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Fundamentals Of Insurance (Ins 21): Chapters 1-3 Quizâ€‹

Question 1 of 3

Q1 . _____________ Insurance is intended to protect people who may be responsible for injury to someone else or damage to someone's property.

A Property Insurance

B Liability Insurance

C Life Insurance

D Health Insurance

Q2 . Primary Objectives of Insurance Regulation are

A Rate Regulation

B Solvency Surveillance

C Consumer protection

D All of the Above

Q3 . Some Federal government program provides coverage for loss exposures that private insurers have avoided largely because of the potential for catastrophic loss. An example such a program is,

A Worker compensation

B Unemployment insurance programs

C Automobile insurance plans

D The National flood insurance programs

Q4 . An insurance policy is a contract that states the rights and duties of

A The insured and insurer and agent.

B The insured and the insurer.

C The insured and the agent.

D The insured and other third parties.

Q5 . Benefits of Insurance Include:

A Satisfying Legal Requirement

B Reducing Social Burdens

C Reducing the insured’s financial uncertainty

D All of the above

Q6 . Insurance Rates should reflect the Insured's Loss Exposure (True/False)

A True

B False

Q7 . If the Rate is $15 and Having 10 Exposure units, calculate Premium.?

A $34

B $1.5

C $100

D $150

Q8 . Transferring the costs of losses to an insurer would be unnecessary, if there were no

A Exposures to loss

B Civil courts.

C Agents.

D Reinsurance.

Q9 . _____________ Covers Liability Loss Exposures arising from a business Organization's Premises and Operations, its products, or its completed work.

A Professional Liability Insurance

B Commercial General Liability Insurance

C Auto Liability Insurance

D None of the above

Q10 . The Process of making and implementing decisions to handle loss exposure is known as __________

A Loss Reduction Measures

B Loss Prevention Measures

C Risk Management

D None of the Above.

Q11 . Identify the below one is not related to State Government Insurance Programs?

A Workers compensation

B Unemployment insurance programs

C Automobile insurance plans

D Lloyd's of London

Q12 . Expansion of NAIC

A National Association of Insurance Company

B National Association of Insurance Commodity

C National Association of Insurance Commissioners

D None of the Above.

Q13 . Net Income Loss is called as_____

A Reduction in Revenue, an decrease in expenses

B Reduction in Revenue, an increase in expenses

C Reduction in Revenue, an decrease in savings

D Reduction in Revenue, an increase in savings

Q14 . Stock Insurers comes under

A Federal Government Insurance Programs

B State Government Insurance Programs

C Private Insurers

D None of the Above

Q15 . Unemployment insurance programs operated by

A Federal governments

B Local governments

C State governments

D Private insurers.

Q16 . A person who uses complex mathematical methods and technology to analyze loss data and other statistics and to develop systems for determining insurance rates. Who is it?

A Underwriter

B Regulator

C Actuary

D All of the Above.

Q17 . All of the following parties are likely to monitor an insurer's financial performance, EXCEPT:

A Regulators

B Agents

C Claimants

D Shareholders

Q18 . The process by which a mutual insurer, which is owned by its policy holders become stock company, which is then owned by its stockholders called,

A Mutual Insurer

B Demutualization

C Mutual insurer

D Reciprocal insurer

Q19 . Private insurers are reluctant to provide coverage for food and crop losses due to the

A Concentration of exposure

B Large number of exposure units

C Variety of exposure units

D Dispersion of exposure units

Q20 . Lloyds belongs to one of major groups called

A Subscriber

B Syndicates

C Inter insurance exchange

D Demutualization

Q21 . Disability Insurance is primarily income replacement insurance that Pays _____________

A Weekly Benefits

B Monthly Benefits

C Weekly Benefits or Monthly Benefits

D None of the Above

Q22 . Excess and surplus lines insurance is usually written by whom?

A Admitted insurers

B Non-Admitted insurers

C Licensed insurers

D None of the Above

Q23 . An insurer's income statement shows amounts for all of the following for a particular period, EXCEPT:

A Earned premiums

B Incurred losses

C Underwriting expenses

D Policyholders surplus

Q24 . Which Law refers to "Rates must be filed but do not have to be approved before use"

A Use and File Laws

B No File Laws

C Flex Rating Laws

D File and Use Laws

Q25 . Mid-State Painting Company owns vans, trucks, and cars that carry workers, supplies, and equipment to worksites. On November 1, Mammoth Insurance Company issued a business auto policy with a one-year period to Mid-State Painting Company and the premium was agreed to be paid at the end of each quarter. The premium for the policy is $24,000. What was the unearned premium for Mammoth Insurance as of March the next year?

A $15,500

B $24,000

C $20,000

D $18,000

Q26 . Which one of the following is part of written premiums?

A Investment income

B Policyholders surplus

C Unearned premiums

D Underwriting expenses

Q27 . The financial report for Hometown Insurer contains the following information: Earned premiums - $4,000,000 Written premiums - $5,000,000 Investment income - $1,000,000 Incurred Losses - $3,000,000 Incurred underwriting expense - $1,000,000 What is Hometown Insurer's investment income ratio?

A 10%

B 20%

C 25%

D 50%

Q28 . Term Insurance Provides Coverage for specified period,such as ten or twenty years,with cash values(True/False)

A True

B False

Q29 . Making a profit for the insurance company is a major objective for which one of the

A Underwriting department

B Finance department

C Marketing department

D Claims department

Q30 . Identify the Insurance type, that there main purpose for insurance formed.i.e, "To Earn profit for its individual investors ("Names") and its corporate investors.

A Stock insurer

B Mutual insurer

C Reciprocal insurer

D Lloyd's of London

Q31 . Personnel Loss Exposures is any condition or situation that presents the possibility of financial loss to ____________

A Family

B Business

C Individual

D Both a & c

Q32 . Insurers provide insurance for Potential Financial Consequences of Loss Exposures that have following Characters

A Loss Exposure is subject to accidental loss from the insured’s standpoint.

B Loss Exposure is economically infeasible to insure.

C Loss is subject to a loss that would simultaneously affect many other similar Loss Exposure.

D Both b & c

Q33 . ___________ Provides Life Insurance Protection and a savings Component.

A Term Insurance

B Whole Life Insurance

C Universal Life Insurance

D Disability Income Insurance

Q34 . Which is the below one provding most of the property & liability insurance in US?

A Private insurer

B Stock insurance companies

C Mutual insurance companies

D Reciprocal insurance exchange

Q35 . The financial report for Hometown Insurer contains the following information: Earned premiums - $4,000,000 Written premiums - $5,000,000 Investment income - $1,000,000 Incurred Losses - $3,000,000 Incurred underwriting expense - $1,000,000 What is Hometown Insurer's combined ratio?

A 75%

B 95%

C 105%

D 100%

Q36 . _____________ Insurance is intended to protect people who may be responsible for injury to someone else or damage to someone's property.

A Property Insurance

B Liability Insurance

C Life Insurance

D Health Insurance

Q37 . Primary Objectives of Insurance Regulation are

A Rate Regulation

B Solvency Surveillance

C Consumer protection

D All of the Above

Q38 . Some Federal government program provides coverage for loss exposures that private insurers have avoided largely because of the potential for catastrophic loss. An example such a program is,

A Worker compensation

B Unemployment insurance programs

C Automobile insurance plans

D The National flood insurance programs

Q39 . An insurance policy is a contract that states the rights and duties of

A The insured and insurer and agent.

B The insured and the insurer.

C The insured and the agent.

D The insured and other third parties.

Q40 . Benefits of Insurance Include:

A Satisfying Legal Requirement

B Reducing Social Burdens

C Reducing the insured’s financial uncertainty

D All of the above

Q41 . Insurance Rates should reflect the Insured's Loss Exposure (True/False)

A True

B False

Q42 . If the Rate is $15 and Having 10 Exposure units, calculate Premium.?

A $34

B $1.5

C $100

D $150

Q43 . Transferring the costs of losses to an insurer would be unnecessary, if there were no

A Exposures to loss

B Civil courts.

C Agents.

D Reinsurance.

Q44 . _____________ Covers Liability Loss Exposures arising from a business Organization's Premises and Operations, its products, or its completed work.

A Professional Liability Insurance

B Commercial General Liability Insurance

C Auto Liability Insurance

D None of the above

Q45 . The Process of making and implementing decisions to handle loss exposure is known as __________

A Loss Reduction Measures

B Loss Prevention Measures

C Risk Management

D None of the Above.

Q46 . Identify the below one is not related to State Government Insurance Programs?

A Workers compensation

B Unemployment insurance programs

C Automobile insurance plans

D Lloyd's of London

Q47 . Expansion of NAIC

A National Association of Insurance Company

B National Association of Insurance Commodity

C National Association of Insurance Commissioners

D None of the Above.

Q48 . Net Income Loss is called as_____

A Reduction in Revenue, an decrease in expenses

B Reduction in Revenue, an increase in expenses

C Reduction in Revenue, an decrease in savings

D Reduction in Revenue, an increase in savings

Q49 . Stock Insurers comes under

A Federal Government Insurance Programs

B State Government Insurance Programs

C Private Insurers

D None of the Above

Q50 . Unemployment insurance programs operated by

A Federal governments

B Local governments

C State governments

D Private insurers.

Q51 . A person who uses complex mathematical methods and technology to analyze loss data and other statistics and to develop systems for determining insurance rates. Who is it?

A Underwriter

B Regulator

C Actuary

D All of the Above.

Q52 . All of the following parties are likely to monitor an insurer's financial performance, EXCEPT:

A Regulators

B Agents

C Claimants

D Shareholders

Q53 . The process by which a mutual insurer, which is owned by its policy holders become stock company, which is then owned by its stockholders called,

A Mutual Insurer

B Demutualization

C Mutual insurer

D Reciprocal insurer

Q54 . Private insurers are reluctant to provide coverage for food and crop losses due to the

A Concentration of exposure

B Large number of exposure units

C Variety of exposure units

D Dispersion of exposure units

Q55 . Lloyds belongs to one of major groups called

A Subscriber

B Syndicates

C Inter insurance exchange

D Demutualization

Q56 . Disability Insurance is primarily income replacement insurance that Pays _____________

A Weekly Benefits

B Monthly Benefits

C Weekly Benefits or Monthly Benefits

D None of the Above

Q57 . Excess and surplus lines insurance is usually written by whom?

A Admitted insurers

B Non-Admitted insurers

C Licensed insurers

D None of the Above

Q58 . An insurer's income statement shows amounts for all of the following for a particular period, EXCEPT:

A Earned premiums

B Incurred losses

C Underwriting expenses

D Policyholders surplus

Q59 . Which Law refers to "Rates must be filed but do not have to be approved before use"

A Use and File Laws

B No File Laws

C Flex Rating Laws

D File and Use Laws

Q60 . Mid-State Painting Company owns vans, trucks, and cars that carry workers, supplies, and equipment to worksites. On November 1, Mammoth Insurance Company issued a business auto policy with a one-year period to Mid-State Painting Company and the premium was agreed to be paid at the end of each quarter. The premium for the policy is $24,000. What was the unearned premium for Mammoth Insurance as of March the next year?

A $15,500

B $24,000

C $20,000

D $18,000

Q61 . Which one of the following is part of written premiums?

A Investment income

B Policyholders surplus

C Unearned premiums

D Underwriting expenses

Q62 . The financial report for Hometown Insurer contains the following information: Earned premiums - $4,000,000 Written premiums - $5,000,000 Investment income - $1,000,000 Incurred Losses - $3,000,000 Incurred underwriting expense - $1,000,000 What is Hometown Insurer's investment income ratio?

A 10%

B 20%

C 25%

D 50%

Q63 . Term Insurance Provides Coverage for specified period,such as ten or twenty years,with cash values(True/False)

A True

B False

Q64 . Making a profit for the insurance company is a major objective for which one of the

A Underwriting department

B Finance department

C Marketing department

D Claims department

Q65 . Identify the Insurance type, that there main purpose for insurance formed.i.e, "To Earn profit for its individual investors ("Names") and its corporate investors.

A Stock insurer

B Mutual insurer

C Reciprocal insurer

D Lloyd's of London

Q66 . Personnel Loss Exposures is any condition or situation that presents the possibility of financial loss to ____________

A Family

B Business

C Individual

D Both a & c

Q67 . Insurers provide insurance for Potential Financial Consequences of Loss Exposures that have following Characters

A Loss Exposure is subject to accidental loss from the insured’s standpoint.

B Loss Exposure is economically infeasible to insure.

C Loss is subject to a loss that would simultaneously affect many other similar Loss Exposure.

D Both b & c

Q68 . ___________ Provides Life Insurance Protection and a savings Component.

A Term Insurance

B Whole Life Insurance

C Universal Life Insurance

D Disability Income Insurance

Q69 . Which is the below one provding most of the property & liability insurance in US?

A Private insurer

B Stock insurance companies

C Mutual insurance companies

D Reciprocal insurance exchange

Q70 . The financial report for Hometown Insurer contains the following information: Earned premiums - $4,000,000 Written premiums - $5,000,000 Investment income - $1,000,000 Incurred Losses - $3,000,000 Incurred underwriting expense - $1,000,000 What is Hometown Insurer's combined ratio?

A 75%

B 95%

C 105%

D 100%

Q71 . _____________ Insurance is intended to protect people who may be responsible for injury to someone else or damage to someone's property.

A Property Insurance

B Liability Insurance

C Life Insurance

D Health Insurance

Q72 . Primary Objectives of Insurance Regulation are

A Rate Regulation

B Solvency Surveillance

C Consumer protection

D All of the Above

Q73 . Some Federal government program provides coverage for loss exposures that private insurers have avoided largely because of the potential for catastrophic loss. An example such a program is,

A Worker compensation

B Unemployment insurance programs

C Automobile insurance plans

D The National flood insurance programs

Q74 . An insurance policy is a contract that states the rights and duties of

A The insured and insurer and agent.

B The insured and the insurer.

C The insured and the agent.

D The insured and other third parties.

Q75 . Benefits of Insurance Include:

A Satisfying Legal Requirement

B Reducing Social Burdens

C Reducing the insured’s financial uncertainty

D All of the above

Q76 . Insurance Rates should reflect the Insured's Loss Exposure (True/False)

A True

B False

Q77 . If the Rate is $15 and Having 10 Exposure units, calculate Premium.?

A $34

B $1.5

C $100

D $150

Q78 . Transferring the costs of losses to an insurer would be unnecessary, if there were no

A Exposures to loss

B Civil courts.

C Agents.

D Reinsurance.

Q79 . _____________ Covers Liability Loss Exposures arising from a business Organization's Premises and Operations, its products, or its completed work.

A Professional Liability Insurance

B Commercial General Liability Insurance

C Auto Liability Insurance

D None of the above

Q80 . The Process of making and implementing decisions to handle loss exposure is known as __________

A Loss Reduction Measures

B Loss Prevention Measures

C Risk Management

D None of the Above.

Q81 . Identify the below one is not related to State Government Insurance Programs?

A Workers compensation

B Unemployment insurance programs

C Automobile insurance plans

D Lloyd's of London

Q82 . Expansion of NAIC

A National Association of Insurance Company

B National Association of Insurance Commodity

C National Association of Insurance Commissioners

D None of the Above.

Q83 . Net Income Loss is called as_____

A Reduction in Revenue, an decrease in expenses

B Reduction in Revenue, an increase in expenses

C Reduction in Revenue, an decrease in savings

D Reduction in Revenue, an increase in savings

Q84 . Stock Insurers comes under

A Federal Government Insurance Programs

B State Government Insurance Programs

C Private Insurers

D None of the Above

Q85 . Unemployment insurance programs operated by

A Federal governments

B Local governments

C State governments

D Private insurers.

Q86 . A person who uses complex mathematical methods and technology to analyze loss data and other statistics and to develop systems for determining insurance rates. Who is it?

A Underwriter

B Regulator

C Actuary

D All of the Above.

Q87 . All of the following parties are likely to monitor an insurer's financial performance, EXCEPT:

A Regulators

B Agents

C Claimants

D Shareholders

Q88 . The process by which a mutual insurer, which is owned by its policy holders become stock company, which is then owned by its stockholders called,

A Mutual Insurer

B Demutualization

C Mutual insurer

D Reciprocal insurer

Q89 . Private insurers are reluctant to provide coverage for food and crop losses due to the

A Concentration of exposure

B Large number of exposure units

C Variety of exposure units

D Dispersion of exposure units

Q90 . Lloyds belongs to one of major groups called

A Subscriber

B Syndicates

C Inter insurance exchange

D Demutualization

Q91 . Disability Insurance is primarily income replacement insurance that Pays _____________

A Weekly Benefits

B Monthly Benefits

C Weekly Benefits or Monthly Benefits

D None of the Above

Q92 . Excess and surplus lines insurance is usually written by whom?

A Admitted insurers

B Non-Admitted insurers

C Licensed insurers

D None of the Above

Q93 . An insurer's income statement shows amounts for all of the following for a particular period, EXCEPT:

A Earned premiums

B Incurred losses

C Underwriting expenses

D Policyholders surplus

Q94 . Which Law refers to "Rates must be filed but do not have to be approved before use"

A Use and File Laws

B No File Laws

C Flex Rating Laws

D File and Use Laws

Q95 . Mid-State Painting Company owns vans, trucks, and cars that carry workers, supplies, and equipment to worksites. On November 1, Mammoth Insurance Company issued a business auto policy with a one-year period to Mid-State Painting Company and the premium was agreed to be paid at the end of each quarter. The premium for the policy is $24,000. What was the unearned premium for Mammoth Insurance as of March the next year?

A $15,500

B $24,000

C $20,000

D $18,000

Q96 . Which one of the following is part of written premiums?

A Investment income

B Policyholders surplus

C Unearned premiums

D Underwriting expenses

Q97 . The financial report for Hometown Insurer contains the following information: Earned premiums - $4,000,000 Written premiums - $5,000,000 Investment income - $1,000,000 Incurred Losses - $3,000,000 Incurred underwriting expense - $1,000,000 What is Hometown Insurer's investment income ratio?

A 10%

B 20%

C 25%

D 50%

Q98 . Term Insurance Provides Coverage for specified period,such as ten or twenty years,with cash values(True/False)

A True

B False

Q99 . Making a profit for the insurance company is a major objective for which one of the

A Underwriting department

B Finance department

C Marketing department

D Claims department

Q100 . Identify the Insurance type, that there main purpose for insurance formed.i.e, "To Earn profit for its individual investors ("Names") and its corporate investors.

A Stock insurer

B Mutual insurer

C Reciprocal insurer

D Lloyd's of London

Q101 . Personnel Loss Exposures is any condition or situation that presents the possibility of financial loss to ____________

A Family

B Business

C Individual

D Both a & c

Q102 . Insurers provide insurance for Potential Financial Consequences of Loss Exposures that have following Characters

A Loss Exposure is subject to accidental loss from the insured’s standpoint.

B Loss Exposure is economically infeasible to insure.

C Loss is subject to a loss that would simultaneously affect many other similar Loss Exposure.

D Both b & c

Q103 . ___________ Provides Life Insurance Protection and a savings Component.

A Term Insurance

B Whole Life Insurance

C Universal Life Insurance

D Disability Income Insurance

Q104 . Which is the below one provding most of the property & liability insurance in US?

A Private insurer

B Stock insurance companies

C Mutual insurance companies

D Reciprocal insurance exchange

Q105 . The financial report for Hometown Insurer contains the following information: Earned premiums - $4,000,000 Written premiums - $5,000,000 Investment income - $1,000,000 Incurred Losses - $3,000,000 Incurred underwriting expense - $1,000,000 What is Hometown Insurer's combined ratio?

A 75%

B 95%

C 105%

D 100%

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