Chapter 1
The authority granted to an agent through the agent's contract is referred to as
Express Authority
The requirement that agents not commingle insurance monies with their own funds is known as
Fiduciary responsibility
An insurer neglects to pay a legitimate claim that is covered under the terms of the policy. What has the insurer violated?
Consideration
Which of the following is NOT the consideration in a policy?
The application given to a prospective insured
What company produces evaluations of insurer financial status often used by the insurance department
AM Best and Company
Objectionable provision on policy but not allowed to negotiate. Either reject policy or accept as is. Which contract feature does this describe?
Adhesion
Accepting a premium after the end of a grace period
Apparent authority
In insurance transactions, fiduciary responsibility means
Handling insurer funds in a trust capacity
Events or conditions that increase the chances of an insured loss occurring are referred to as
Hazards
Which authority is NOT stated in an agents contract but is required for the age to conduct business.
Implied
Which of the following is NOT consideration on the part of an insured?
Promise to submit timely claims
A situation in which a person can only lose or have no chance represents
Pure risk
Lifestyle changes that reduce the chance of health problems is known as
Reduction
Which of the following insurers are owned by stockholders who have the usual rights of ownership, including the right of voting?
Stock
In an insurance policy, the insured is not legally bound to any action, but the insurer is legally obligated to pay loss coverage. What element does this describe?
Unilateral
Describes the concept that insured pays a small amount of premium for a large amount of risk on the part of the insurance company
an Aleatory contract
In insurance the offer is usually made when
the application is submitted
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
All the following are examples of risk retention Except
premiums