Question 1

What explains the recent increase in many large insurance companies conversion to stockholder controlled companies?

Accepted Answer

A) Pressure from policyholders. 
B) Additional premiums. 
C) Access to equity markets. 
D) Tax concerns. 
E) Regulatory requirement. 
A) Pressure from policyholders. 
B) Additional premiums. 
C) Access to equity markets. 
D) Tax concerns. 
E) Regulatory requirement.

Question 2

An insurance company collected $31.0 million in premiums and disbursed $28 million in losses.Loss adjustment expenses amounted to $5.0 million.The firm is profitable

Accepted Answer

A) if dividends paid to policyholders is $4 million and income generated on investments is $4 million. 
B) if dividends paid to policyholders is $10 million and income generated on investments is $14 million. 
C) if dividends paid to policyholders is $6 million and income generated on investments is $2 million. 
D) if dividends paid to policyholders is $10 million and income generated on investments is $4 million. 
E) if dividends paid to policyholders is $4 million and income generated on investments is $2 million. 
A) if dividends paid to policyholders is $4 million and income generated on investments is $4 million. 
B) if dividends paid to policyholders is $10 million and income generated on investments is $14 million. 
C) if dividends paid to policyholders is $6 million and income generated on investments is $2 million. 
D) if dividends paid to policyholders is $10 million and income generated on investments is $4 million. 
E) if dividends paid to policyholders is $4 million and income generated on investments is $2 million.

Question 3

Insurance companies have resisted the investment in technology that banks and other financial service firms have pursued.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following insurance products protects a lender against a borrower's death prior to repayment of the debt?

Accepted Answer

A) Credit life. 
B) Universal life. 
C) Whole life. 
D) Endowment life. 
E) Variable life. 
A) Credit life. 
B) Universal life. 
C) Whole life. 
D) Endowment life. 
E) Variable life.

Question 5

Calculate the annual cash flows of a $500,000, 12-year fixed-payment annuity earning a guaranteed 6 percent per year if annual payments are to begin at the end of the current year.

Accepted Answer

A) $59,638.51. 
B) $56,262.75. 
C) $29,819.26. 
D) $83,841.52. 
E) $28,131.37. 
A) $59,638.51. 
B) $56,262.75. 
C) $29,819.26. 
D) $83,841.52. 
E) $28,131.37.

Question 6

As of 2015, the Federal Reserve oversees approximately one-third of U.S.insurance company assets.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following involves fixed premium payments and a benefit payout at the time of death that will depend on investment returns over the life of the policy?

Accepted Answer

A) Term life. 
B) Variable life. 
C) Whole life. 
D) Endowment life. 
E) Universal life. 
A) Term life. 
B) Variable life. 
C) Whole life. 
D) Endowment life. 
E) Universal life.

Question 8

Commercial banks sold over 25% of fixed-return annuities, an insurance product, in 2015.

Accepted Answer

A) True 
 B)False

Question 9

Economies of scope represent the principal advantage of group life over ordinary life policies for insurance companies.

Accepted Answer

A) True 
 B)False

What explains the recent increase in many large insurance companies conversion to stockholder controlled companies?

An insurance company collected $31.0 million in premiums and disbursed $28 million in losses.Loss adjustment expenses amounted to $5.0 million.The firm is profitable

Insurance companies have resisted the investment in technology that banks and other financial service firms have pursued.

Which of the following insurance products protects a lender against a borrower's death prior to repayment of the debt?

Calculate the annual cash flows of a $500,000, 12-year fixed-payment annuity earning a guaranteed 6 percent per year if annual payments are to begin at the end of the current year.

As of 2015, the Federal Reserve oversees approximately one-third of U.S.insurance company assets.

Which of the following involves fixed premium payments and a benefit payout at the time of death that will depend on investment returns over the life of the policy?

Commercial banks sold over 25% of fixed-return annuities, an insurance product, in 2015.

Economies of scope represent the principal advantage of group life over ordinary life policies for insurance companies.

Why Are Financial Institutions Special

Financial Services: Depository Institutions

Financial Services: Finance Companies

Financial Services: Securities Brokerage and Investment Banking

Financial Services: Mutual Funds and Hedge Funds

Risks of Financial Institutions

Interest Rate Risk I

Interest Rate Risk II

Credit Risk: Individual Loan Risk

Credit Risk: Loan Portfolio and Concentration Risk

Liquidity Risk

Foreign Exchange Risk

Sovereign Risk

Market Risk

Off-Balance-Sheet Risk

Technology and Other Operational Risks

Fintech Risks

Liability and Liquidity Management

Deposit Insurance and Other Liability Guarantees

Capital Adequacy

Product and Geographic Expansion

Futures and Forwards

Options, Caps, Floors, and Collars

Swaps

Loan Sales

Securitization

Filters

Exam 6: Financial Services: Insurance

What explains the recent increase in many large insurance companies conversion to stockholder controlled companies?

An insurance company collected $31.0 million in premiums and disbursed $28 million in losses.Loss adjustment expenses amounted to $5.0 million.The firm is profitable

Insurance companies have resisted the investment in technology that banks and other financial service firms have pursued.

Which of the following insurance products protects a lender against a borrower's death prior to repayment of the debt?

Calculate the annual cash flows of a $500,000, 12-year fixed-payment annuity earning a guaranteed 6 percent per year if annual payments are to begin at the end of the current year.

As of 2015, the Federal Reserve oversees approximately one-third of U.S.insurance company assets.

Which of the following involves fixed premium payments and a benefit payout at the time of death that will depend on investment returns over the life of the policy?

Commercial banks sold over 25% of fixed-return annuities, an insurance product, in 2015.

Economies of scope represent the principal advantage of group life over ordinary life policies for insurance companies.

Why Are Financial Institutions Special

Financial Services: Depository Institutions

Financial Services: Finance Companies

Financial Services: Securities Brokerage and Investment Banking

Financial Services: Mutual Funds and Hedge Funds

Risks of Financial Institutions

Interest Rate Risk I

Interest Rate Risk II

Credit Risk: Individual Loan Risk

Credit Risk: Loan Portfolio and Concentration Risk

Liquidity Risk

Foreign Exchange Risk

Sovereign Risk

Market Risk

Off-Balance-Sheet Risk

Technology and Other Operational Risks

Fintech Risks

Liability and Liquidity Management

Deposit Insurance and Other Liability Guarantees

Capital Adequacy

Product and Geographic Expansion

Futures and Forwards

Options, Caps, Floors, and Collars

Swaps

Loan Sales

Securitization

Filters