Business Quiz: Insurance Company Organization And Regulation
There are several types of insurance organizations and arrangements that provide insurance coverage. Not all of them are corporations (or companies) that are in business to make a profit, but most of them are. The various categories of insurers represent the different ways they raise the money necessary to begin a business and enroll their prospects for insurance. Although you need to understand the nature and structure of for-profit insurance companies, you should also know that there are other markets and providers of insurance, including non-incorporated private organizations and the federal and state governments.
- 1.A nonexclusive agent:
- A.
Represents a single insurance company.
- B.
Works for a direct writer.
- C.
Is an independent businessperson.
- D.
Does not collect commissions.
- 2.Solicitors may not:
- A.
Issue or countersign policies.
- B.
Sell insurance.
- C.
Collect premiums.
- D.
Sign an application.
- 3.At DEF Insurance Company, agents are employees of the company who are paid a salary plus commissions. This is an example of what type of insurance marketing system?
- A.
Captive
- B.
Independent
- C.
Direct writer
- D.
Direct response
- 4.Which insurance company department is responsible for accepting and rejecting applications based on company standards?
- A.
Underwriting
- B.
Loss Control
- C.
Claims
- D.
Agency
- 5.Which insurance company department is responsible for paying insureds' covered losses?
- A.
Audit
- B.
Claims
- C.
Underwriting
- D.
Reinsurance
- 6.Who is responsible for licensing insurance agents?
- A.
Lloyd's Associations
- B.
State insurance department
- C.
Interstate Commerce Commission
- D.
Insurance Services Office
- 7.Agent Blondell is offering a free television to every applicant who agrees to buy insurance through his agency. In most states, this is an illegal practice known as:
- A.
Rebating
- B.
Twisting
- C.
Misrepresentation
- D.
Failure of fiduciary responsibility
- 8.Which of the following is not one of the duties of an agent?
- A.
Making appropriate coverage recommendations to prospective customers
- B.
Writing the provisions of a customer's policy
- C.
Helping prospective customers complete the application
- D.
Assuring that customers understand the coverage they are purchasing
- 9.The Excel Insurance Company is incorporated in the state of Tennessee. It is also authorized to do business in Georgia. In Georgia, Excel is known as what type of company?
- A.
Alien
- B.
Foreign
- C.
Domestic
- D.
Non-admitted
- 10.Can states require insurance companies to use certain forms or rates in connection with certain types of insurance?
- A.
No, that would be a violation of the principle of open competition.
- B.
No, they can only require that forms and rates be subject to prior approval.
- C.
No, insurers can always begin using forms and rates as soon as they are properly filed with the state.
- D.
Yes, some states have mandatory forms or rates for certain coverages.
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