Chapter Exam - Basic Principles Flashcards
Who elects the governing body of a mutual insurance company?
Policy-holders
Which of these describe a participating insurance policy?
Policyowners are entitled to receive dividends
Which of the following requires insurers to disclose when an applicant’s consumer or credit history is being investigated:
1970 - 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
When a policy pays dividends to its policyholders, it is said to be
participating
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
What year was the McCarran-Ferguson Act enacted?
1945
Dividends payable to a policyowner are
declared by the insurance company
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
What type of reinsurance contract involves two companies automatically sharing their risk exposure?
Treaty
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
