Michigan Property & Casualty UPDATED Exam Questions and CORRECT Answers
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Course
Michigan Property & Casualty
Institution
Michigan Property & Casualty
Michigan Property & Casualty UPDATED
Exam Questions and CORRECT Answers
FIO - CORRECT Answer- (Federal Insurance Office) Monitors insurance industry and
identifies issues and gaps in the state regulation of insurers. It also monitors access to
affordable insurance by underserved communities a...
Michigan Property & Casualty UPDATED
Exam Questions and CORRECT Answers
FIO - CORRECT Answer- (Federal Insurance Office) Monitors insurance industry and
identifies issues and gaps in the state regulation of insurers. It also monitors access to
affordable insurance by underserved communities and consumers.
Insurance Regulation at State Level - CORRECT Answer- Insurance industry is regulated
primarily at the state level. Legislature writes and passes laws, judicial branch interprets
them.
Surplus and Excess Insurance - CORRECT Answer- Insurance available when coverage
cannot be obtained from admitted insurers. Cannot be solely utilized to receive lower cost
coverage than would be available from an admitted carrier.
Private vs Government Insurers - CORRECT Answer- Most insurance is written through
private insurers, however there are instances where government provides an alternative,
usually when there is a lot of risk involved and private insurers have no means to insure.
(Gulf Coast)
Residual Markets - CORRECT Answer- A private coverage source of last resort for
businesses and individuals who have been rejected by voluntary market insurers.
Insurance Agents/Producers - CORRECT Answer- Licensed individuals representing an
insurance company when transacting insurance.
Reinsurance Companies - CORRECT Answer- Insurance company that assumes all or a
portion of a risk from a primary or ceding insurance company.
Treaty Agreements - CORRECT Answer- Reinsurance agreement that covers all risks
contained in the subject line(s) of business automatically.
Insurers - CORRECT Answer- Manufacture and sell insurance coverage by way of insurance
policies or contracts.
, Facultative Agreements - CORRECT Answer- Reinsurance agreements that allow ceding and
reinsurance companies the opportunity to negotiate coverage for individual risks.
Financial Rating Services - CORRECT Answer- Independent financial rating services
evaluate and rate the financial stability of insurance companies. Assign ratings to show
financial strength/weakness.
Insurance Agency - CORRECT Answer- Independent organizations that recruit, contract
with, and support sales agents and producers.
Self Insurer - CORRECT Answer- Assume the financial risk of one's self. generally on an
option for large companies.
Insurance Regulation at the Federal Level - CORRECT Answer- Federal government cannot
regulate insurance in areas over which states have authority. Government is last resort.
The Insured - CORRECT Answer- Person or entity that buys insurance for protection from
loss of life, health, property or liability.
Domestic Insurer
Foreign Insurer
Alien Insurer - CORRECT Answer- Domestic-Insurer organized under laws of this state,
whether or not admitted to do business in that state.
Foreign-Not authorized to do business in this state, but in other states in the U.S
Alien-Outside of the U.S
Risk Sharing Plan - CORRECT Answer- Insurers agree to apportion among themselves those
risks that are unable to obtain insurance through normal channels.
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