HSM546 Week 5 Practice Quiz Transcript Copy
HSM546 Week 5 Practice Quiz Transcript
NOTE: An asterisk (*) denotes the correct answer.
1. Which of the following statements about stock insurers is true?
a. They issue assessable policies.
b. They are not permitted to write property and liability insurance.
*c. Stockholders bear any losses and share in any profits.
d. They are owned by their policyowners who participate in profits but not in losses.
2. Which of the following statements about mutual insurers is true?
a. They are legally organized as partnerships.
b. They have a board of directors which is selected by state insurance departments.
c. They are owned by their stockholders.
*d. They may pay policy dividends or give rate reductions in advance.
3. Why are some mutual insurers referred to as “assessment mutuals”?
a. They charge low premiums because the loss exposures of their insureds are thoroughly assessed before a policy is written.
b. They are noted for being very thorough in their assessment of investment opportunities.
c. They are assessed for state premium taxes only if they make a profit.
*d. They can assess policyowners if premiums are insufficient to pay losses and expenses.
4. Which of the following statements about factory mutuals is true?
a. They write insurance primarily for very small factories.
*b. They place great emphasis on loss prevention.
c. They issue policies providing limited coverage and coinsurance is almost always used.
d. They charge initial premiums which are inadequate to pay expected claims, and then assess policyowners for additional funds as needed.
NOTE: An asterisk (*) denotes the correct answer.
1. Which of the following statements about stock insurers is true?
a. They issue assessable policies.
b. They are not permitted to write property and liability insurance.
*c. Stockholders bear any losses and share in any profits.
d. They are owned by their policyowners who participate in profits but not in losses.
2. Which of the following statements about mutual insurers is true?
a. They are legally organized as partnerships.
b. They have a board of directors which is selected by state insurance departments.
c. They are owned by their stockholders.
*d. They may pay policy dividends or give rate reductions in advance.
3. Why are some mutual insurers referred to as “assessment mutuals”?
a. They charge low premiums because the loss exposures of their insureds are thoroughly assessed before a policy is written.
b. They are noted for being very thorough in their assessment of investment opportunities.
c. They are assessed for state premium taxes only if they make a profit.
*d. They can assess policyowners if premiums are insufficient to pay losses and expenses.
4. Which of the following statements about factory mutuals is true?
a. They write insurance primarily for very small factories.
*b. They place great emphasis on loss prevention.
c. They issue policies providing limited coverage and coinsurance is almost always used.
d. They charge initial premiums which are inadequate to pay expected claims, and then assess policyowners for additional funds as needed.