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RMIN CH 5 Exam 2 Questions and Correct Answers (elaborations) with 100% Accurate , Verified , Latest fully Updated , 2024/2025 ,Already Passed , Graded A+, Complete solutions guarantee distinctions Rationales

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RMIN CH 5 Exam 2 Questions and Correct Answers (elaborations) with 100% Accurate , Verified , Latest fully Updated , 2024/2025 ,Already Passed , Graded A+, Complete solutions guarantee distinctions Rationales

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  • August 3, 2024
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  • 2024/2025
  • Exam (elaborations)
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RMIN CH 5 Exam 2 questions
C - ✔✔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.

D - ✔✔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.

D - ✔✔3) Why are some mutual insurers referred to as "assessment mutuals"?
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
100%
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.

B - ✔✔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.

B - ✔✔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.

, A - ✔✔7) Which of the following statements about Lloyd's of London is true?
A) Coverage is actually written by syndicates who belong to Lloyd'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.

A - ✔✔8) Temporary evidence of insurance until a policy is actually issued is provided
by a(n)
A) binder.
B) brokerage agreement.
C) pre-approval form.
D) endorsement.

A - ✔✔9) Which of the following statements about brokers is (are) true?
I. They legally represent the insured rather than the insurance company.
100%
II. They are prohibited from being licensed as agents.
A) I only
B) II only
C) both I and II
D) neither I nor II

A - ✔✔10) Neil needs insurance that is unavailable in the state where he lives. To
obtain insurance from a nonadmitted insurer, Neil should contact a
A) surplus lines broker.
B) nonadmitted agent.
C) general agency broker.
D) direct writer.

B - ✔✔11) All of the following statements about the general agency system used for
selling life insurance are true EXCEPT
A) A general agent is responsible for hiring, training, and motivating new agents.
B) A general agent is a salaried employee whose responsibilities are limited to selling
life insurance.

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