New York Guaranty Corporation & Fraud Prevention — New York Insurance Law — Life & Health Practice Test
21 questions in this topic · 21 drawn at random this round
Under N.Y. Insurance Law §409, which insurers must establish and file a fraud prevention plan with the superintendent?
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This New York Insurance Law — Life & Health New York Guaranty Corporation & Fraud Prevention practice set has 21 practice questions based on the official exam materials, each with an instant explanation.
Sample questions
Three questions from the New York Guaranty Corporation & Fraud Prevention bank with the correct answer and an explanation. The practice quiz above draws 21 questions at random from the same bank.
What is the primary purpose of the Life Insurance Company Guaranty Corporation of New York, established under N.Y. Insurance Law Article 77?
- To provide funds that protect policy owners, insureds, beneficiaries, and annuitants against losses caused by the impairment or insolvency of a member life or health insurer — Correct answer
- To set the premium rates that all New York life insurers must charge
- To act as a state-run life insurer of last resort that issues its own policies directly to consumers
- To license and discipline life insurance producers in New York
Explanation: N.Y. Ins. Law §7702 (Article 77) states the corporation's purpose is to provide funds to protect policy owners, insureds, beneficiaries, annuitants, payees, and assignees against losses arising from the impairment or insolvency of a member insurer.
Handbook: NY Guaranty & Fraud Prevention — Guaranty Corporation Purpose
The Life Insurance Company Guaranty Corporation of New York is best described as:
- A not-for-profit legal entity whose members are the insurers licensed to write direct life insurance, health insurance, or annuities in New York — Correct answer
- A for-profit reinsurance company that competes with private insurers for business
- A federal agency operating under the U.S. Department of the Treasury
- A division of the National Association of Insurance Commissioners (NAIC)
Explanation: N.Y. Ins. Law §7706 creates the corporation as a not-for-profit legal entity whose membership consists of insurers licensed to transact direct life insurance, health insurance, or annuity business in New York.
Handbook: NY Guaranty & Fraud Prevention — Corporation Structure & Membership
How is the New York Life & Health Insurance Guaranty Corporation funded?
- Through assessments levied on its member insurers — not through direct charges to policyholders or general state tax revenue — Correct answer
- Entirely out of the New York State general fund, like a state agency
- From a per-policy surcharge that consumers pay directly at the point of sale
- From federal FDIC-style deposit insurance premiums
Explanation: N.Y. Ins. Law §7709 authorizes the corporation to levy assessments against its member insurers to raise the funds needed to cover the guaranteed obligations of an impaired or insolvent member.
Handbook: NY Guaranty & Fraud Prevention — Funding by Member Assessments