51 notecards = 13 pages (4 cards per page)
Reasons for regulation of insurance include which of the following?
The right of the states to regulate the business of insurance was first established by
The basis for current state regulation of insurance is
All of the following statements about the methods of regulating insurance are true EXCEPT
Which of the following statements about the licensing of insurance companies is (are) true?
An insurance company incorporated in another state has been licensed to operate in your state. In your state, the insurer would be considered a(n)
An insurance company chartered in another country has been licensed to operate in your state. In your state, the insurer would be considered a(n)
Which of the following is considered a nonadmitted asset for an insurer?
The policyholders' surplus of an insurer is defined as the difference between its
Which of the following statements about the use of risk-based capital requirements is (are) true?
Which of the following statements about the regulation of insurance company investments is (are) true?
Which of the following statements about the regulation of life insurance companies is (are) true?
Which of the following statements about state insurance guaranty funds is (are) true?
Under one type of rate regulation, insurers do not have to register their rates with state regulatory authorities. However, insurers may be required to furnish rate schedules and supporting data to state officials. A fundamental assumption underlying this type of rating law is that market forces will determine the price and availability of insurance, rather than discretionary acts of regulators. This type of rate regulation is called
Under what type of rate regulation are insurers required to obtain approval of rates before using them if the rate change exceeds a specified predetermined range?
By misrepresenting the true facts, Gretchen was able to convince someone to replace an existing life insurance policy with another company and to purchase a new policy from the company that Gretchen represents. Gretchen has engaged in an illegal sales practice called
Which of the following statements about premium taxes is (are) true?
Which of the following is an advantage of federal regulation of insurance over state regulation of insurance?
Which of the following is an advantage of state regulation of insurance over federal regulation of insurance?
A shortcoming of state regulation of insurance according to Congressional committees and the General Accounting Office is that state regulation
The major reasons for insurer insolvency include which of the following?
Which of the following is a principal method of ensuring the solvency of insurers?
The number of title insurance companies operating in State Z is relatively low. Recently, the largest of these companies (50 percent market share) acquired the second largest company (30 percent market share). Immediately after the acquisition, the insurer raised premiums by 75 percent. This scenario demonstrates which of the following rationales for the regulation of insurance?
In which of the following did the Court decide that insurance was interstate commerce when conducted across state lines, and therefore was subject to federal regulation?
A life insurance company based in Canada was licensed to operate in Massachusetts. When operating in Massachusetts, the Canadian insurer would be considered a(n)
XYZ Mutual Insurance Company has total assets of $10 million. The policyholders' surplus is $2 million. What are XYZ Mutual's total liabilities?
Mutual Property Insurance Company has a surplus of $2 million. According to a conservative rule, how much in new net premiums can Mutual Property Insurance Company safely write?
Fly-By-Night Insurance Company had much larger losses than forecast. The company did not charge adequate premiums nor did the company purchase reinsurance. If Fly-By-Night becomes insolvent, which of the following will help pay the unpaid claims of the insurer?
Grace is a life insurance agent. She is attempting to sell a large life insurance policy, but the prospective purchaser is having second thoughts. To persuade the prospective purchaser, Grace said, "I will earn a $1,000 commission if you buy this policy. I'll give you $500 of my commission if you buy the policy." In most states, what illegal sales practice will Grace be guilty of if she splits her commission with the purchaser?
State X's premium tax rate is 2 percent. State Y's premium tax rate is 3 percent. State X insurers are required to pay the 3 percent rate on business written in State Y. State X requires insurers from State Y to pay a 3 percent premium tax on business written in State X, even though the premium tax rate is only 2 percent in State X. This practice is known as a
ABC Insurance Company would like to purchase a bank. For many years, ABC was not permitted under federal law to enter into banking operations. Which of the following legislative acts eliminated the prohibition that prevented banks, insurers, and investment firms from entering into one another's markets?
Under one type of rating law, insurers are free to change rates and to use modified rates immediately. However, the new rate must be filed with regulators within a specified period, such as 60 days after the modified rate is employed. This type of rating law is called
The regulation of insurers in areas that affect consumers, which include claims handling, underwriting, complaints, advertising, sales practices, and other trade practices is called
The National Association of Insurance Commissioners (NAIC) administers an "early warning system" to help ensure insurance company solvency. This system uses data provided in the annual statement to identify companies that may pose a solvency risk. This early warning system is called
Which of the following statements is (are) true regarding the quality of insurance regulation?
Which of the following statements concerning the proposed optional federal charter for life insurers is (are) true?
Which of the following is a method used to help ensure the solvency of insurers?
A score derived from an individual's credit history and other factors that is used by many auto and homeowners insurers for underwriting and rating purposes is called a(n)
All of the following are arguments in favor of using an applicant's credit record in personal lines underwriting EXCEPT
All of the following statements about insurance regulation are true EXCEPT
A systemic risk is a risk that
The purpose of the Financial Analysis Solvency Tracking (FAST) system employed by the NAIC is to
To correct abuses in the financial services industry, Congress passed an Act in 2010 that included numerous provisions to reform the financial services industry. This Act was the
One provision of the Dodd-Frank Act was creation of the Financial Stability Oversight Council. This council is charged with identifying nonbank financial companies that could increase the risk of collapse of the entire financial system. This risk is called
The Dodd-Frank Act created a federal body with some limited regulatory authority. For example, the organization can represent the federal government in international negotiations regarding insurance and it can preempt state law where it conflicts with negotiated international agreements. This body is called the
Which of the following is authority given to the Federal Insurance Office created by the Dodd-Frank Act?
One method of ensuring the solvency of insurers is a periodic review, every three to five years, of insurers that operate on a multistate basis. This review is coordinated by the NAIC. This review is called a(n)
The major argument in favor of an optional federal charter for insurers is that
The risk-based capital requirements for life insurers are based on a formula that considers four types of risk. One risk reflects whether the insurer will have enough surplus if claims are higher than expected. This risk is called
The risk-based capital requirements for life insurers are based on a formula that considers four types of risk. One risk reflects a range of uncertainties that life insurers face including such things as bad management decisions and guaranty fund assessments. This risk is called
Liability items on an insurer’s balance sheet that reflect obligations that must be met in the future are called