exam fx

An insured intentionally did not disclose a material fact on a application for insurance. This would be considered. A. Concealment B. Coercion C. Avoidance D. Misrepresentation

A. Concealment

what are the two types of risks A. Pure & Speculative B. Peril & Morale C. Hazards & Exposure D. Insured & Broker

A. Pure & Speculative

A situation in which a person can only lose or have no change represents. A. Pure risk B. Speculative risk C. adverse selection D. Hazard

A. Pure risk

which of the following is not consideration in an insurance policy? A. The application given to a prospective insured B. something of value exchanged between parties C. the premium amount paid at the time of application D. the promise to pay covered losses

A. The application given to a prospective insured

what is one method for dealing with risk?

Avoidance

what are hazards classified as? A. exposures, loss, Reduction B. physical, moral, morale C. Sharing, peril,avoidance D. agent/producer, Broker, Insured

B. physical, moral, morale

which of the following grants express authority to an agent? A. Fiduciary contract B. State provisions C. Agents contract with the principle D. agents insurance license

C. Agents contract with the principle

An insurance company is domiciled in Montana and transacts insurance in Wyoming. Which term best describes the insurers classification in Wyoming? A. Domestic B. Unauthorized C. Foreign D. Allen

C. Foreign

what is the term for the entity that an agent represents regarding contractual agreements with third parties? A. Designee B. insured C. Principal D. Client

C. Principal

Insurance, an offer is usually made when? A. the agent delivers the policy to the policyholder B. The agent explains policy provisions to a potential applicant C. The applicant submits an application for insurance. D. The insurer approves the application and receives the initial premium

C. The applicant submits an application for insurance.

what is an example of Avoidance? A. Conditions and actions that increase risk or probability of loss B. activities that may increase the chance of a loss occurring C. if a person wanted to avoid the risk of being killed in an airplane crash, he/she might choose never to fly in an airplane D. reduce expenses and improve cash flow

C. if a person wanted to avoid the risk of being killed in an airplane crash, he/she might choose never to fly in an airplane

Which insurance principle states that if a policy allows for greater compensation than the financial loss incurred, the insured may only receive benefits for the amount lost? A. Consideration B. Reasonable expectations C. indemnity D. Insurable interest

C. indemnity

Which of the following terms for an insurer means the same as "authorized". A. Certified B. Licensed C. Legal D. Admitted

D. Admitted

what is the purpose of retention?: A. To reduce expenses and improve cash flow; B. To increase control of claim reserving and claims reserving and claims settlements; C. To fund for losses that cannot be insured D. All of the above

D. All of the above

For the purpose of insurance, risk is defined as A. The guarantee of loss B. The cause of loss C. An event that increases the chance of loss D. The uncertainty or chance of loss

D. The uncertainty or chance of loss

conditions and actions that increase risk or probability of?

Hazards

Refer to those applicants who may lie on an applicants who may lie on an application for insurance, or the past have submitted fraudulent claims against an insurer

Moral Hazards

producers, as first- line or field underwriters, attempt to sell their company's policies to qualified applicants.

exposure

protection

insurance

transfer of loss

insurance

basis for a claim

loss

reduction of value

loss

casualty insurance insures against the loss and nor damage of property and resulting liabilities.

peril

health insurance insures against the loss of physical property or the loss of income caused by the insured's sickness or accidental injury.

peril

life insurance insures against the financial loss caused by premature death of the insured

peril

property insures against the loss of physical property or the loss of its income producing abilities

peril

cause of loss

perils

what does retention mean?

planned assumption of risk by an insured through the use of deductibles (also known as self-insured when insured accepts the responsibility for the loss before the insurance company pays.

a reciprocal insurance exchange is a what kind of arrangement.

risk sharing

Due to each individuals specific past medical history, occupation habits, age, sex, and other factors, the insurer's exposure to loss varies.

the true nature of that exposure in not known until the underwriting process is complete