瑞达 Rejda 保险教材英文练习题08

1、Principles of Risk Management and Insurance, 11e (Rejda)Chapter 8 Government Regulation of Insurance1) Reasons for regulation of insurance include which of the following?I.Maintaining insurer solvency.II.Ensuring reasonable rates.A) I onlyB) II onlyC) both I and IID) neither I nor IIAnswer: CQuestio

2、n Status: Previous Edition2) The right of the states to regulate the business of insurance was first established byA) the South-Eastern Underwriters Association case.B) Paul v. Virginia.C) the Financial Modernization Act. D) the Sherman Act.Answer: BQuestion Status: Previous Edition3) The basis for

3、current state regulation of insurance isA) the McCarran-Ferguson Act.B) Paul v. Virginia.C) the South-Eastern Underwriters Association case.D) the National Association of Insurance Commissioners.Answer: AQuestion Status: Previous Edition4) All of the following statements about the methods of regulat

4、ing insurance are true EXCEPTA) All states have insurance laws that regulate the operations of insurers.B) Insurers are totally exempt from regulation by federal agencies and laws.C) The courts regulate insurance in many ways, including the interpretation of policy clauses and provisions.D) State in

5、surance commissioners, through administrative rulings, have considerable power over insurers doing business in their states.Answer: BQuestion Status: Previous Edition5) Which of the following statements about the licensing of insurance companies is (are) true?I.A new capital stock insurer must meet

6、minimum capital and surplus requirements, which vary by state and line of insurance.II.The licensing requirements for insurance companies are less stringent than those imposed on most other types of firms.A) I onlyB) II onlyC) both I and IID) neither I nor IIAnswer: AQuestion Status: Previous Editio

7、n6) 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)A) nonadmitted insurer.B) foreign insurer.C) alien insurer.D) reciprocal insurer.Answer: BQuestion Status: Previous Edition7) An insurance company cha

8、rtered in another country has been licensed to operate in your state. In your state, the insurer would be considered a(n)A) nonadmitted insurer.B) foreign insurer.C) alien insurer.D) reciprocal insurer.Answer: CQuestion Status: Previous Edition8) Which of the following is considered a nonadmitted as

9、set for an insurer?A) cashB) preferred stocksC) real estateD) office furnitureAnswer: DQuestion Status: Previous Edition9) The policyholders surplus of an insurer is defined as the difference between itsA) assets and its liabilities.B) premium income and its expenses.C) reserves and its liabilities.

10、D) assets and its nonadmitted assets.Answer: AQuestion Status: Previous Edition10) Which of the following statements about the use of risk-based capital requirements is (are) true?I.Insurers must have a certain amount of capital depending on the riskiness of their investments and insurance operation

11、s.II.Insurers may be required to take certain actions depending on how much capital they have relative to their risk-based capital requirements.A) I onlyB) II onlyC) both I and IID) neither I nor IIAnswer: CQuestion Status: Previous Edition11) Which of the following statements about the regulation o

12、f insurance company investments is (are) true?I.The purpose of regulating insurance company investments is to prevent insurers from making unsound investments which could threaten their solvency.II.Life insurers can invest an unlimited amount of their assets in common stocks.A) I onlyB) II onlyC) bo

13、th I and IID) neither I nor IIAnswer: AQuestion Status: Previous Edition12) Which of the following statements about the regulation of life insurance companies is (are) true?I.The percentage of assets a life insurance company may invest in a specific type of asset (e.g., stocks or bonds) is generally

14、 limited by law.II.The purpose of limiting the accumulation of surplus is to prevent an insurer from increasing its surplus at the expense of policyowner dividends.A) I onlyB) II onlyC) both I and IID) neither I nor IIAnswer: CQuestion Status: Previous Edition13) Which of the following statements ab

15、out state insurance guaranty funds is (are) true?I.They limit the amount that policyowners can collect if an insurer becomes insolvent.II.They are usually funded by general revenues of the states.A) I onlyB) II onlyC) both I and IID) neither I nor IIAnswer: AQuestion Status: Previous Edition14) Unde

16、r one type of rate regulation, insurers are not required to file their rates with the state insurance department. 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

17、 determine the price and availability of insurance, rather than discretionary acts of regulators. This type of rate regulation is called A) a flex-rating law.B) a prior-approval law.C) a file-and-use law.D) no filing required.Answer: DQuestion Status: Revised15) Under what type of rate regulation ar

18、e insurers required to obtain approval of rates before using them if the rate change exceeds a specified predetermined range?A) flex-rating lawB) prior-approval lawC) file-and-use lawD) use-and-file lawAnswer: AQuestion Status: Revised16) By misrepresenting the true facts, Gretchen was able to convi

19、nce a client to drop a life insurance policy with another company and to purchase a policy from the company that Gretchen represents. Gretchen has engaged in an illegal sales practice calledA) bait and switch.B) rebating.C) retaliating.D) twisting.Answer: DQuestion Status: Previous Edition17) Which

20、of the following statements about premium taxes is (are) true?I.They are levied by the federal government as a result of the McCarran-Ferguson Act.II.Their primary purpose is to provide funds for insurance regulation.A) I onlyB) II onlyC) both I and IID) neither I nor IIAnswer: DQuestion Status: Pre

21、vious Edition18) Advantages cited by proponents of federal regulation of insurance include all of the following EXCEPTA) greater efficiency.B) greater opportunity for innovation.C) uniformity of laws.D) more competent regulators.Answer: BQuestion Status: Previous Edition19) Advantages cited by propo

22、nents of state regulation of insurance include all of the following EXCEPTA) uniformity of laws by the NAIC.B) greater opportunity for innovation.C) greater responsiveness to local needs.D) centralization of political power.Answer: DQuestion Status: Previous Edition20) Shortcomings of state regulati

23、on of insurance found by Congressional committees and the General Accounting Office include all of the following EXCEPTA) inadequate protection of consumers.B) inadequate market conduct examinations.C) inability to respond to unique local needs.D) regulators over-responsiveness to the insurance indu

24、stry.Answer: CQuestion Status: Previous Edition21) The major reasons for insurer insolvency include which of the following?I.Inadequate pricing and loss reserves.II.Rapid growth and inadequate surplus.A) I onlyB) II onlyC) both I and IID) neither I nor IIAnswer: CQuestion Status: Previous Edition22)

25、 The principal methods of ensuring insurer solvency include all of the following EXCEPTA) Security and Exchange Commission oversight of investments.B) risk-based capital standards.C) field examinations.D) review of required annual financial statements.Answer: AQuestion Status: Previous Edition23) Wh

26、ich of the following is an argument for repealing the McCarran-Ferguson Act?A) It would make it easier for small insurers to compete.B) It would encourage sharing of information.C) It would make it easier to develop common coverage forms.D) It would correct for defects in state regulation.Answer: DQ

27、uestion Status: Previous Edition24) 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

28、premiums by 75 percent. This scenario demonstrates which of the following rationales for the regulation of insurance?A) maintain insurer solvencyB) compensate for inadequate consumer knowledgeC) ensure reasonable ratesD) make insurance availableAnswer: CQuestion Status: Previous Edition25) In which

29、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) Paul v. VirginiaB) South-Eastern Underwriters Association caseC) McCarran-Ferguson ActD) Financial Modernization ActAnswer: BQuestion Sta

30、tus: Previous Edition26) 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)A) domestic insurer.B) captive insurer.C) foreign insurer.D) alien insurer.Answer: DQuestion Status: Previous Edit

31、ion27) XYZ Mutual Insurance Company has total assets of $10 million. The policyholders surplus is $2 million. What are XYZ Mutuals total liabilities?A) $4.0 millionB) $8.0 millionC) $10.0 millionD) $12.0 millionAnswer: BQuestion Status: Previous Edition28) Mutual Property Insurance Company has a sur

32、plus of $2 million. According to a conservative rule of thumb, how much new net premiums can Mutual Property Insurance Company safely write?A) $2 millionB) $8 millionC) $10 millionD) $20 millionAnswer: AQuestion Status: Previous Edition29) Fly-By-Night Insurance Company had much larger losses than f

33、orecast. 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?A) guaranty fundB) premium rebatesC) risk-based capitalD) admitted assetsAnswer: AQuestion Status:

34、Previous Edition30) 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. Ill give you $500 of my co

35、mmission 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?A) rebatingB) churningC) twistingD) backdatingAnswer: AQuestion Status: Previous Edition31) State Xs premium tax rate is 2 percent. State Ys premium tax

36、 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

37、A) tax tariff.B) guaranty fund assessment.C) risk-based capital requirement.D) retaliatory tax law.Answer: DQuestion Status: Previous Edition32) 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

38、 following legislative acts eliminated the prohibition that prevented banks, insurers, and investment firms from entering into one anothers markets?A) The McCarran-Ferguson ActB) The Tax Reform ActC) The Consolidated Omnibus Budget Reconciliation ActD) The Financial Modernization Act (Gramm-Leach-Bl

39、iley Act)Answer: DQuestion Status: Previous Edition33) 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

40、of rating law is calledA) prior approval. B) file-and-use.C) use-and-file.D) flex rating.Answer: CQuestion Status: Previous Edition34) The regulation of insurers in areas that affect consumers, which include claims handling, underwriting, complaints, advertising, sales practices, and other trade pra

41、ctices is calledA) solvency surveillance.B) market conduct regulation.C) combined ratio analysis.D) market share regulation.Answer: BQuestion Status: Previous Edition35) The National Association of Insurance Commissioners (NAIC) administers an early warning system to help ensure insurance company so

42、lvency. This system uses data provided in the annual statement to identify companies that may pose a solvency risk. This early warning system is calledA) the risk-based capital requirements.B) an insurance guaranty fund.C) the Insurance Regulatory Information System (IRIS)D) the assessment method.An

43、swer: CQuestion Status: Previous Edition36) Which of the following statements is (are) true regarding the quality of insurance regulation?I.The quality of insurance regulation is uniform from state to state.II.All evidence suggests federal regulation of insurance would improve the quality of regulat

44、ion.A) I onlyB) II onlyC) both I and IID) neither I nor IIAnswer: DQuestion Status: Previous Edition37) Which of the following statements concerning the proposed optional federal charter for life insurers is (are) true?I.Large insurers operating in many states would more likely prefer a state charte

45、r while smaller, regional, insurers would more likely choose a federal charter.II.Proponents of the federal charter argue that it would speed the development and approval of new products.A) I onlyB) II onlyC) both I and IID) neither I nor IIAnswer: BQuestion Status: Previous Edition38) All of the fo

46、llowing are methods helping to insure the solvency of insurers EXCEPTA) commercial lines deregulation B) risk-based capital standards.C) the NAICs early warning system.D) the NAICs FAST screening system.Answer: AQuestion Status: Previous Edition39) A score derived from an individuals credit history

47、and other factors that is used by many auto and homeowners insurers for underwriting and rating purposes is called a(n)A) CLUE score.B) insurance score.C) expense ratio score.D) combined ratio score.Answer: BQuestion Status: Previous Edition40) All of the following are arguments in favor of using an

48、 applicants credit record in personal lines underwriting EXCEPTA) Most consumers have good credit records and benefit when credit history is used as a rating factor. B) Use of credit data in underwriting or rating discriminates against certain groups.C) Underwriting and rating may be more consistent

49、 if applicants credit histories are considered.D) There is high correlation between an applicants credit record and future claims experience.Answer: BQuestion Status: Previous Edition41) All of the following statements about insurance regulation are true EXCEPTA) Insurance commissioners are appointed in some states and elected in s