Business Quiz: Insurance Company Organization And Regulation

10 Questions | Total Attempts: 774

SettingsSettingsSettings
Insurance Quizzes & Trivia

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.


Questions and Answers
  • 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. 
    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

  • 7. 
    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

  • 8. 
    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

  • 9. 
    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.

  • 10. 
    Who is responsible for licensing insurance agents?
    • A. 

      Lloyd's Associations

    • B. 

      State insurance department

    • C. 

      Interstate Commerce Commission

    • D. 

      Insurance Services Office

Back to Top Back to top