New Jersey Life Insurance Exam Practice Question
An agreement allowing a resident of one state to acquire an insurance license in another state without taking an examination is known as
Correct Answer: D
Rationale: A reciprocal agreement facilitates the mutual recognition of insurance licenses between states, allowing residents to obtain licenses without additional examinations. This promotes efficiency and cooperation among states.
Option A, an alien agreement, refers to insurance transactions involving foreign insurers, not state licensing. Option B, an interstate agreement, is too broad and does not specifically address licensing without examination. Option C, a ceding agreement, pertains to reinsurance arrangements where one insurer transfers risk to another, unrelated to licensing. Thus, only the reciprocal agreement accurately describes the licensing process between states.
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