P&C - QUIZ 5

Flat rate cancellation is described as: Termination of an insurance contract or bond with the premium charge adjusted in proportion to the exact time the protection has been in force. A policy is terminated because the premiums have not been paid. The method used when a policy is canceled by the insured before it reaches the expiration date. A type of cancellation whereby the insured can cancel without penalty. The insured receives a 100% refund of Premium.

A type of cancellation whereby the insured can cancel without penalty. The insured receives a 100% refund of Premium.

Which of the following is not a common law defense? Assumption of risk Last clear chance Comparative negligence rContributory negligence

Comparative negligence

Proximate cause refers to: a person should have acted a certain way in that circumstance, but did not a product causes bodily injury or property damage an uninterrupted chain of events resulting from negligence causes injury or damage an individual`s negligent behavior does not mean he will be held legally liable

an uninterrupted chain of events resulting from negligence causes injury or damage

All of the following are categorized torts EXCEPT: Adverse selection Negligence Intentional Absolute/Strict

Adverse selection

Which would not be a tort? Keeping a pet rattle snake Negligence Any legal wrong Strict liability

Any legal wrong

A legal right of recovery can be based on which of the following? Statutes Any one of these Contracts Torts

Any one of these Statutes Contracts Torts

Amounts paid for actual loss or injury are known as: Punitive damages Compensatory damages General damages Specific damages

Compensatory damages

When two or more perils happen at the same time, in sequence, and cause a loss, this is referred to as: Open peril Named peril All-risk Concurrent causation

Concurrent causation

Which of the following is NOT a description of what the California Worker`s Compensation Inspection Rating Bureau (WCIRB) does? Inspects risks for classification or rate purposes to furnish to the insurer and upon request of the employer. Provides reliable statistics and rating information regarding worker`s compensation and employer`s liability insurance. Develops information about property and liability risk and the property/casualty insurance industry`s leading supplier of statistical, actuarial, underwriting, and claims data. Collects and tabulates information and statistics for the purpose of developing pure premium rates to be submitted to the commissioner for issuance or approval.

Develops information about property and liability risk and the property/casualty insurance industry`s leading supplier of statistical, actuarial, underwriting, and claims data.

A special surplus line broker may transact Special Surplus Lines. All of the following are special surplus lines EXCEPT: Aircraft insurance Insurance on property or operations of railroads engaged in interstate commerce Farm or cattle ranch Reinsuring the liability of an admitted insurer

Farm or cattle ranch

Loss of rent, profits, expenses necessary to keep a business running until the damage can be fixed are examples of: Named perils Direct loss Indirect loss Loss exposure

Indirect loss

The Commissioner shall establish a list of all surplus line insurers who have met the recognized requirements for such title and shall issue a master list at least semiannually. This list is known as: OSHA LESLI SEUA list of surplus lines

LESLI

The Tyler-Star Newspaper wrote an article about Jim`s Bakery that made Jim look like a racist. This type of injury to Jim`s character is known as: Libel Misrepresentation Absolute liability Slander

Libel

Which of the following terms describes an estimate of the amount an insurer will pay for a claim? Loss Reserve Merit rate Rescission Manual rate

Loss Reserve

All of the following are methods of managing risk EXCEPT: Retention Transfer Rescission Avoidance

Rescission

Which method of managing risk is described as NOT purchasing insurance at all, or paying part of a loss when it occurs? Reduction Transfer Retention Avoidance

Retention?????

When someone willingly gives up the right to sue a person who was at fault, this is known as: Mediation Causation Subrogation Arbitration

Subrogation

Insurance that cannot be procured through admitted insurers may, under certain circumstances, be placed with nonadmitted insurers. This is known as: Surplus lines Special surplus lines Tort lines Non-standard lines

Surplus lines

Which organization is the leading source of information about property and liability risk and is the property/casualty insurance industry`s leading supplier of statistical, actuarial, underwriting, and claims data? Department of Data and Statistics (DDS) The California Worker`s Compensation Inspection Rating Bureau (WCIRB) Department of Insurance (DOI) The Insurance Service Office (ISO)

The Insurance Service Office (ISO)

Which of the following is NOT an example of assumption of risk? A passenger on a helicopter tour of an exotic island. The driver of a limousine service. A guest passenger in an automobile. A spectator at a baseball game.

The driver of a limousine service.

Short rate cancellation is described as: Termination of an insurance contract or bond with the premium charge adjusted in proportion to the exact time the protection has been in force. A policy is terminated because premiums have not been paid. A type of policy the insured can cancel without penalty. The insured receives a 100% refund of the premium. The method used when a policy is canceled by the insured before it reaches the expiration date

The method used when a policy is canceled by the insured before it reaches the expiration date

Punitive damages are: amounts paid for actual loss or injury sustained. losses that are not easily measured in dollar amounts. a form of punishment imposed by the court upon the individual responsible for a loss. losses of property or injuries resulting in medical bills.

a form of punishment imposed by the court upon the individual responsible for a loss.

Lapse refers to: continuance of an insurance policy beyond its original term discontinuance of an insurance policy beyond its original term a policy is terminated because the premiums have not been paid. terminating one`s insurance policy

a policy is terminated because the premiums have not been paid.

Defamation is an intentional tort that damages one's reputation that is: false neither false or either written or spoken are correct either written or spoken both false and either written or spoken are correct

both false and either written or spoken are correct

If an insured is 25% at fault and the insurer settles proportionally, this is: common law negligence comparative negligence contributory negligence modified no fault

comparative negligence

Least professional method to identify loss exposure would be: checklists and surveys contracts & agreements financial statements copying previous apps.

copying previous apps.

Payment for the loss of the ability to bear children or loss of limb would be: specific damages general damages special damages punitive damages

general damages

Before determining liability based on negligence, the following requirements must be met EXCEPT: unbroken chain breach duty gross negligence

gross negligence

A broken or interrupted chain of events is: intentional tort intervening cause proximate cause breach of duty

intervening cause

Comparative negligence is best described as: the injured party is fully responsible for the claim and the damages are not reduced accordingly the injured party must be completely free of fault in order to collect. part of the claim is paid for by the insured`s own insurance company; however, modification is made to the settlement amounts based on the idea of relative negligence, which assigns a percentage of carelessness to each party involved. people seeking insurance at the last minute when they need it.

part of the claim is paid for by the insured`s own insurance company; however, modification is made to the settlement amounts based on the idea of relative negligence, which assigns a percentage of carelessness to each party involved.

In computing the loss payment for contributory negligence the claim would: pay nothing if the injured party didn`t meet the standard of self-protection in any form. pay the full amount of the claim under all circumstances. be reduced by the percentage of fault for which the client is found responsible pay out the amount of the claim, minus the deductible.

pay nothing if the injured party didn`t meet the standard of self-protection in any form.

Insurance Services Office develops forms and lost cost rating for: workers' compensation property and casualty surety ship and crops Both property and casualty and surety ship and crops

property and casualty

Combined ratio is defined as: the percentage of each premium dollar a company spends on claims and expenses. the reduction, decline, or disappearance of value of the person or property insured in a policy, by a peril insured against. Incorrect AnswerThe company`s cost of operations, including overhead, marketing, and commissions. Incorrect Answerthe amount of money an insurer pays for operation of the business.

the percentage of each premium dollar a company spends on claims and expenses.

Loss is defined as: the reduction, decline, or disappearance of value of the person or property insured in a policy, by a peril insured against. the amount of money an insurer pays for operation of the business. reduction of a company`s cost of operations, including overhead, marketing, and commissions. the percentage of each premium dollar a company spends on claims and expenses.

the reduction, decline, or disappearance of value of the person or property insured in a policy, by a peril insured against.

When an employer is held responsible for actions of an employee this is: General liability absolute liability vicarious liability contributory liability

vicarious liability