Experience Refund Provisions of Group Insurance Contracts Are Most Often

question 122

Multiple Choice

Experience refund provisions of group insurance contracts are most often concerned with the manner of distributing any profits between the insurer and the insured group. The agreements usually contain provisions specifying how losses will affect the profit allocations for the insured group. In such situation:

• A) Losses may or may not be charged back
• B) Losses can never be charged back
• C) Gains are distributed according to the agreement between both the parties
• D) If charged back, losses for each group are usually accumulated for a certain number of years

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Definitions:

Full Endorsement

A signature on the back of a negotiable instrument, such as a check, that specifies the person to whom the instrument is to be paid, transferring ownership.

Blank Endorsement

Blank Endorsement is a signature on a financial instrument, such as a check, without designating a payee, making it payable to the bearer.

Drawer

In accounting, the entity (person or organization) that issues or writes a bill of exchange, check, or draft, instructing another entity to pay.

Drawee

Bank that drawer has an account with.