Basic Principles Flashcards
What year was the McCarran-Ferguson Act enacted?
1945
The stated amount or percent of liquid assets that an insurer must have on hand that will satisfy future obligations to its policyholders is called:
Reserves
A group-owned insurance company that is formed to assume and spread the liability risks of its members is known as a:
Risk retention group
Who elects the governing body of a mutual insurance company?
Policyholders
What is the name of the law that requires insurers to disclose information gathering practices and where the information was obtained?
Fair Credit Reporting Act
An insurance applicant MUST be informed of an investigation regarding his/her reputation and character according to the:
Fair Credit Reporting Act
A nonprofit incorporated society that does not have capital stock and operates for the sole benefit of its members is known as:
A fraternal benefit society
Which of these describe a participating life insurance policy?
Policyholders are entitled to receive dividends
At what point must a life insurance applicant be informed of their rights that fall under the Fair Credit Reporting Act?
Upon the completion of the application
Which of the following requires insurers to disclose when an applicant’s consumer or credit history is being investigated:
1970-Fair Credit Reporting Act
What type of reinsurance contract involves two companies automatically sharing their risk exposure?
Treaty
