Legal concepts

What happens when an initial offer is answered with a counteroffer?

Initial offer is void

In what way are insurance policies said to be aleatory?

Involves the potential for the unequal exchange of value

An agent whose actions exceed the authority granted by contract is

Not backed by the insurer

Which element of a contract constitutes a define and unqualified proposal by one party to another?

Offer

All of these statements correctly describe an aleatory contract except

Only one party makes any kind of legally enforceable offer

What is the insurer responsible for when a producer is acting within the scope of authority granted in the agency contract?

Responsible for acts by the producer that are authority only

Which of the following would not have a restricted ability to enter into a contract?

Small employer

When a producer acts within the scope of his/her contractual authority, which of the following is legally responsible for these actions?

The insurer

During the application process, a statement made by an applicant that becomes part of the contract is considered to be a

Warranty

Use of XYZ Insurance Company brochures, business cards, and rating guides is an example of

apparent authority

An agreement is reached when an insurance contract is formed. Which of the following is NOT considered to be an element of an agreement?

equity

XYZ Insurance Company gives direct authority to its producers to sell insurance through an agency contract, but nothing is stated regarding the collection of premiums. Which authority grants the producer the right to collect premiums?

implied authority

Under the law of agency, the principal is considered to be

insurer

Statements made by an insured on an accident and health insurance application are considered to be

representations

An insurance company can be liable for a producers unauthorized acts

when the agency contract is unclear concerning the authority given