Mutual property insurance company has a surplus of 2

This preview shows page 5 - 8 out of 9 pages.

28) Mutual Property Insurance Company has a surplus of $2 million. According to a conservative rule
Image of page 5

Subscribe to view the full document.

of thumb, how much new net premiums can Mutual Property Insurance Company safely write? A) $4 million B) $8 million C) $10 million D) $20 million Answer: A Question Status: Previous Edition 29) Fly-By-Night Insurance Company had much larger losses than forecast. The company did not charge adequate premiums nor did the company purchase reinsurance. If Fly-By-Night becomes insolvent, which of the following will help pay the unpaid claims of the insurer? Question Status: Revised 30) Grace is a life insurance agent. She is attempting to sell a large life insurance policy, but the prospective purchaser is having second thoughts. To persuade the prospective purchaser, Grace said, ʺ I will earn a $1,000 commission if you buy this policy. I ʹ ll give you $500 of my commission if you buy the policy. ʺ In most states, what illegal sales practice will Grace be guilty of if she splits her commission with the purchaser? Question Status: Previous Edition Chapter 8 Government Regulation of Insurance 93 31) State X ʹ s premium tax rate is 2 percent. State Y ʹ s premium tax rate is 3 percent. State X insurers are required to pay the 3 percent rate on business written in State Y. State X requires insurers from State Y to pay a 3 percent premium tax on business written in State X, even though the premium tax rate is only 2 percent in State X. This practice is known as a Question Status: Revised 32) ABC Insurance Company would like to purchase a bank. For many years, ABC was not permitted under federal law to enter into banking operations. Which of the following legislative acts eliminated the prohibition that prevented banks, insurers, and investment firms from entering into one another ʹ s markets? A) The McCarran-Ferguson Act B) The Tax Reform Act C) The Consolidated Omnibus Budget Reconciliation Act D) The Financial Modernization Act (Gramm-Leach-Bliley Act) Answer: D Question Status: Previous Edition 33) Under one type of rating law, insurers are free to change rates and to use modified rates
Image of page 6
immediately. However, the new rate must be filed with regulators within a specified period, such as 60 days after the modified rate is employed. This type of rating law is called Question Status: New
Image of page 7

Subscribe to view the full document.

Image of page 8
  • Fall '12
  • Pantel
  • insurance company, Question Status, National Association of Insurance Commissioners

{[ snackBarMessage ]}

Get FREE access by uploading your study materials

Upload your study materials now and get free access to over 25 million documents.

Upload now for FREE access Or pay now for instant access
Christopher Reinemann
"Before using Course Hero my grade was at 78%. By the end of the semester my grade was at 90%. I could not have done it without all the class material I found."
— Christopher R., University of Rhode Island '15, Course Hero Intern

Ask a question for free

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern