Author Question: Fly-By-Night Insurance Company had much larger losses than forecast. The company did not charge ... (Read 22 times)

CBme · **on:** Jul 11, 2018

Fly-By-Night Insurance Company had much larger losses than forecast. 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 fund
B) premium rebates
C) risk-based capital
D) admitted assets

Question 2

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. I'll give you 500 of my commission 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) rebating
B) churning
C) twisting
D) backdating