Texas Life and Health Insurance Exam

Texas Life and Health Insurance Exam Questions and Answers Guide (Guaranteed Succes) Latest

Question : The Fair Credit Reporting Act is a Federal law

requiring an individual to be informed if that individual is being investigated by an inspection company.An insurance applicant MUST be informed of an investigation regarding his/her reputation and character

according to the:

CORRECT ANSWER : Fair Credit Reporting Act

Question : 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.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:

CORRECT ANSWER : Reserves

Question : Dividends payable to a policyowner are:

CORRECT ANSWER : Declared by the insurance company

Question : What is the name of the law that requires insurers

to disclose information gathering practices and where the information was obtained?

CORRECT ANSW ER: Fair Credit Reporting Act

The Fair Credit Reporting Act is a Federal law requiring an individual to be informed if that individual is being investigated by an inspection company.

Question : Who elects the governing body of a mutual

insurance company?

CORRECT ANSWER : Policyholders

Question : A group-owned insurance company that is formed

to assume and spread the liability risks of its members is

known as a:

CORRECT ANSWER : Risk retention group

Question : What type of reinsurance contract involves two

companies automatically sharing their risk exposure?

CORRECT ANSWER : Treaty

Under treaty reinsurance, each party automatically accepts specific percentages of the insurer's business.

Question : At what point must a life insurance applicant be

informed of their rights that fall under the Fair Credit Reporting Act?

CORRECT ANSWER : Upon completion of the application

Question : When a policy pays dividends to its policyholders,

it is said to be:

CORRECT ANSWER : participating

Question : A nonprofit incorporated society that does not have

capital stock and operates for the sole benefit of its members

is known as:

CORRECT ANSWER : fraternal benefit society

Question : An insurable risk requires

CORRECT ANSWER : that the chance of loss be calculable

Question : A business becoming incorporated is an example

of risk

CORRECT ANSWER : Transfer

Question : Which of these statements regarding insurance is

FALSE?

• One way insurers deal with catastrophic loss is through

reinsurance

• As the number of insured units increases, the number of

losses decreases

• Speculative risk cannot be insured
• Pure risk can be insured

CORRECT ANSWER : B. As the number of insured units

increases, the number of losses decreases is FALSE

Question : The law of large numbers enables an insurer to