Business Law BUS-206

An insurance organization that does not issue insurance policies but provides a meeting place for underwriters to conduct business is known as a

Lloyd's association

What is the major difference between a stock company and a mutual company

Ownership

What is the term for the entity that an agent represents regarding contractual agreements with third parties

Principal

The risk of loss may be classified as

Pure risk and speculative risk

Which services are associated with Standard & Poor's and AM Best?

Rating the financial strength of insurance companies

Which of the following types of insurers is owned by stockholders

Stock

What is a material misrepresentation

A statement by the applicant that, upon discovery, would affect the underwriting decision of the insurance company

What documentation grants express authority to an agent?

Agent's contract with the principal

To legally transact insurance in this state, an insurer must obtain which of the following

Certificate of Authority

An applicant knowingly fails to communicate information that would help and underwriter make a sound decision regarding coverage. This is an example of

Concealment

An insurance contract requires that both the insured and the insurer meet certain conditions in order for the contract to be enforceable. What contract characteristics does this describe?

Conditonal

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

When an insured makes truthful statements on the application for insurance and pays the required premium, it is known as which of the following?

Consideration

Representations are written or oral statements made by the applicant that are

Considered true to the best of the applicant's knowledge

Which authority is NOT stated in an agent's contract but is required for the agent to conduct business?

Implied

An insured purchased an insurance policy 5 years ago. Last year, the insured received a dividend check from the insurance company that was not taxable. This year, the insurer did not send a check from what type of insurer did the insured purchase the policy

Mutual

On a participating insurance policy issued by a mutual insurance company dividends paid to policyholders are

Not taxable since the IRS treats them as a return of a portion or the premium paid.

In case of a loss, the indemnity provision in insurance policies

Restores an insured person to the same financial state as before the loss.

In insurance policies contract ambiguities are automatically ruled in the favor of the insured. What privilege does the insurer have in order to balance this

The right to determine the wording of a policy