Chapter 5 Types of Insurers and Marketing Systems

Chapter 5 Types of Insurers and Marketing Systems -...

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Chapter 5  Types of Insurers and Marketing Systems 1) Which of the following statements about stock insurers is true? A) They issue assessable policies. B) They are not permitted to write property and liability insurance. C) Stockholders bear any losses and share in any profits. D) They are owned by their policyowners. Answer: C Question Status: Revised 2) Which of the following statements about mutual insurers is true? A) They are legally organized as partnerships. B) They have a board of directors which is selected by state insurance departments. C) They are owned by their stockholders. D) They may pay dividends to their policyowners. Answer: D Question Status: Revised 3) Why are some mutual insurers referred to as ʺ assessment mutuals ʺ ? A) They charge low premiums because the loss exposures of their insureds are thoroughly assessed before a policy is written. B) They are noted for being very thorough in their assessment of investment opportunities. C) They are assessed for state premium taxes only if they make a profit. D) They can assess policyowners if premiums are insufficient to pay losses and expenses. Answer: D Question Status: Previous Edition 4) The corporate structure of mutual insurers is changing rapidly. All of the following are current trends EXCEPT A) Demutualization of some insurers. B) Sharp increase in the number of mutual insurance companies. C) Increase in company mergers. D) Formation of mutual holding companies. Answer: B Question Status: New Chapter 5 Types of Insurers and Marketing Systems 51 5) All of the following statements about fraternal insurers are true EXCEPT A) They are a form of mutual insurer. B) They specialize in writing property and liability insurance. C) They enjoy tax advantages because of their nonprofit or charitable status. D) They market their coverage to members of a social organization or religious group. Answer: B Question Status: Previous Edition 6) Which of the following statements about a reciprocal exchange is (are) true? I. It usually specializes in health insurance. II. It is an unincorporated mutual insurance company. A) I only B) II only C) both I and II D) neither I nor II Answer: B Question Status: Revised
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7) Which of the following statements about Lloyd ʹ s of London is true? A) Coverage is actually written by syndicates who belong to Lloyd ʹ s of London. B) Its underwriters specialize in writing life and health insurance. C) It operates as an admitted insurer throughout the United States. D) It allows underwriters to write coverage without meeting stringent financial requirements. Answer: A Question Status: Previous Edition 8) Temporary evidence of insurance until a policy is actually issued is provided by a(n) A) binder. B) brokerage agreement.
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This note was uploaded on 06/15/2011 for the course RIM 3331 taught by Professor Papp during the Spring '11 term at Troy.

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Chapter 5 Types of Insurers and Marketing Systems -...

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