Primaria study set chapter #1
what term best describes the act of withholding material information that would crucial to an underwriting decision?
concealment
because an insurance policy is a legal contract,it must conform to the state laws governing contracts which require all of the following elements except.
conditions
An insurance company is domiciled in montatna and transacts insurance in wyoming which term describes the insurers classification in wyoming?
foreign
under the fair credit reporting act individuals rejected for insurance due to information
must be informed of the source of the report
Contracts that are prepared by one party and submitted to the other party on a take it or leave it basis are classified as
Contracts of adhesion.
which of the following best completes this sentnce: A mutal assessment insurer is a
Mutual insurance company
Hazard is best defined as
Something that increases the risk of loss
how are state insurance guaranty associations funded
by their memebers
which of the following includes information regarding a person's credit, character, reputation, and habits?
consumer report
which of the following best describes an insurance company that has been formed under the laws
domestic
which of the following are the authorities that an agent can hold?
express and implied
in insurance transactions fiduciary responsibility means
handling insurer funds in trust a capacity
which of the following is not true regarding a certificate of authority?
it is issued to group insurance participants
a participating insurance policy may do which of the following?
pay dividends to the policy owner
which services are associated with standard poor's and am best?
rating the financial strength of insurance companies
which are associated with standard and poor's and am best?
rating the financial strength of insurance companies.
if a court ordered payment for loss that was not covered in the policy even if it was cearly worded,it would be an example of which legal concept?
reasonable and expectataions
what method do insurers use to protect themselves
reinsurance
adverse selection is a concept best described as
risks with a higher probability of loss seeking insurance more often than other risks
peril is most easily defined as
the cause of loss insured against
which of the following is not a goal of risk retention
to minimize the insured level of liability in event of loss
the federal fair credit reporting act
Regulates consumer reports
what is a capitve producer?
a person who sells many types of policies for only one insurance company
representations are written or oral statements made by the applicant that are?
considered true to the best of the applicant knowledge
an insurance company assures its new policyholders that their premium costs will not increase for a period of at least five years.however due to increasing financial strain, they plan to raise premium for all insureds by 10% over the next two years.what term best describes this act?
fraud
events or conditions that increase the chance of an insured loss occurring are referred to as
hazards
which authority is NOT stated in an agents contracts but is required for the agent to conduct business?
implied
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?
indemnity
a life insurance policy has a legal purpose if both of which of the following elements exist
insurable interest and consent
insurance is a contract that by which seeks to protect anthoer from
loss
which of the following is not correct regarding false statements by a person engaged in the business of insurance?
only written statements can be consider fraud.
Who might receive dividends from a mutual insurer?
policyholders
all of the following are examples of risk retention except
premiums
any licensed person whose activities affect interstate commerce and who knowingly makes false material statements related to the business of insurance may be imprisoned for up to?
10 years
what is the maximum penalty for habitual willful with noncompliance with fair credit reporting act?
2,500
wtihin how many days of requesting an investigative consumer report must an insurer notify consumer in writinig that report will be obtained?
3 days
If a consumer requests additional information concerning a investigative consumer report,how long does the insurere or reporting agency have to comply?
5 days
what documentation grants express authority to an agent
agents contract with the principal
the authority to an agent through the agent contract is referred to as
express authority
Which authority is NOT stated in an agent's contract but is required for the agent to conduct business?
implied
which of the following is the basis for a claim against an insurance policy?
loss
Which organization defends a state's right to oversee the insurance industry?
national conference of insurance legislators
when an individual insurance,what risk management technique is he or she practicing?
transfer
in forming an insurance contract,when does acceptance usually occur?
when an insurers underwriter approves coverage
the formation and recommendation of model insurance legislation and regulations designed to bring uniformity from state to state is one of the purposes of
NAIC
which of the following statements is an accurate comparsion between private and goverment insurers?
Private insurers may be authorized to transact insurance by state insurance departments.
if an insurer meets the states financial requirements and is approved to transact business in the state, it is considered to be
authorized
the risk management technique that is used to prevent a specific loss by not exposing oneself to that activity is called
avoidance
an insurance producer who by contract is bound to write insurance for only one company is classified as an?
captive agent
an insurer neglects to pay a legitimate claim that is covered under the terms of the policy.Which of the following insurance principles has the insurer violated?
consideration
which of the following is another term for an authorized insurer?
admitted
in insurance policies,contract ambiguties are automatically ruled in the favor of the insured.what privileges deos the insurer have in order to balance this?
the right to determine the wording of a policy
if only one party to an insurance contract has made a legally enforceable promise, what kind of contract is it?
unilateral
in insurance policies,the insured is not legally bound to any particular action in the insurance contract,but the insurer is legally obligated to pay losses covered by the policy.what contract element does this describe?
unilateral
federal laws make it illegal for any individual convicted of a crime involving dishonesty or breach of trust to work in the insurance business affecting interstate commerce.
without receiving written consent from an insurance regulatory authority
if an insurance company makes a statment that its polices are guaranteed by the existence of the insurance guaranty association,that would be considered
an unfair trade practice
in comparison to consumer reports, which of the following describes a unique characteristic of investigative consumer reports
the consumer's friends, associates, and neighbors provide the reported data
