Exam 6: Insurance Company Operations

Easy Pay Insurance Company may require insureds who suffer a loss to submit a sworn statement to substantiate that a loss occurred and to describe the conditions under which the loss occurred.This sworn statement is called a(n)

Catastrophe bonds are made available to institutional investors in the capital markets through an entity that is specially created for that purpose.This is entity is called a

Which of the following is a function of the marketing department of an insurance company?

All of the following statements about life insurance company investments are true EXCEPT

State insurance regulators require LMN Life Insurance Company to maintain a separate account.The assets in the separate account would support the liabilities for which of the following products?

A reinsurance contract that is entered into on a case-by-case basis after an application for insurance is received by a primary insurer is called

The process of transferring risk to the capital markets through the use of financial instruments such as bonds,futures contracts,and options is known as

Which of the following statements about treaty reinsurance is true?

Which of the following statements about reinsurance is true?

Granite Insurance Company entered into a treaty reinsurance agreement with Rock Solid Reinsurance (RSR).Granite's retention limit is $400,000 and RSR agreed to provide reinsurance for up to $2.0 million.If Granite writes an $800,000 policy,RSR is responsible for 50 percent of the losses.If Granite insures a $1.6 million risk,RSR is responsible for 25 percent of any losses.What type of reinsurance arrangement did Granite enter into with RSR?

Mark has been an underwriter for 20 years.An application he recently reviewed looked odd to him.The building value in the application seemed far too high,and Mark suspected the applicant might be planning to destroy the property after it is insured.Mark hired an outside firm to investigate the applicant and to prepare a report about the applicant.This report is called a(n)

Common sources of underwriting information for life and health insurance include all of the following EXCEPT

Functions of an insurance company's legal department include which of the following? I.Lobbying for legislation favorable to the insurance industry. II.Drafting policy provisions.

Liability Insurance Company (LIC)was approached by a regional airline to see if LIC would write the airline's liability coverage.LIC agreed to write the coverage and entered into an agreement with a reinsurer.Under the agreement,LIC retains 25 percent of the premium and pays 25 percent of the losses,and the reinsurer receives 75 percent of the premium and pays 75 percent of the losses.This reinsurance arrangement is best described as

Which of the following statements about claim settlement is (are)true? I.The fair payment of claims requires an insurer to adopt a very liberal claims policy. II.To prevent lawsuits,an insurer should provide no personal assistance to a claimant other than that which is required by contractual obligations.

The function of an actuary is to

Jan is employed by an insurance company.She reviews applications to determine whether her company should insure the applicant.If insurable,Jan assigns the applicant to a rating category based on the applicant's degree of risk.Jan is a(n)

The price per unit of insurance is called the

Beverly lives in a sparsely populated area in northern Idaho.Some insurance companies marketing coverage in northern Idaho cannot afford to have full-time adjustors there.Several insurers hire Beverly to adjust claims for their insureds.Beverly charges the insurers a fee for each claim that she settles.Beverly is a(n)

Ross studied engineering in college.After graduation,he went to work for an insurance company.Ross visits properties insured by his company.He conducts inspections and makes recommendations about alarm systems,sprinkler systems,and building construction.In what functional area does Ross work?