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Question: 5

The Tidewater Life and Health Insurance Company is owned by its policy owners, who are entitled to certain rights as owners of the company, and it issues both participating and nonparticipating insurance policies. Tidewater is considering converting to the type of company that is owned by individuals who purchase shares of the company’s stock. Tidewater is incorporated under the laws of Illinois, but it conducts business in the Canadian provinces of Ontario and Manitoba.

With regard to the state in which Tidewater is domiciled, it is correct to say that, from the perspective of both Ontario and Manitoba, Tidewater is considered to be the type of corporation known as:

  1. A foreign corporation
  2. An alien corporation
  3. A sister corporation
  4. A domestic corporation


Answer: B

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Question: 3

Regulatory and legislative bodies are among the important environmental forces in the health plan industry. The following statements are about such regulation and legislation. Select the answer choice that contains the correct statement.

  1. Federal guidelines exist to direct health plans on compliance issues when a health plan encounters conflicting state laws in a given service area.
  2. Administrative rules and regulations do not carry the force of law.
  3. As stakeholders in the health plan industry, federal and state governments exert tremendous influence over a health plan’s formation and operations.
  4. In recent years, the number of health plan bills in the state and the federal legislatures has decreased.


Answer: C

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Question: 4

The Surrey Medical Supply Company was formed as a limited partnership. In this partnership, Victoria Lewin is one of the limited partners and Oscar Gould is a general partner. This information indicates that, with respect to the typical characteristics of limited partnerships,

  1. Ms. Lewin has more freedom to opt out of the partnership than does Mr. Gould
  2. Ms. Lewin has more liability for the debts of Surrey than does Mr. Gould
  3. both Ms. Lewin and Mr. Gould participate in the day-to-day management of Surrey
  4. the partnership will continue upon the death of Mr. Gould, whereas it will end with the death of Ms. Lewin


Answer: A

Question: 4

The Surrey Medical Supply Company was formed as a limited partnership. In this partnership, Victoria Lewin is one of the limited partners and Oscar Gould is a general partner. This information indicates that, with respect to the typical characteristics of limited partnerships,

  1. Ms. Lewin has more freedom to opt out of the partnership than does Mr. Gould
  2. Ms. Lewin has more liability for the debts of Surrey than does Mr. Gould
  3. both Ms. Lewin and Mr. Gould participate in the day-to-day management of Surrey
  4. the partnership will continue upon the death of Mr. Gould, whereas it will end with the death of Ms. Lewin


Answer: A