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3 Cards in this Set
- Front
- Back
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Ohm Insurance Company, incorporated in Springfield, Illinois, was formed in 1952 by a group of investors who own shares in the company. Ohm is currently licensed to sell life insurance in the states of Illinois, Pennsylvania, and Maryland. When Ohm is doing business in Pennsylvania, which of the following would be a correct classification of Ohm?
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B) foreign insurer
The answer is (B). (A) is incorrect because an alien insurer is based in another country. (C) is incorrect because extraterritorial refers to out-of-state coverage, not an out-of-state insurer. (D) is incorrect because Ohm is licensed in Pennsylvania. |
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Which of the following statements concerning the independent agency system in property and liability insurance is (are) correct? I. Commission rates paid to an agent on the sale of new business tend to be less than those paid for renewals. II. The agent owns the business and is able to place it with any one of several companies at renewal time.
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(B) II only
The answer is (B). I is incorrect because the commission rates for renewal policies tend to be the same as for new policies. |
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All the following are reasons for demutualization of an insurance company EXCEPT
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(C) to better protect the insurer from a hostile takeover
The answer is (C). Vulnerability to a hostile takeover is a disadvantage of demutualization |
