LAH - General Insurance (1)
What documentation grants express authority to an agent?
Agent's contract with the principal
If an insurer meets the state's financial requirements and is approved to transact business in the state, it is considered to be...
Authorized
An insurance contract must contain all of the following to be considered legally binding EXCEPT... Competent parties, beneficiary's consent, offer and acceptance, consideration
Beneficiary's consent
Which of the following must an insurer obtain in order to transact insurance within a given state... Certificate of authority, producer's certificate, business entity license, insurer's license
Certificate of authority
An applicant knowingly fails to communicate information that would help an underwriter make a sound decision regarding coverage. This is an example of... Fraud, breach of warranty, concealment, waiver
Concealment
Because an insurance policy is a legal contract, it must conform to the state laws governing contracts which require all of the following except... legal purpose, offer and acceptance, conditions, consideration
Conditions
Something of value exchanged between the insurer and the insured is considered an...
Consideration
Which of the following best describes an insurance company that has been formed under the laws of this state... Alien, foreign, domestic, sovereign
Domestic
Which of the following is considered to be a morale hazard? Driving recklessly, smoking,working as a firefighter, engaging in illegal activities
Driving recklessly
The authority granted to an agent through the agent's contract is referred to as...
Express authority
When would a misrepresentation on the insurance application be considered fraud?
If it is intentional and material
Which statement regarding insurable risks is NOT correct? A: The insurable risk needs to be statistically predictable B: An insurable risk must involve a loss that is definite as to cause, time, place and amount C: Insureds cannot be randomly selected D: Insurance cannot be mandatory
Insured cannot be randomly selected
Insurance is a contract by which one seeks to protect another from...
Loss
What is the major difference between a stock company and a mutual company?
Ownership
Which of the following is the most common way to transfer risk? Purchase insurance, increase control of claims, lessen the possibility of loss, name a beneficiary
Purchase insurance
Which of the following insurance options would be considered a risk-sharing arrangement? Stock, mutual, surplus lines, reciprocal
Reciprocal