization
Ans: Transformation of a stock insurer into a mutual insurer
Demutualization
Ans: Transformation of a mutual insurer into a stock insurer.
Taxation
Ans: Dividends are subject to taxation because they are
considered profit
Mutual Companies
Ans: Owned by the policy owners and issue participating
policies.
Mutual Insurer
Ans: An insurer that is owned by its policyholders and formed
as a corporation for the purpose of providing insurance to them.
All rights reserved © 2025/ 2026 |
, Page |3
Mutual companies also
Ans: When declared are paid to the policyholders
Dividends from a mutual insurer
Ans: Are not subject to taxation because the dividends are
considered to be a return premium
Exception to taxation of dividends
Ans: If the policy wonder chooses to let the dividends sit and
collect interest. Accumulated interest would be taxable
Mixed Insurer
Ans: A company that operates as both a participating and
nonparticipating insurer. Dividends can never be guaranteed
regardless of the type of company offering them
Strong Assessment Mutual Companies
Ans: Are classified by the way they charge premium.
Pure Assessment Mutual Company
All rights reserved © 2025/ 2026 |
, Page |4
Ans: Operates on the basis of loss-sharing by group members.
No premium is payable in advance. Instead, each
member is assessed an individual portion of losses that actually
occur.
Advanced premium assessment mutual
Ans: charges a premium at the beginning of the policy period.
If the original premiums exceed the operating expenses and
losses, the surplus is returned to the policyholders as dividends.
Fraternal Benefit Societies
Ans: Special type of mutual companies/nonprofit religious,
ethnic, or charitable organizations that provides insurance
solely to their members. Must be formed for reasons other than
obtaining insurance
Risk Retention Group
Ans: Mutual companies formed by a group of people in the
same industry or profession
service provider
All rights reserved © 2025/ 2026 |
