Montana State Life Insurance Practice Exam

Which document is required for a person to act as an administrator?

1. A signed contract

2. A license from the state

3. A written agreement with the insurer

4. A certification of training

The correct answer is: A written agreement with the insurer

The correct answer is a written agreement with the insurer. For an individual to act as an administrator in the context of insurance, this document formalizes the relationship between the administrator and the insurance company. It outlines the terms under which the administrator will operate, the responsibilities involved, and the authority granted to perform certain tasks related to policyholders or beneficiaries. While a signed contract generally implies an agreement is in place, a written agreement with the insurer is specific to the insurance industry and essential for ensuring compliance with state regulations and the insurer's policies. This agreement also serves as a legal safeguard for both parties, detailing expectations, duties, and remuneration for the services provided. A license from the state is necessary for many roles within the insurance industry but particularly pertains to the provision of services rather than the administrative function itself. Certification of training could enhance an administrator's qualifications but is not a formal requirement to act as an administrator.