1.An insurance policy that has the premiums invested in stock, bond, or money market funds, and the policy value changes with investment performance is part of the description of ____________.

A.commercial multiple peril insurance

B.credit life insurance

C.group life insurance

D.term life insurance

E.variable life insurance

2.The McCarran-Ferguson Act:

A.designated the Federal Reserve as the primary regulator of all insurance companies.

B.designated the SEC as the primary regulator of insurance companies.

C.has served to keep the primary regulation of all insurance companies at the state level.

D.initiated "variable" life insurance products.

E.instituted capital regulations for insurance companies.

3.Life insurance companies' loans made to their own policyholders are called:

A.endowments

B.ordinary life loans

C.policy loans

D.separate accounts

E.surrender value loans

4.The customers most likely to have a claim against an insurance company are those most eager to apply for an insurance contract.In insurance, this is the essence of the _______________ problem.

A.adverse selection

B.capital adequacy

C.default risk

D.liquidity

E.mismatched maturity

5.In paying a(n) _________________, a beneficiary receives a fixed amount, periodically, over some specified time.

A.annuity

B.credit life policy

C.industrial life policy

D.policy loan

Epolicy reserve

6.Policy reserves are a(n)

A.balance sheet asset.

B.balance sheet liability.

C.income statement revenue item.

D.insurance guarantee fund payment.

E.separate account item.

7.______________________ is in essence "pure" life insurance.

A.Endowment life

B.Term life

C.Universal life

D.Variable life

E.Whole life

8.Consider Novery PC Insurance Company's data

Compute Novery's "combined ratio after dividends."

A.32

B.99

C.106

D.107

E.115

9.In property-casualty insurance, when a claim occurs many years after the relevant insured event, it describes ___________.

A.A long-tail loss

B.A mismatched claim

C.Adverse selection

D.Social inflation

E.The underwriting cycle

10.Hurricane damage for a specific area is an example of a ____________________, for which it is difficult to predict loss exposure.

A.high severity, high frequency event

B.high severity, low frequency event

C.low severity, high frequency event

D.low severity, low frequency event