The stated amount or percent of liquid assets that an insurer must have on hand that will satisfy future obligations to its policyholders is called
reserves
Which of these describe a participating life insurance policy?
Policyowners are entitled to receive dividends
A nonprofit incorporated society that does not have capital stock and operates for the sole benefit of its members is known as
a fraternal benefit society
What year was the McCarran-Ferguson Act enacted?
1945
At what point must a life insurance applicant be informed of their rights that fall under the Fair Credit Reporting Act?
Upon completion of the application
What is the name of the law that requires insurers to disclose information gathering practices and where the information was obtained?
Fair Credit Reporting Act
An insurance applicant MUST be informed of an investigation regarding his/her reputation and character according to the
Fair Credit Reporting Act
A group-owned insurance company that is formed to assume and spread the liability risks of its members is known as a
risk retention group
Which of the following requires insurers to disclose when an applicant's consumer or credit history is being investigated
1970 - Fair Credit Reporting Act
What type of reinsurance contract involves two companies automatically sharing their risk exposure?
Treaty
Who elects the governing body of a mutual insurance company?
policyholders
Which of these is considered a statement that is assured to be true in every respect?
Warrenty
Taking receipt of premiums and holding them for the insurance company is an example of
Fiduciary responsibility
Insurance policies are offered on a "take it or leave it" basis, which make them
Contracts of Adhesion
When must insurable interest be present in order for a life insurance policy to be valid?
When the application is made
Life and health insurance policies are
Unilateral contracts
In an insurance contract, the insurer is the only party who makes a legally enforceable promise. What kind of contract is this?
Unilateral
What is the consideration given by an insurer in the Consideration clause of a life policy?
Promise to pay a death benefit to a named beneficiary
If a contract of adhesion contains complicated language, to whom would the interpretation be in favor of?
Insured
Who makes the legally enforceable promises in a unilateral insurance policy?
...
The part of a life insurance policy guaranteed to be true is called a
warranty
Stranger Originated Life Insurance (STOLI) has been found to be in violation of which of the following contractual elements?
Legal Purpose (Insurable Interest)
E and F are business partners. Each takes out a $500,000 life insurance policy on the other, naming himself as primary beneficiary. E and F eventually terminate their business, and four months later E dies. Although E was married with three children at th
F