Chapter 1

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insurance companies may be classified according to the legal form of their ownership. The type of company organized to return any surplus of money to their policy holder

A mutual insurer

A tornado that destroys property would be an example of which of the following?

A peril

Which of the following must an insurer obtain in order to transact insurance within a given state?

Certification of Authority

The authority granted to an agent through the agent's contract is referred to as

Express authority

What insurance concept is associated with names Weiss and Fitch

Guides describing financial integrity

Who might receive dividends from a mutual insurer?

Policy holder

Which of the following types of agent authority is also called "perceived authority" ?

Apparent

Which of the following is the most common way to transfer risk?

Purchase insurance

Which of the following insurance options would be considered a risk-sharing arrangement?

Reciprocal

Which type of insurance is based on mutual agreement among subscribers?

Reciprocal Insurance

Which type of insurance is based on a mutual agreements among subscribers?

Reciprocal insurance

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

Something of value exchanged between the insurer and the insured is considered an

consideration

The insurer must be able to rely on the statements in the application, and the insured must be able to rely on the insurer to pay valid claims. In forming of an insurance contact, this is referred to as

Utmost good faith

What do individuals use to transfer their risk of loss to a larger group?

insurance

An insurer has made all of the decisions regarding the provisions included in the insured's policy. The insured finds an objectionable provision and wants to negotiate it with the insurer but not allowed to do so. Her only options are to reject the policy or accept it as it is. Which contract is described.

Adhesion


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