Question 1

A perpetual mutual:

Accepted Answer

A) requires a very large initial premium 
B) is owned by stockholders who supply the capital 
C) distribute all investment earnings to its policyholders in the form of a dividend 
D) requires only assessments from each policy holder after the end of each year to cover losses 
A) requires a very large initial premium 
B) is owned by stockholders who supply the capital 
C) distribute all investment earnings to its policyholders in the form of a dividend 
D) requires only assessments from each policy holder after the end of each year to cover losses A

Question 2

Stock insurers:

Accepted Answer

A) are unincorporated 
B) only sell property and liability insurance 
C) cannot sell automobile insurance 
D) are organized as profit making ventures 
A) are unincorporated 
B) only sell property and liability insurance 
C) cannot sell automobile insurance 
D) are organized as profit making ventures D

Question 3

Assessment mutuals are another name for factory mutuals.

Accepted Answer

A) True 
 B)False  False

Question 4

Mutual insurance companies legally are nonprofit organizations.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following is not a type of mutual insurance organization?

Accepted Answer

A) assessment 
B) advanced premium 
C) perpetual 
D) reciprocal 
A) assessment 
B) advanced premium 
C) perpetual 
D) reciprocal

Question 6

Describe the changes that were brought about by the Gramm-Leach-Bliley Act,and,its overall impact on financial services today.

Accepted Answer

Also known as the Financial Services Ref

Question 7

All the following statements are true concerning mutual insurance companies except:

Accepted Answer

A) they may pay dividends 
B) they are owned by their policy holders 
C) they are legally organized as perpetual partnerships 
D) they are nonprofit 
A) they may pay dividends 
B) they are owned by their policy holders 
C) they are legally organized as perpetual partnerships 
D) they are nonprofit

Question 8

Buying insurance from a mutual may not always be desirable because:

Accepted Answer

A) the mutual is trying to make a profit for the stockholders 
B) you may be paying for other insureds' losses 
C) premiums may be greater than that of a stock company if the mutual is improperly managed 
D) the officers of the company are not responsible to the policy holders 
A) the mutual is trying to make a profit for the stockholders 
B) you may be paying for other insureds' losses 
C) premiums may be greater than that of a stock company if the mutual is improperly managed 
D) the officers of the company are not responsible to the policy holders

Question 9

The term "demutualization" refers to:

Accepted Answer

A) the process of a stock insurer converting its organizational structure to mutual 
B) the board of directors' action in declaring dividends for the policy owners 
C) the process of a mutual insurer converting its organizational structure to the stock form 
D) the process of liquidating an insolvent mutual insurance company 
A) the process of a stock insurer converting its organizational structure to mutual 
B) the board of directors' action in declaring dividends for the policy owners 
C) the process of a mutual insurer converting its organizational structure to the stock form 
D) the process of liquidating an insolvent mutual insurance company

Question 10

What are the basic differences between a stock and a mutual insurance company?

Accepted Answer

The main difference between a stock and

Question 11

Dividends from mutual insurers are not subject to federal income tax.

Accepted Answer

A) True 
 B)False

Question 12

What is demutualization? What are some reasons companies want to demutualize?

Accepted Answer

Demutualization is the process of changi

Question 13

Dividends from mutual insurers are a part of the contract,and minimum dividends are guaranteed.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following statements is false?

Accepted Answer

A) factory mutuals insure only highly protected risks 
B) a stock insurance company is a profit making venture in both life and property insurance 
C) dividends are paid to stockholders of stock companies 
D) in stock companies, non insured stockholders bear none of the risk of loss 
A) factory mutuals insure only highly protected risks 
B) a stock insurance company is a profit making venture in both life and property insurance 
C) dividends are paid to stockholders of stock companies 
D) in stock companies, non insured stockholders bear none of the risk of loss

Question 15

The United States' insurance industry is comprised of how many property/casualty insurers?

Accepted Answer

A) 500 
B) 800 
C) 900 
D) over 2,000 
A) 500 
B) 800 
C) 900 
D) over 2,000

Question 16

Both stock and mutual insurance companies are incorporated

Accepted Answer

A) True 
 B)False

Question 17

Assessment mutuals:

Accepted Answer

A) primarily provide fire and windstorm coverage for small towns and farmers 
B) do a lot more business than advance premium mutuals 
C) do about the same amount of business as advance premium mutuals 
D) are shareholder owned 
A) primarily provide fire and windstorm coverage for small towns and farmers 
B) do a lot more business than advance premium mutuals 
C) do about the same amount of business as advance premium mutuals 
D) are shareholder owned

Question 18

Savings bank life insurance:

Accepted Answer

A) is sold only in a few Eastern states in the U.S. 
B) is a form of group credit life and disability coverage 
C) can only be purchased in amounts of $5,000 or less 
D) is the same as industrial life insurance 
A) is sold only in a few Eastern states in the U.S. 
B) is a form of group credit life and disability coverage 
C) can only be purchased in amounts of $5,000 or less 
D) is the same as industrial life insurance

Question 19

All the following are true about fraternal insurers except:

Accepted Answer

A) they market their product to social organizations 
B) they are nonprofit and have tax advantages 
C) they specialize in life insurance 
D) they typically sell coverage through commercial banks 
A) they market their product to social organizations 
B) they are nonprofit and have tax advantages 
C) they specialize in life insurance 
D) they typically sell coverage through commercial banks

Question 20

How do a reciprocal exchange and a mutual insurance company differ?

Accepted Answer

A reciprocal exchange is similar to a mu

Exam 4: Financial Services Companies

A perpetual mutual:

Stock insurers:

Assessment mutuals are another name for factory mutuals.

Mutual insurance companies legally are nonprofit organizations.

Which of the following is not a type of mutual insurance organization?

Describe the changes that were brought about by the Gramm-Leach-Bliley Act,and,its overall impact on financial services today.

All the following statements are true concerning mutual insurance companies except:

Buying insurance from a mutual may not always be desirable because:

The term "demutualization" refers to:

What are the basic differences between a stock and a mutual insurance company?

Dividends from mutual insurers are not subject to federal income tax.

What is demutualization? What are some reasons companies want to demutualize?

Dividends from mutual insurers are a part of the contract,and minimum dividends are guaranteed.

Which of the following statements is false?

The United States' insurance industry is comprised of how many property/casualty insurers?

Both stock and mutual insurance companies are incorporated

Assessment mutuals:

Savings bank life insurance:

All the following are true about fraternal insurers except:

How do a reciprocal exchange and a mutual insurance company differ?

Fundamentals and Terminology

Defining the Insurable Event

Risk Management

Insurance Occupations

the Insurance Market: the Economic Problem

Insurance Regulation

Insurance Contracts

Basic Property and Liability Insurance Contracts

Homeowners Insurance

the Personal Auto Policy

Professional Financial Planning

Life Insurance Policies

Standard Life Insurance Contract Provisions And Options

Annuities

Medical Expense and Disability Insurance

Advanced Topics in Risk Management

Commercial Property Insurance

Commercial Liability Insurance

Bonding,Crime Insurance and Reinsurance

Employee Benefits

Social Security

Unemployment and Workers Compensation Insurance

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