The policy issued by the insurer to the insured (an individual or a business enterprise) is referred to as ______________and gives rise to the insurer's "direct" written insurance premiums.
A. primary insurance
B. insurance policy
C. insurance protection
D. accounting insurance
A mutual company may issue shares of guaranty capital that have a stated par value.
A. True
B. False
Which of the following two factors cannot be repaid unless the surplus of the company is in excess of its required minimum?
A. guaranty capital and the interest thereon
B. treasury stock and guaranty capital
C. guaranty capital and exchange stock
D. stockholder funds and the interest thereon
______________ is the management of the reciprocal, becoming both the organizer and promoter of the exchange.
A. Fractional share
B. recognized fund
C. attorney-in-fact
D. ongoing mutual gains
Stock of a company that has been issued, fully paid for and subsequently reacquired by the company is known as:
A. capital stock
B. treasury stock
C. exchange stock
D. Gain stock
Who do not issue capital stock, thus they have no stockholders?
A. Mutual insurance companies
B. Demutualization contracts
C. prospective companies
D. retrospective companies
What is a voluntary unincorporated business created to write insurance for its subscribers: a group of individuals, partnerships, and corporations in which each agrees to insure the other?
A. surplus stock exchange
B. escrow requirements funds
C. treasury stock exchange
D. reciprocal insurance exchange
What says that companies not authorized or licensed to do business in the domiciliary state of the ceding company?
A. reinsurers' treaties
B. unauthorized reinsurers
C. unauthorized funds
D. unrecognized dividends
The minimum amount of policyholders' surplus required for a new insurer depends on which of the following factor?
A. the type of business organization being formed
B. the lines of insurance to be written
C. Both A and B
D. Neither A nor B
The contract usually calls for a ______________of commission to be paid throughout the year, with an adjustment up or down at the end of the year depending on the final loss ratio.
A. administrative agreement
B. provisional rate
C. revolutionary rate
D. write-ins aggregated rate
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