Loma 281 Module1
Risk is the possibility of an unexpected result.
Speculative risk can result in a gain, a loss, or no change;
pure risk involves either a loss or no loss.
Four risk management techniques:
Avoid the risk：避免风险（比如当心亏钱而不投资股票）
Control the risk ：控制风险（比如安装烟雾探测器来防止或减少火灾的损失）
Accept the risk：接受风险（不通过其他方式管理风险：避免，控制或转移风险）
Transfer the risk：转移风险（比如通过购买保险将风险的经济责任转移给保险公司）
Two basic types of life insurance product:
Life insurance: The insurer promises to pay a death benefit when a named person dies. 寿险
Annuity: In return for receiving a premium, an insurer promises to make periodic payments. 年金
Parties involved in an insurance transaction:
Applicant: The person or entity that applies for an insurance policy. 申请人
Policyowner: The person or entity that owns the issued policy. 保单所有者
Insured: The person whose life or health the policy insures. 被保人
Beneficiary: The person named to receive the policy benefit. 受益人
Third-Party Policy: A policy purchased by one person or entity on the life of another person. 第三方保单
The characteristics of an insurable risk:
The risk must be a pure risk：必须是纯风险，不能是投资风险
The loss must occur by chance：损失一定是偶然发送
The loss must be definite in time and amount：损失必须在时间和金额上明确
The loss must be significant：损失必须很大
The loss rate must be predictable：损失率必须是可预测的
The loss cannot be catastrophic to the insurer：损失对保险公司来说不会是灾难性的
contract of indemnity: An insurance policy under which the amount of the policy benefit payable for a covered loss is based on the actual amount of financial loss that results from the covered event, as determined at the time of the event.
valued contract: An insurance policy that specifies the amount of the policy benefit that will be payable when a covered loss occurs, regardless of the actual amount of the loss that was incurred.
face amount: The amount of the policy benefit that is payable if the insured dies while the policy is in force. Also known as face value. 跟定额合同相关
Insurers minimize catastrophic losses by purchasing reinsurance—insurance for insurance companies.
Reinsurance allows the insurer—the direct writer or ceding company—to transfer (cede) risk above its retention limit to a reinsurer or assuming company. The reinsurer can accept all of the transferred risk, or it can cede some of the risk to a second reinsurer, known as a retrocessionaire.
Underwriters evaluate proposed risks and assign them to risk classes.
Underwriters evaluate applications for physical hazards and moral hazards.
Underwriters try to avoid antiselection.
medical risk factor: A physical or psychological characteristic that may increase the likelihood of loss.
moral hazard: A characteristic that exists when the reputation, financial position, or criminal record of an applicant or a proposed insured indicates that the person may act dishonestly in the insurance transaction.
antiselection: The tendency of individuals who believe they have a greater-than-average likelihood of loss to seek insurance protection to a greater extent than do other individuals.
Individual life insurers usually identify at least four risk classes for proposed insureds.
Standard: Insurers classify proposed insureds whose likelihood of loss is not significantly greater than average as standard risks. The insurance company charges its standard premium rates.
Preferred: Insurers classify proposed insureds whose likelihood of loss is significantly lower than average as preferred risks. The insurance company charges these insureds preferred premium rates, which are lower than standard premium rates.
Substandard: Insurers classify proposed insureds whose likelihood of loss is significantly greater than average as substandard risks. The insurance company charges them substandard premium rates, which are higher than standard premium rates.
Declined: Some proposed insureds present a risk that is too great for the insurer to cover. This might include people with a poor health history or those who engage in exceptionally risky activities, such as sky diving or mountain climbing.
interest is present: Laws in most states require insurable interest to be present at policy issue to prevent people from buying insurance to wager on other people s lives.
1.Risk is the possibility of an unexpected result. Risks can be speculative risks or pure risks.(Speculative/Pure) risk is an insurable risk because there is(a/no) possibility of gain.
2.The following statements describe individuals who are using various risk management techniques. From the answer choices below, select the response that correctly describes an individual who is transferring risk.
- Lana installed a smoke detector in her new home to reduce the likelihood that it would be damaged or destroyed by a fire.
- Josh does not own stock because he is afraid of losing money in the stock market.
- Carol, who recently retired, purchased an annuity to provide her with retirement income for the rest of her life.
- Amit, a small business owner, has set aside money to pay for his employees’ medical expenses.
3.Barry applied for and was issued an insurance policy covering the life of his wife, Ina. Barry named his daughter, Gail, as the individual who will receive the policy benefit should Ina die while the policy is in force. With regard to basic insurance terminology in this situation, it is most likely correct to say that
- the policy Barry applied for is a third-party policy
- Barry is the beneficiary of this policy
- Gail is the insured for this policy
- Ina is the policyowner of this policy
4.A risk, or potential loss, must have certain characteristics to be considered insurable. For example, to be insurable, a loss must
- not occur by chance
- be catastrophic to the insurer
- be significant
- have a rate of loss that is unpredictable
5.Carly Pavin, an underwriter for the Keen Insurance Company, has gathered the following information about Van Gregg, a proposed insured:
- Fact A: Mr. Gregg is overweight and has high blood pressure【medical risk factor】
- Fact B: Mr. Gregg was convicted of tax evasion five years ago 【moral hazard】
From the answer choices below, select the response that correctly indicates whether Ms. Pavin would correctly classify Facts A and B as moral hazards or medical risk factors.
Keen保险公司的保险人Carly Pavin收集了关于Van Gregg的以下信息，Van Gregg是一名拟议的被保险人：
6.In assessing the degree of risk represented by a proposed insured, an underwriter must consider the tendency of individuals who have a greater-than-average likelihood of loss to seek insurance protection to a greater extent than do other individuals. This tendency is known, by definition, as
- the law of large numbers
7.The Nimble Life Insurance Company places proposed insureds into one of four risk classes: preferred, standard, substandard, and declined. An underwriter for Nimble determined that Hai Zhang,a proposed insured, presented a likelihood of loss that was not significantly greater than average. This information indicates that Nimble placed Mr. Zhang in the risk class known as the
- preferred risk class
- standard risk class
- substandard risk class
- declined risk class
Types of Financial Institutions:
Depository institutions accept deposits and make loans.
Finance companies make short- and medium-term loans.
Securities firms buy and sell stocks, bonds, and other investments on behalf of investors. Mutual fund companies maintain a diversified portfolio by using investor’s funds to buy and sell a variety of securities.
Insurance companies issue products that cover personal risk, property damage risk, and liability risk.
Deregulation and other factors have contributed to the removal of barriers that historically prevented different financial institutions from competing with each other. This evolution of the insurance industry is characterized by
People and businesses purchase insurance products to cover three types of risk:
- Personal risk: Risks arising from the possibility of death, illness, injury, inability to work, or outliving one’s savings
- Property damage risk: Risks occurring from damage to, destruction of, or the disappearance of real property such as a home, an automobile, or personal belongings
- Liability risk: Risks occurring from acts or omissions that result in harm to others or their property
Life and health insurers protect against financial losses from death, disability, illness, accident, and outliving one’s savings.
Life and Health Products:
- Life insurance
- Medical expense insurance
- Disability insurance
Property/casualty insurers insure against losses to your property and from your unintentionally harming others.
- Automobile insurance
- Homeowners insurance
- Liability insurance
Typically, insurance companies are organized as stock insurance companies, mutual insurance companies, or fraternal benefit societies.
- stock insurer 股票保险公司
- Can issue shares of stock 发行股票
- Owned by stockholders, who have voting rights in the company 由在公司拥有投票权的股东所有
- Stockholders may receive shares of operating profits known as stock dividends 股东可以获得股票分红
- mutual insurer 共同保险公司
- Owned by policyowners 保单持有人所有
- Policyowners have membership rights (voting rights in the company) 保单持有人拥有会员权（公司投票权）
- Policyowners may periodically receive an amount of money known as a policy dividend 保单持有人可能会定期收到保单红利
- fraternal benefit societies 兄弟福利协会
- Owned by members of a fraternal lodge system 由兄弟会的成员拥有的
- Provides social and insurance benefits only to fraternal members and their families 只向兄弟成员及其家庭提供社会和保险福利
- Legally required to have a representative form of government 法律上要求有一个代议制的政府
Two Goals of Insurance Regulation
Solvency Regulation 偿付能力监管
- Solvency regulation is known as prudential regulation in many countries.
Market Conduct Regulation 市场行为监管
Federal laws pertaining to insurance industry: McCarran-Ferguson Act and Dodd-Frank Act, which established the Federal Insurance Office (FIO).
州政府：In the United States, insurance is regulated mainly by state insurance departments. States oversee insurers’
Market conduct practices 市场行为实践
Financial condition 财务状况
Policy forms 保单表格
联邦政府：The federal government regulates
Sales of variable life insurance and annuities 可变人寿保险和年金的销售
- Variable life insurance and variable annuities are considered to be investment products and so are regulated by the U.S. Securities and Exchange Commission(SEC). The owner, not the insurer, assumes most, if not all, of the investment risk for a variable product. Individuals selling variable insurance products must obtain both a state insurance license and a Financial Industry Regulatory Authority(FINRA) license to sell investment securities.
Consumer protections 消费者保护
Consumer privacy 消费者隐私
Income taxes 所得税
联邦保险办公室：FIO with authority to monitor the insurance industry, identify areas with inadequate state regulation, and handle international insurance issues.
全国保险专员协会：National Association of Insurance Commissioners (NAIC) helps standardize regulations among the states.
1.The Purslane Company is a type of financial institution that specializes in the purchase and sale of certificates, such as shares of stock, which represent an ownership interest, or bonds, which represent a debt owed. This information indicates that Purslane is the type of financial institution known as
- a depository institution
- a securities firm
- an insurance company
- a finance company
2.The Steady Insurance Company operates in a competitive climate in which a single financial services institution often sells a wide range of banking, insurance, and investment products and services. Such a competitive climate is best described by the term known as
Steady Insurance Company在竞争激烈的环境中运营，一家金融服务机构通常销售广泛的银行、保险和投资产品和服务。这种竞争性的气候最好用以下术语来描述：
3.All insurance companies are corporations. Characteristics of corporations include that they (are/are not) distinct from their owners and that they(do/do not) extend beyond the deaths of their owners.
4.The Yarrow Insurance Company is organized as a stock insurer. Therefore, one characteristic of Yarrow is that
- it operates through a lodge system
- it is owned by its policyowners
- its stockholders have voting rights in Yarrow
- its policyowners may receive shares of its operating profits in the form of stock dividends
5.One primary focus of insurance regulation is to ensure that insurance companies conduct their businesses fairly. This type of insurance regulation is known, by definition, as
market conduct regulation
6.The following statements are about the regulation of insurance companies in the United States. Select the answer choice containing the correct statement.
- Insurance companies in the United States are primarily regulated by the federal government.
- The U.S. McCarran-Ferguson Act created the Federal Insurance OfCE(FlO) with authority to monitor the insurance industry.
- If an insurance company operating within a state is unable to pay its policy benefits, the National Association of Insurance Commissioners (NAIC) provides funds to cover a specified portion of the company’s benefit payments.
- To ensure compliance with solvency legislation, state regulators conduct formal investigations of an insurer’s financial condition at least every three to five years.
An insurance policy is a legally enforceable contract between a policyowner who applies for and owns the policy and the insurer that issues the policy.
Contracts can be divided into types depending on their characteristics.
Bilateral contract: Both parties make legally enforceable promises.
Unilateral contract: Only one party’s promise is legally enforceable.
Commutative contract: The parties to the contract exchange items or services that are relatively equal in value.
Aleatory contract: One party provides something of value to another in exchange for a conditional promise.
Bargaining contract: Both parties, as equals, set the terms and conditions of the contract.
Contract of adhesion: One party prepares the contract for the other party to accept or reject as a whole, without any bargaining.
Informal contract: Enforceable because the parties to the contract met the requirements concerning the substance of the agreement.
Formal contract: Enforceable because the parties to the contract met requirements concerning the form of the contract itself.
the characteristics of an insurance contract:
- Aleatory contract
- Contract of adhesion
- Informal contract
- Unilateral contract
Valid Contract: A contract that satisfies all the legal requirements and is enforceable by law.
Void Contract: A contract that does not meet one or more of the legal requirements to create a legally enforceable contract.
Voidable Contract: A contract in which a party has the right to reject her obligations under the contract.
Remember that the requirements for a valid contract are
- Mutual assent: The parties reach a meeting of the minds about the terms of a contract when 相互同意
- One party makes an offer and the other party accepts that offer
- All parties express intent to be bound by the terms of the contract
- Legally adequate consideration: The parties must exchange consideration; each must give a promise or something of value to the other party. 法律上适当报价
- Applicant’s Consideration: Completed insurance application and the initial premium payment
- Insurer’s Consideration: Promise to pay policy benefits if the conditions stated in the policy occur
- Lawful purpose is satisfied by the presence of insurable interest in the life of the insured 合法的目的
- Shown if the insured’s death creates a significant loss
- Generally needed by the policyowner and the policy beneficiary; may be assumed because of bonds of affection or financial dependence
- Insurable interest must exist only at the time of policy issue.
- Contractual capacity 契约能力
- Contractual Capacity for Insurance Companies
- Contractual Capacity for Individuals
Insurable interest is the interest that an insurance policyowner or beneficiary has in the risk that is insured. A policyowner or beneficiary has an insurable interest if he is likely to suffer a genuine loss or detriment if the event insured against occurs.
Insurable Interest Relationships: The bonds of affection and financial dependence between certain family members are assumed by law to create an insurable interest between an insured and a policyowner or beneficiary.
Insurable interest is assumed for the insured’s spouse, child, parent, grandparent, grandchild, and sibling
Insurable Interest - Step Relative: When a policyowner or beneficiary is a step relative (stepfather, stepdaughter, etc.), distant relative, business partner, or friend, the bonds of affection and financial dependence may not be so clear.
Contractual Capacity for Insurance Companies:
An insurance company acquires the contractual capacity to issue an insurance policy by being licensed or authorized to do business by the proper regulatory authority. A company that is not licensed or authorized does not have the legal capacity to make an insurance contract.
Contractual Capacity for Individuals:
The law generally presumes that individuals who apply for insurance have the contractual capacity to enter into a contract. However, a lack of full contractual capacity is assumed when those individuals
- Are minors
- If a minor is issued an insurance policy, the policy is voidable by the minor, which means that the minor can later decide to disaffirm the policy, and the insurer will have to return the premiums the minor paid for the policy.
- Lack mental capacity
- People who lack mental capacity (for example, declared insane or mentally incompetent by a court of law) or whose mental capacity is impaired (for example, intoxicated or mentally ill) typically do not have full contractual capacity.
- A person without mental capacity cannot enter into a valid insurance contract. Thus, any such contract would be void. A person with impaired mental capacity is like a minor in that an impaired person who later regains competency may be able to avoid the insurance contract and receive a return of premiums.
1.Because only the insurer makes a legally enforceable promise in a typical life insurance contract, the contract is an example of a (unilateral/bilateral) contract. Because the policyowner exchanges something of value-the premium-for the insurer’s conditional promise to pay benefits if the insured dies while the policy is in force, a life insurance contract is an example of (a commutative/an aleatory) contract.
2.Lila Tabak is the policyowner-insured of a life insurance contract with the EIM Insurance Company. The following statement(s) can correctly be made about this insurance contract:
A. Ms. Tabak’s contract with Elm is an example of a formal, rather than an informal, contract.
B. If any provision in this contract is ambiguous, the courts most likely will interpret that provision against Elm.
- Both A and B
- A only
- B only
- Neither A nor B
3.The following information describes two contracts:
- Contract A-one of the parties has the legal right to reject her obligations under the contract without incurring legal liability [voidable]
- Contract B-does not meet one of the legal requirements to create a legally enforceable contract [void]
4.When Pam Store applied for a life insurance policy from the Birch Insurance Company, she submitted legally adequate consideration for the policy. This consideration most likely consisted of
- a completed insurance application, the initial premium payment, and a promise to pay all renewal premiums
- a completed insurance application and the initial premium payment only
- the initial premium payment and a promise to pay all renewal premiums only
- the completed insurance application only
5.The bonds of affection and financial dependence between certain family members are assumed by law to create an insurable interest between an insured and a policyowner or beneficiary. All of the following individuals generally would be presumed to automatically satisfy the insurable interest requirement EXCEPT for an insured’s
6.The following statements are about contractual capacity in the formation of insurance contracts. Select the answer choice containing the correct statement.
- An insurer acquires its legal capacity to issue an insurance contract by being licensed or authorized to do business by the proper regulatory authority.
- If an insurer issues a policy to a person who is younger than the permissible age to purchase insurance, the insurer can avoid the policy.
- An insurance contract entered into by a person when the person’s mental competence is impaired, but who has not been declared insane or mentally incompetent by a court, is a valid contract.
- An insurance contract entered into by a person after a court has declared the person to be insane or mentally incompetent is a voidable contract.
In an insurance transaction, the policyowner pays premiums to the insurer in exchange for the insurer’s promise to pay benefits when they become due.
• For the customer, the value of the exchange is the opportunity to transfer risk to the insurer and gain peace of mind.
• For the insurer, the value of the exchange is the opportunity to collect premiums and grow the company’s business.
精算师Actuaries specialize in calculating the financial impact of risk and uncertainty. They rely on the mathematics of insurance to determine how much insurers should charge customers so that the company can
- Pay all future benefits 支付所有未来福利
- Cover operating expenses 支付运营费用
- Make a reasonable profit 赚取合理利润
Actuaries determine premium rates per unit of coverage. These rates must be
Adequate: The company will have enough money to pay policy benefits. 足够的
Equitable: Each policyowner pays a premium that reflects the degree of risk he presents to the insurer 公平的
Developing Premium Rates【制定保险费率】
To determine adequate and equitable premium rates, actuaries take into account
the cost of benefits 福利成本
- The cost of benefits equals all of the insurer’s potential benefit payments multiplied by the expected probability that each benefit will be payable. 福利成本等于保险人的所有潜在福利付款乘以每项福利应支付的预期概率。
- Mortality rate, cost of benefits, and premium rate all move in the same direction. As the mortality rate rises, so do the cost of benefits and the premium rate. 死亡率、福利成本和保险费率都朝着同一个方向发展。随着死亡率的上升，福利成本和保险费率也在上升。
- Death benefits payable when the insured dies. Death benefits are based onmortality rates. 被保险人死亡时应支付的身故保险金。死亡抚恤金基于死亡率。
- Surrender benefits payable when a policyowner surrenders a policy for its cash surrender value. Surrender benefits and costs of lapses are based on **lapse rates. **当保单持有人为其现金退保价值而放弃保单时，应支付的退保福利。退保福利和失效成本（没有现金价值）基于失效率。
investment earnings 投资收益
- The principal is the sum of money originally invested, loaned, or borrowed. 本金是最初投资、借出或借来的钱的总和。
- Simple interest is interest on the original principal only. 单利是对原始本金的利息。
- Interest on both the principal and the accrued interest is called compound interest. 本金和应计利息的利息叫做复利。
operating expenses 营业费用
- Taxes, licenses, and fees 税收、执照和费用
- Salaries and commissions 工资和佣金
- Costs associated with developing new products 与开发新产品相关的成本
- Costs associated with operating and maintaining the home office, regional offices, and/or sales offices 与运营和维护总部、区域办事处和/或销售办事处相关的成本
The lapse rate represents the annual percentage of policies that don’t remain in force until the end of a given policy year because the policyowner stops paying premiums.
The mortality rate reflects how many people in a group will die at each age.
Simple interest is interest on the original principal only.
Example: Luther Odom loaned Peggy Sims $1,000 for one year at an annual interest rate of 10 percent. A 10 percent interest rate on a loan indicates that the borrower must pay the lender the amount originally borrowed, plus an additional 10 percent of that amount.
Analysis: At the end of one year, Peggy owed Luther $1,100: the $1,000 Luther loaned Peggy originally plus $100 interest ($1,000 x 0.10 = $100).
Interest on both the principal and the accrued interest is called compound interest.
Example: Marcia Woodson loaned Bernard Carter $1,000 at an annual interest rate of 10 percent. Bernard did not repay any of the principal or interest on the loan for two years.
At the end of the first year, Bernard owed Marcia $1,100, calculated as
$1,000 principal + ($1,000 principal x 0.10) = $1,100
At the end of the second year, Bernard owed Marcia $110 in interest, calculated as
$1,100 principal and accrued interest x 0.10 = $110
Thus, at the end of the second year, Bernard owed Marcia a total of $1,210, calculated as
$1,100 + $110 = $1,210
例如：Marcia Woodson以10%的年利率借给Bernard Carter 1000美元。Bernard在两年内没有偿还任何贷款本金或利息。
1.To develop adequate and equitable premium rates, actuaries take into account the following factors:
A. Cost of benefits
B. Investment earnings
C. Operating expenses
- A,B,C, and D
- A,B, and C only
- A,C, and D only
- B and D only
2.Kay Vale is a 32-year-old proposed insured whose likelihood of loss is significantly greater thin average but is still insurable. Ms. Vale applied for $150,000 of life insurance coverage with the Red Insurance Company. Red would charge the following premium rates for a 32-year-old woman based on her risk class:
$1.25 per $1,000 of coverage for preferred risks
$2.00 per $1,000 of coverage for standard risks
$3.25 per $1,000 of coverage for substandard risks
This information indicates that Ms. Vale’s annual premium amount will be
Kay Vale是一名32岁的拟投保人，其损失可能性明显高于平均水平，但仍可投保。Vale女士向Red Insurance公司申请了150000美元的人寿保险。Red将根据32岁妇女的风险等级收取以下保费：
3.Actuaries at the Retreat Insurance Company are developing a new term life insurance product. They project that 5 of each 1,000 insureds will die before the end of the product’s first year. If the actuaries had projected that 7 out of each 1000 insureds would die before the end of the product’s first year, then the projected cost of benefits for this product would be (lower / higher).thereby allowing their coverage to terminate. For this product’s second year, the (lapse / surrender) rate is They also project that 120 of each 1,000 insureds will not pay the second year’s premium expected to be 12%.
4.The following statements can correctly be made about the relationship between mortality rates and premium rates for a block of Life insurance policies:
A. An insurer applies different premium rates to insureds who fit into the same block of policies
B. Generally, the lower the mortality rate, the lower the cost of benefits and premium rate.
- Both A and B
- A only
- B only
- Neither A nor B
5.Ron Houk loaned 510,00 to his lister, Fona Wymn. Mr. Houk charged his sister a 5% interest rate, compounded annually. At the end of two years, Ms. Wymn wanted to pay back the entire loan plus the total interest accrued on the loan. This information indicates that Ms. Wynn should pay Mr. Houk a total of
6.The Misty Insurance Company noted the following results on a block of life insurance policies, compared to what Misty had assumed when Misty originally priced the block of policies:
- Result A-Operating expenses were higher
- Result B-Investment earnings were higher
- Result C-Mortality experience was lower
Of these results, those that would tend to increase Misty’s profits include
all of these results
Result A and Result B only
Result B and Result C only
Result C only
1.The Chetola Insurance Company noted the following results on a block of insurance policies
Result A: Investment earnings were higher than Chetola had assumed when it priced the block of policies
Result B: Mortality experience was lower than Chetola had assumed when it priced the block of policies.
Result C: Operating expenses were lower than Chetola had assumed when it priced the block of policies.
Chetola’s profits likely increased because of
- all of these results
- Result A and Result C only
- Result B and Result C only
- Result C only
2.Life insurance companies usually identify at least four risk classes for proposed insureds: standard risks, preferred risks, substandard risks, and declined risks. A proposed insured for life insurance who presents a significantly lower-than-average likelihood of loss typically is classified as a
- preferred risk and charged a lower-than-standard premium rate
- standard risk and charged a standard premium rate
- substandard risk and charged a higher-than-standard premium rate
- declined risk and denied the requested life insurance coverage
3.Nicole Dior is the policyowner-insured of a $250,000 term life insurance policy. Because Ms. Dior’s policy specifies the amount of the benefit payable should she die while the coverage is in force, her life insurance policy is a type of contract known as a
- voidable contract
- void contract
- contract of indemnity
- valued contract
4.Risks can be classified as either speculative risks or pure risks. The type of risk that can be insured is a
pure risk, which is a risk that involves either a loss, a gain, or no change
pure risk, which is a risk that involves either a loss or no loss
speculative risk, which is a risk that involves either a loss, a gain, or no change
speculative risk, which is a risk that involves either a loss or no loss
5.Nancy Xiong is an underwriter for the Limelight Insurance Company. As an underwriter, Ms. Xiong primarily is responsible for
setting the premium rates for Limelight’s insurance products
evaluating claims submitted by Limelight’s customers
evaluating proposed risks for Limelight’s insurance products
submitting financial statements to Limelight’s regulators
6.When Patrick Bergeron applied for a life insurance policy from the McAvoy Insurance Company, he submitted legally adequate consideration for the policy. This consideration most likely consisted of
a completed insurance application, the initial premium payment, and a promise to pay all renewal premiums
the initial premium payment and a promise to pay all renewal premiums only
a completed insurance application and the initial premium payment only
a completed insurance application only
7.In the United States, insurance is primarily regulated by the
- federal government
- Securities and Exchange Commission(SEC)
- Financial Industry Regulatory Authority(FINRA)
- state governments
8.Mortality rates affect premium rates and the cost of benefits for a block of life insurance policies. With respect to the difference between the mortality rates of men and women of the same age, mortality tables show that(women /men) live longer and thus are charged lower premium rates for equivalent life insurance policies. In general, the higher the mortality rate for a group of insureds of the same age and sex, the (higher /lower) the cost of benefits and the premium rate.
9.Brock Mutual Company is organized as a mutual insurer. As a mutual insurer, Brock most likely
- is a non-profit organization
- is owned by its policyowners
- operates through a lodge system
- has stockholders who have voting rights in Brock
10.The different categories of contracts include commutative contracts, bargaining contracts, formal contracts, and unilateral contracts. When Shelby Miller purchased a life insurance policy from the Meadowwiew Insurance Company, she entered into the type of contract known as a
- commutative contract, because Ms. Miller and Meadowiew have agreed to exchange items or services that are equal in value
- bargaining contract, because Ms. Miller and Meadowwiew, as equals, set the terms and conditions of the contract
- formal contract, because Ms. Miller and Meadowwiew met certain formalities concerning the form of the agreement between them
- unilateral contract, because only Meadowwiew made a promise that is legally enforceable
- 1. Lesson 1
- 2. Lesson 2
- 3. Lesson 3
- 4. Lesson 4
- 5. 考试