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What is the effect when the most favorably situated exposures leave a (potential) insurance pool?


A) Premiums go down.
B) Nothing
C) The cost of insurance needs to be borne by more policyholders.
D) The cost of insurance needs to be borne by fewer policyholders.

E) None of the above
F) A) and B)

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All the following statements are true concerning mutual insurance companies except:


A) they may pay dividends
B) they are owned by their policyholders
C) they are legally organized as perpetual partnerships
D) they are nonprofit

E) B) and C)
F) A) and B)

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Both stock and mutual insurance companies are incorporated.

A) True
B) False

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