Question 1

The United States' insurance industry is comprised of how many life insurance companies?

Accepted Answer

A) 500 
B) 800 
C) 900 
D) 1,200 
A) 500 
B) 800 
C) 900 
D) 1,200

Question 2

In general,all of the following statements about Lloyd's of London are true,except:

Accepted Answer

A) Members have unlimited personal liability 
B) Individual members ("names")cooperate in groups known as syndicates 
C) If a syndicate is unable to pay its portion of a loss, the insured has the right to collect that unpaid portion from Lloyd's of London 
D) Lloyd's is not as pre-eminent in the insurance marketplace today as it once was 
A) Members have unlimited personal liability 
B) Individual members ("names")cooperate in groups known as syndicates 
C) If a syndicate is unable to pay its portion of a loss, the insured has the right to collect that unpaid portion from Lloyd's of London 
D) Lloyd's is not as pre-eminent in the insurance marketplace today as it once was

Question 3

To obtain a right of ownership in a stock insurance company,you should contact:

Accepted Answer

A) an independent agent 
B) a direct writer 
C) a securities dealer 
D) the insurance commissioner 
A) an independent agent 
B) a direct writer 
C) a securities dealer 
D) the insurance commissioner

Question 4

A mutual insurer

Accepted Answer

A) is not a corporation 
B) is run by an attorney in fact 
C) is legally a nonprofit organization 
D) technically is a charitable organization 
A) is not a corporation 
B) is run by an attorney in fact 
C) is legally a nonprofit organization 
D) technically is a charitable organization

Question 5

The insurers efficiency and underwriting practices are much more important to the consumer than the insurers legal form of organization.

Accepted Answer

A) True 
 B)False

Question 6

Lloyd's of London is the largest mutual insurance company in the world measured by total premiums written.

Accepted Answer

A) True 
 B)False

Question 7

Lloyd's of London is not an insurance company. What is it and how does it provide insurance?

Accepted Answer

Lloyd's of London is not an insurance co

Question 8

Lloyd's of London

Accepted Answer

A) is a large property liability insurance company with head quarters in London 
B) sells stock 
C) is a marketplace where separate syndicates accept exposures for their own accounts 
D) sells insurance directly to the public 
A) is a large property liability insurance company with head quarters in London 
B) sells stock 
C) is a marketplace where separate syndicates accept exposures for their own accounts 
D) sells insurance directly to the public

Question 9

Reciprocal exchanges are operated by managers known as notary publics.

Accepted Answer

A) True 
 B)False

Question 10

The Gramm-Leach-Bliley (GLB)Act:

Accepted Answer

A) allows banks to acquire insurance companies 
B) prohibits banks from acquiring insurance companies 
C) allows banks to form insurance companies 
D) both a and c 
A) allows banks to acquire insurance companies 
B) prohibits banks from acquiring insurance companies 
C) allows banks to form insurance companies 
D) both a and c

Question 11

Reciprocal exchanges provide a considerable amount of automobile insurance.

Accepted Answer

A) True 
 B)False

Question 12

The Gramm-Leach-Bliley Act is also known as the:

Accepted Answer

A) Financial Security Act 
B) Financial Services Reform Act 
C) Fiscal Integrity and Security Reform Act 
D) Consolidated Omnibus Budget Reconciliation Act 
A) Financial Security Act 
B) Financial Services Reform Act 
C) Fiscal Integrity and Security Reform Act 
D) Consolidated Omnibus Budget Reconciliation Act

Question 13

Which of the following statements about stock insurance companies is true?

Accepted Answer

A) stockholders provide operating capital and receive dividends 
B) they are nonprofit organizations 
C) the insureds own the company 
D) they are more likely to provide lower cost insurance than mutuals 
A) stockholders provide operating capital and receive dividends 
B) they are nonprofit organizations 
C) the insureds own the company 
D) they are more likely to provide lower cost insurance than mutuals

Question 14

Lloyd's of London:

Accepted Answer

A) is an unincorporated, not for profit insurer 
B) is partly a mutual company and partly a stock company 
C) sells mainly homeowners insurance to residents of London 
D) operates in the surplus lines and marine insurance markets 
A) is an unincorporated, not for profit insurer 
B) is partly a mutual company and partly a stock company 
C) sells mainly homeowners insurance to residents of London 
D) operates in the surplus lines and marine insurance markets

Question 15

To own a part of a stock insurance company,a person must purchase an insurance policy from that company.

Accepted Answer

A) True 
 B)False

Question 16

A mutual insurance company might be characterized by all of the following except:

Accepted Answer

A) Policyholder ownership 
B) Non profit operations 
C) Taxable dividends to owners 
D) Assessable policies 
A) Policyholder ownership 
B) Non profit operations 
C) Taxable dividends to owners 
D) Assessable policies

Question 17

A reciprocal exchange is:

Accepted Answer

A) a nonprofit corporation 
B) unincorporated 
C) a mutual insurance company 
D) a federal insurance company 
A) a nonprofit corporation 
B) unincorporated 
C) a mutual insurance company 
D) a federal insurance company

Question 18

Private insurers are classified according to ownership arrangements. Distinct types mentioned in the text include all the following except:

Accepted Answer

A) stock companies 
B) mutual companies 
C) reciprocals 
D) reinsurer 
A) stock companies 
B) mutual companies 
C) reciprocals 
D) reinsurer

Question 19

A stock insurer is managed by:

Accepted Answer

A) an attorney-in-fact 
B) an agency supervisor 
C) a fraternal representative 
D) representatives chosen by shareholders 
A) an attorney-in-fact 
B) an agency supervisor 
C) a fraternal representative 
D) representatives chosen by shareholders

Question 20

The Gramm-Leach-Bliley Act (1999)allows banks,security dealers,and insurance companies to combine together to form financial services holding companies.

Accepted Answer

A) True 
 B)False

Exam 4: Financial Services Companies

The United States' insurance industry is comprised of how many life insurance companies?

In general,all of the following statements about Lloyd's of London are true,except:

To obtain a right of ownership in a stock insurance company,you should contact:

A mutual insurer

The insurers efficiency and underwriting practices are much more important to the consumer than the insurers legal form of organization.

Lloyd's of London is the largest mutual insurance company in the world measured by total premiums written.

Lloyd's of London is not an insurance company. What is it and how does it provide insurance?

Lloyd's of London

Reciprocal exchanges are operated by managers known as notary publics.

The Gramm-Leach-Bliley (GLB)Act:

Reciprocal exchanges provide a considerable amount of automobile insurance.

The Gramm-Leach-Bliley Act is also known as the:

Which of the following statements about stock insurance companies is true?

Lloyd's of London:

To own a part of a stock insurance company,a person must purchase an insurance policy from that company.

A mutual insurance company might be characterized by all of the following except:

A reciprocal exchange is:

Private insurers are classified according to ownership arrangements. Distinct types mentioned in the text include all the following except:

A stock insurer is managed by:

The Gramm-Leach-Bliley Act (1999)allows banks,security dealers,and insurance companies to combine together to form financial services holding companies.

Fundamentals and Terminology

Defining the Insurable Event

Risk Management

Insurance Occupations

the Insurance Market: the Economic Problem

Insurance Regulation

Insurance Contracts

Basic Property and Liability Insurance Contracts

Homeowners Insurance

the Personal Auto Policy

Professional Financial Planning

Life Insurance Policies

Standard Life Insurance Contract Provisions And Options

Annuities

Medical Expense and Disability Insurance

Advanced Topics in Risk Management

Commercial Property Insurance

Commercial Liability Insurance

Bonding,Crime Insurance and Reinsurance

Employee Benefits

Social Security

Unemployment and Workers Compensation Insurance

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