Financial services industry - ANSWER An industry in which financial institutions help people, businesses, and governments with their asset accumulation, asset management, and asset protection needs
Financial institutions - ANSWER A business that owns primarily financial assets, such as stock and...
LOMA 281 Module 1
Lesson 2 Correct
Questions &
ANSWERS(2024 LATEST
UPDATE)
Financial services industry - ANSWER An industry in which financial institutions help people, businesses,
and governments with their asset accumulation, asset management, and asset protection needs
Financial institutions - ANSWER A business that owns primarily financial assets, such as stock and bonds,
rather than fixed assets, such as equipment and raw materials
Depository institution - ANSWER A financial institution that specializes in accepting deposits and making
loans
Securities firm - ANSWER A financial institution that issues securities and engages primarily in investing
and trading securities
Mutual fund companies - ANSWER A financial institution that pools money from many, often thousands,
of investors to build diversified portfolios of investment securities.
, Finance companies - ANSWER A financial institution that specializes in making short- and medium-term
loans to businesses and people
Insurance company - ANSWER A company that accepts risk and makes a promise to pay a policy benefit
if the covered loss does occur
Convergence - ANSWER The movement toward a single financial institution being able to serve a
customer's banking, insurance, and securities needs
Consolidation - ANSWER The combining of financial services institutions primarily through mergers and
acquisitions. Consolidation results in fewer traditional financial services institutions
Merger - ANSWER Two companies are combined into one company. One company survives as a legal
entity and the other company ceases to exist
Acquisition - ANSWER One company purchases a controlling interest in another company. After the
acquisition, both companies continue to exist as legal entities. Acquisitions can include the purchase of
an entire company or just one line of business
Solvency regulation - ANSWER Focuses on making sure that insurance companies remain solvent. Known
as prudential regulation in many countries.
Market conduct laws - ANSWER Help ensure that customers receive fair and accurate information before
they buy insurance and equitable treatment during the buying process. Such laws typically regulate the
form and content of insurance advertisements to make sure they don't mislead consumers as well as
various aspects of the sales process.
Who primarily regulates insurance in the United States? - ANSWER Individual state governments
McCarran-Ferguson Act - ANSWER A federal law that allows state governments to regulate the business
of insurance as long as Congress considers the state legislation adequate. Congress can intervene if it
considers state regulation to be inadequate.
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