Arkansas Life and Health Insurance Practice Exam

Which entity is primarily engaged in charitable and benevolent activities and is usually organized as a non-profit?

1. Fraternal Benefit Society

2. Health Maintenance Organization

3. Preferred Provider Organization

4. Risk Retention Group

The correct answer is: Fraternal Benefit Society

A fraternity benefit society shares similarities with other types of commercial insurance companies, such as health maintenance organizations and preferred provider organizations, as they aim to provide financial protection and healthcare services to their members. However, the main difference is that a fraternal benefit society is primarily focused on charitable and benevolent activities, while the others are primarily for-profit entities. Additionally, a risk retention group is not a non-profit organization and is usually formed for the purpose of providing liability insurance to its members. Therefore, it is primarily engaged in insurance activities rather than charitable and benevolent activities.