AD Banker Life Insurance Exam Answered 100% Correct

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Insurers - ANSWER (Insurance Companies or Carriers) provide insurance coverage by issuing particular insurance policies or contracts Insurance Agencies - ANSWER Independent sales organizations that... provide service and distribute insurance policies to consumers Insurance Agents or Producers - ANSWER are licensed individuals representing an insurance company when transacting insurance business Who primarily regulates the insurance industry? - ANSWER The insurance industry is regulated primarily at the state level through the legislative, judicial, and executive branches Legislative Branch - ANSWER Writes and passes state insurance laws or statues designed to protect the insuring public Judicial Branch - ANSWER responsible for interpreting and determining the constitutionality of the statues (interprets the law and makes sure it is constitutionally allowed) Executive Branch - ANSWER (executes/enforces the law) has the power to issue rules and regulations to help enforce statues NAIC - ANSWER National Association of Insurance Commissioners National Association of Insurance Commissioners (NAIC) - ANSWER Provides resources, research, legislative and regulatory recommendations and interpretations for state insurance regulators. Members may accept or reject recommendations. It has no legal authority to enact or enforce insurance laws. The primary goal of the association is to promote state uniformity. Stock Insurance Company - ANSWER Owned by its stockholders/shareholders who elect a Board of Directors to manage the company, the board then elects officers to handle day-to-day activities. Stockholders share in the company's profits and may receive corporate dividends taxable as ordinary income IF declared by the directors. (Dividends not guaranteed) Traditionally, this type of insurer issue non-participating policies, since the policyholders are not entitled to dividends Mutual Insurance Company - ANSWER Owned by policyholders/members who are considered the owners but do not directly manage the company. Board of directors elected by the policyholders/members to manage the company and officers are elected by the board to handle day-to-day operations. When and if declared by the Board, policyholders may receive non-taxable dividends as a return of unused premium. (not guaranteed) This type of insurer typically issues participating policies. Fraternal Insurers or Fraternal Benefit Societies - ANSWER Primarily social organizations that engage in charitable and benevolent activities that primarily provide life insurance to its members. Usually organized on a nonprofit basis. Members are typically from a religious organization, lodge, order, or society. Domestic Insurer - ANSWER An insurer doing business in the jurisdiction in which it is incorporated. Ex. GA incorporated insurer operating in GA Foreign Insurer - ANSWER An insurer licensed to operate in a state but incorporated in another state. Ex. GA Incorporated Insurer operating in TX Alien Insurer - ANSWER An insurance company that is incorporated outside the United States. Ex. Canadian Insurer operating in GA Admitted/Authorized Insurer - ANSWER Insurer who is approved to transact insurance via a Certificate of Authority from the state's Department of Insurance. Non-Admitted/Unauthorized Insurer - ANSWER Insurer not authorized to transact insurance in a given state by not complying with state requirements or by not seeking admission Fair Credit Reporting Act - ANSWER protects the consumer's right to the privacy of credit and financial information, ensuring that all collected data is confidential, accurate, relevant and properly used. FCRA - ANSWER Fair Credit Reporting Act Fair Credit Reporting Act - ANSWER protects the consumer's right to the privacy of credit and financial information, ensuring that all collected data is confidential, accurate, relevant and properly used. credit reports may be obtained only to determine the financial and moral status of an applicant, such as for employment screening or loan approval, or to assist in underwriting by an insurer. pre-notification - ANSWER the insurer must notify the insurance applicant (consumer) that a credit report may be requested as part of the insurer's underwriting requirements, and must have pre-authorization by obtaining the applicant's written consent to request the report. [Show More]

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