Florida life Insurance Exam Set

Florida life Insurance Exam Set

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Florida life Insurance Exam Set

• Which of the following requires insurers to disclose when an applicants consumer or credit

history is being investigated

Answer: 1970 - Fair Credit Reporting Act

• Who elects the governing body of a mutual insurance company

Answer: Policyholders

• Which of these describe a participating insurance policy

Answer: Policyowners are entitled to receive dividends

• 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

Answer: reserves

• An insurance applicant MUST be informed of an investigation regarding his/her reputation

and character according to the

Answer: Fair Credit Reporting Act

• Dividends payable to a policy owner are

Answer: Declared by the insurance company

• A group-owned insurance company that is formed to assume and spread the liability risks of

its members is known as a

Answer: risk retention group

• When a policy pays dividends to its policyholders, it is said to be

Answer: participating

• At what point must a life insurance applicant be informed of their rights that fall under the

Fair Credit Reporting Act

Answer: Upon completion of the application

• What type of reinsurance contract involves two companies automatically sharing their risk

exposure?

Answer: Treaty reinsurance

• What year was the McCarran-Ferguson Act enacted

Answer: 1945

• What is the name of the law that requires insurers to disclose information gathering

practices and where the information was obtained

Answer: Fair Credit Re- porting Act 2 / 3

• A non profit incorporated society that does not have capital stock and operates for the sole

benefit of its members is known as:

Answer: fraternal benefit society

• Which of these is considered a statement that is assured to be true in every respect

Answer: warranty

• Which of the following consist of an offer acceptance and consideration

Answer: -contract

• A life insurance arrangement which circumvents insurable interest statues is called

Answer: Investor-Originated Life Insurance

• Who makes the legally enforceable promises in a unilateral insurance policy?

Answer: insurance company

• What is the consideration given by an insurer in the consideration clause of a life policy

Answer: Promise to pay a death benefit to a named beneficiary

• Taking receipt of premiums and holding them for the insurance company is an example of

Answer: Fiduciary responsibility

• Life and health insurance policies are

Answer: Unilateral contracts.

(Life and health insurance policies are considered unilateral contracts because one party makes a promise, and the other party can only accept by performance.)

• A policy of adhesion can only be modified by whom?

Answer: The insurance company.

(A policy of adhesion is best described as a policy which only the insurance company can modify.)

• If a contract of adhesion contains complicated language, to whom would the interpretation

be in favor of?

Answer: insured

• The Consideration clause of an insurance contract includes

Answer: the schedule and amount of premium payments

• Which of these is not considered to be an element of an insurance contract

Answer: negotiating

• Stranger Originated Life Insurance (STOLI) has been found to be in violation of which of

the following contractual elements?

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