Preneed Prep Exam Questions and
Answers
Joint Memorandum -
Who
What
When
Why - Answer- Who: DOB, FSC, TDI
What: A joint agreement that established specific area of responsibilities for prepaid
funeral svc
.
When: 1995
Why : its creation was mandated by the Texas Civil Statutes
What is a preneed Funeral contract - Answer- Any written contract of agreement,
funded by an insurance policy, annuity contract or trust deposit, for the purpose of
furnishing or delivery of prepaid funeral benefits for the final disposition of a corpse at
the time of that individual's death
In regards to PreNeed Funeral policies
What 5 responsibilities does TDI, Texas Department of Insurance have - Answer-
Regulating & licensing insurers which propose to issue insurance products for prepaid
funeral contract funding
Regs & licenses individuals who perform acts of insurance agents
Regulates & approves insurance products designed to fund prepaid funeral contracts
Regulates unfair trade practices relating to the sale of insurance funded contracts for
prepaid funerals
Regulates unfair claims practices of insurance companies
Agent - Answer- An authorized representative of the parties to a contract
Define Agency - Answer- A group of insurance agents, most often managed by a
"general agent" who work together representing one or more insurance companies.
, Difference between prepaid prearrangement and preneed funeral - Answer- DOB uses
Prepaid
TDI uses Prepaid interchangeably with Prearrangement
FTC Preneed encompasses both pre - paid and arrangement
In regards to PreNeed Funeral policies
What 5 responsibilities does DOB, Texas Department of Banking have - Answer- •
Issuing renewal & cancellation of permits to sell PFS merchandise
• Approve funeral benefit contracts & contract forms
• Approve release & withdrawal of funds under certain circumstances
• Est. reporting requirements & conducting audits/examinations of records
• Maintaining guaranty funds for PF benefits maintained in trusts
In regards to PreNeed Funeral policies
What are the 2 areas of responsibilities for FSC, Texas Funeral Service Commission -
Answer- 1) Licensing and regulating all funeral directors and embalmers
2) taking actions against violators
Life Insurance - Answer- a contract between an insurance company and policy owner
which provides a death benefit immediately or in the future which is usually higher than
the initial premiums paid to purchase the policy
Define Insurance Agent
Insurance Agents are also referred to as - Answer- Any person who solicits insurance
takes applications, receives or transmits premium, receives or delivers policies
AKA affiliates
Annuity - Answer- Insurance contracts which allow the steady accumulation of
premiums at interest. At the death of the owner of the policy, annuities return premiums
paid and interest earned, but do not produce a death benefit like life insurances
Trust Account - Answer- A non-insurance account, normally held at a bank or trust
institution, created and maintained for the benefit of a prepaid funeral customer. A
trustee administers and supervises the account under the regulatory authority of the
DOB.
Fiduciary responsibility - Answer- The act of conducting oneself in accordance to the
highest moral and ethical standards
Answers
Joint Memorandum -
Who
What
When
Why - Answer- Who: DOB, FSC, TDI
What: A joint agreement that established specific area of responsibilities for prepaid
funeral svc
.
When: 1995
Why : its creation was mandated by the Texas Civil Statutes
What is a preneed Funeral contract - Answer- Any written contract of agreement,
funded by an insurance policy, annuity contract or trust deposit, for the purpose of
furnishing or delivery of prepaid funeral benefits for the final disposition of a corpse at
the time of that individual's death
In regards to PreNeed Funeral policies
What 5 responsibilities does TDI, Texas Department of Insurance have - Answer-
Regulating & licensing insurers which propose to issue insurance products for prepaid
funeral contract funding
Regs & licenses individuals who perform acts of insurance agents
Regulates & approves insurance products designed to fund prepaid funeral contracts
Regulates unfair trade practices relating to the sale of insurance funded contracts for
prepaid funerals
Regulates unfair claims practices of insurance companies
Agent - Answer- An authorized representative of the parties to a contract
Define Agency - Answer- A group of insurance agents, most often managed by a
"general agent" who work together representing one or more insurance companies.
, Difference between prepaid prearrangement and preneed funeral - Answer- DOB uses
Prepaid
TDI uses Prepaid interchangeably with Prearrangement
FTC Preneed encompasses both pre - paid and arrangement
In regards to PreNeed Funeral policies
What 5 responsibilities does DOB, Texas Department of Banking have - Answer- •
Issuing renewal & cancellation of permits to sell PFS merchandise
• Approve funeral benefit contracts & contract forms
• Approve release & withdrawal of funds under certain circumstances
• Est. reporting requirements & conducting audits/examinations of records
• Maintaining guaranty funds for PF benefits maintained in trusts
In regards to PreNeed Funeral policies
What are the 2 areas of responsibilities for FSC, Texas Funeral Service Commission -
Answer- 1) Licensing and regulating all funeral directors and embalmers
2) taking actions against violators
Life Insurance - Answer- a contract between an insurance company and policy owner
which provides a death benefit immediately or in the future which is usually higher than
the initial premiums paid to purchase the policy
Define Insurance Agent
Insurance Agents are also referred to as - Answer- Any person who solicits insurance
takes applications, receives or transmits premium, receives or delivers policies
AKA affiliates
Annuity - Answer- Insurance contracts which allow the steady accumulation of
premiums at interest. At the death of the owner of the policy, annuities return premiums
paid and interest earned, but do not produce a death benefit like life insurances
Trust Account - Answer- A non-insurance account, normally held at a bank or trust
institution, created and maintained for the benefit of a prepaid funeral customer. A
trustee administers and supervises the account under the regulatory authority of the
DOB.
Fiduciary responsibility - Answer- The act of conducting oneself in accordance to the
highest moral and ethical standards
