Exam 5: Types of Insurers and Marketing Systems

The financial services field is currently experiencing consolidation and convergence.If both of these trends continue,in the future we should observe

Why are some mutual insurers referred to as "assessment mutuals"?

Which of the following statements about the sale of property and liability insurance through the direct response system is (are)true? I.Selling expenses are higher because market segmentation tends to be less precise than with other marketing methods. II.It is the most appropriate system for selling complex products.

Which of the following statements is (are)true with respect to the financial services industry? I.The number of firms operating in the industry continues to increase at a high rate. II.The Financial Modernization Act of 1999 permits financial institutions to compete in other financial markets outside their core business area.

The leaders of a religious group decided to start a life insurance organization to insure members of the religious group.The insurer will operate as a nonprofit organization,thus receiving favorable tax treatment.The insurer formed will be a

In 2008,Liberty Mutual Insurance Company acquired Safeco Insurance Company.This acquisition demonstrates which financial services industry trend?

All of the following statements about the independent agency system are true EXCEPT

All of the following statements about fraternal insurers are true EXCEPT

One type of insurer is a community-oriented health insurer.In most states,this insurer is set-up as a non-profit organization that provides coverage for hospital services,physicians' and surgeons' fees,and other medical services.This type of insurer is called a

Advantages of the direct response system for marketing life insurance include which of the following? I.Advertising can be specifically directed to selected markets. II.Complex products can be easily sold.

Which of the following statements about stock insurers is true?

Which of the following statements about mutual insurers is true?

Which of the following statements about a reciprocal exchange is (are)true? I.It usually specializes in health insurance. II.It is an unincorporated mutual insurance company.

Scott works in property and liability insurance marketing.He legally represents insurance purchasers,rather than insurance companies.Scott is paid a commission on the insurance placed with insurers.Scott is a(n)

Some investors decided to start an insurance company.Each investor contributed $50,000 to raise the capital required to charter a new company.Each investor received an ownership interest in the company.The company will raise additional capital by selling ownership rights to other investors.Under this type of organization,the customer and owner functions are separate.This type of insurer is called a

The demutualization process is expensive and time consuming.As an alternative to demutualization,many states have enacted legislation allowing a mutual company to reorganize as a company that directly or indirectly controls another insurer.The other insurer is a stock company that can issue additional shares of stock to raise capital.The reorganized company is called a

Salespersons of a direct writer are considered to be

RST Insurance is an interesting company.It doesn't have any agents.Instead,the company sells insurance through radio ads,telemarketers,and newspaper and magazine inserts.This distribution method is called

Temporary evidence of insurance until a policy is actually issued is provided by a(n)

Cathy just started a job with XYZ Manufacturing Company.She attended an orientation and was given a packet providing information about the various employee benefits XYZ offers.One item in the packet was a booklet and application form from an auto insurer.The insurer offers lower premiums to XYZ employees.The insurer's plan for selling individually-underwritten auto insurance to employees of XYZ Manufacturing Company is called