Montana State Life Insurance Practice Exam

The requirement that at least 100 new entrants yearly must be expected is correct for determining insurance eligibility for a debtor group. This stipulation ensures that the group is large enough to spread risk among a sufficient number of individuals, which is a fundamental aspect of insurance. A minimum of 100 new entrants provides a larger risk pool, aiding in the stability and viability of the insurance plan.

Having such a requirement also allows the insurer to assess the group more accurately, ensuring that there are enough participants to make the insurance product feasible and sustainable. This can help prevent situations where an insufficient number of insured individuals leads to higher premiums or other stability issues.

In contrast, the other options do not sufficiently cover the necessary conditions for debtors to qualify for group insurance. For instance, having 75% of debtors eligible or requiring all debtors of the creditor to be insured does not guarantee a robust risk pool necessary for effective insurance underwriting. Additionally, stipulating that the premium must be paid solely by the creditor could restrict the arrangement's overall flexibility and participation, which is not conducive to a healthy insurance environment.