Field Underwriting

An applicant gives her agent a completed application and the initial premium. What can the agent issue her that acknowledges the initial premium payment? 1) Advanced Premium Receipt 2) Conditional Receipt 3) Premium Receipt 4) Provisional Receipt

Conditional Receipt

What are representations in an insurance application? 1) Immaterial to the actual acceptability of the insurance contract 2) Considered true to the best of the applicant's knowledge 3) Guaranteed to be true 4) Found to be false after further investigation

Considered true to the best of the applicant's knowledge

What type of report includes information regarding a person's credit, character, reputation and habits? 1) MIB report 2) Agent's report 3) Consumer report 4) Fair Credit Report

Consumer report

In an insurance contract, what does consideration refer to? 1) A legal capacity 2) Abiding by the laws of ethics 3) An act by one party in exchange for a promise by the other 4) Exchange of something of value by both parties

Exchange of something of value by both parties

Which of the following parties may NOT have an insurable interest in the insured? 1) Insured's best friend 2) The spouse 3) The employer 4) Insured's children

Insured's best friend

If an insured submits the full premium along with a completed application, and the policy is issued 10 days later, when does the coverage begin? 1) On the date the policy is issued 2) When the policy is received 3) After the free-look period 4) On the date of the application

On the date of the application

Which statement best describes "agreement" as it relates to insurance contracts? 1) The intent of the contract must be legally acceptable to both parties 2) Each party must offer something of value 3) One party accepts the terms of the other party's offer 4) All parties must be capable of entering

One party accepts the terms of the other party's offer

Health contracts are unilateral in nature. What does that mean? 1) Only one party makes a promise 2) All parties to the contract exchange something of value 3) A promise is made only at the time of policy application 4) The insured must make a promise of paying the premium

Only one party makes a promise

Which of the following is consideration on the part of an insurer? 1) Underwriting 2) Decreasing premium amounts 3) Paying the claim 4) Paying the premium

Paying the claim

If no receipt is provided at the time of application, when is a statement of good health typically required? 1) Policy renewal 2) Application 3) Policy delivery 4) The paramedic's report

Policy delivery

Insured A has had migraine headaches for the past year and wants to purchase a different policy with a lower premium. The application asks the insured to disclose recent health history. The migraine headaches may not be covered on the replacing policy because they would be labeled as which of the following? 1) Waiver 2) Probationary disease 3) Dread disease 4) Pre-existing condition

Pre-existing condition

Which of the following statements concerning the Medical Information Bureau is correct? 1) The Medical Information Bureau (MIB) assists underwriters in evaluating and classifying risks 2) The MIB report must be attached to each life insurance policy issued 3) All applicants for life insurance receive a copy of the findings of life insurance medical examination 4) Information contained in the MIB report is available to all physicians

The Medical Information Bureau (MIB) assists underwriters in evaluating and classifying risks

If an applicant submits the initial premium with an application, which action constitutes acceptance? 1) The insurance company receives the application and initial premium 2) The underwriters approve the application 3) The applicant submits a statement of good health 4) The producer delivers the policy

The underwriters approve the application

What happens to an insurance application after the policy is issued? 1) it is kept on file in the principal office of the insurer 2) it becomes part of the contract 3) It is forwarded to the state government for 10 years 4) it is discarded

it becomes part of the contract

What is the primary purpose of the USA PATRIOT ACT in relation to in insurance industry? 1) To protect insurance companies from insurance fraud 2) To protect the public from internal and external terror threats 3) To provide insurance to military service men and women and their dependents 4) To prevent terrorism activities through monitoring of financial transactions

To prevent terrorism activities through monitoring of financial transactions

Which method of dealing with risk is applied when insurance is purchased? 1) Transfer 2) Sharing 3) Reduction 4) Avoidance

Transfer

Applicants have the right to know that the insurance company will collect certain personal information about their credit, character, and reputation. The insurer may obtain such information from 1) A pretext interview 2) An application for insurance 3) A consumer report 4) A privacy note

A consumer report

Over several years, a policyowner paid $10,000 in premiums for their insurance policy. When a loss occurred, the insurance company paid out $50,000 in benefits. What characteristic of an insurance contract does this situation demonstrate? 1) Aleatory 2) Conditional 3) Unilateral 4) Adhesion

Aleatory

Which of the following is a role of a field underwriter? 1) An insurer 2) An agent 3) An adjuster 4) A company underwriter

An agent

Answers to questions in an insurance application are called representations and, as such, they are 1) Not true 2) Believed to be true to the best of the applicant's knowledge 3) Warranties 4) Absolutely true

Believed to be true to the best of the applicant's knowledge

According to the Fair Credit Reporting Act, all of the following statements are true EXCEPT 1) It ensures that consumer reporting agencies are fair in their treatment of consumers 2) It protects consumers against the circulation of inaccurate information 3) If an applicant is declined for an insurance policy, he/she has no right to know what was in the report 4) Investigative consumer reports can be used to obtain information on the applicant's character and reputation

If an applicant is declined for an insurance policy, he/she has no right to know what was in the report

For a contract to be enforceable by law, its purpose must be 1) For financial gain 2) For the benefit of the general public 3) Legal and not against public policy 4) Notarized

Legal and not against public policy

The purpose of the Fair Credit Reporting Act is to 1) Ensure coverage for all applicants 2) Ensure consumers receive a copy of investigative consumer reports 3) Protect consumers against the circulation of inaccurate of absolete information 4) Protect the insurer from adverse selection

Protect consumers against the circulation of inaccurate or absolete information

For applicants of higher amounts of coverage, or if the application raised additional questions concerning the prospective applicant's health, the underwriter may require all of the following for additional information except for: 1) Paramedical report 2) Attending Physician's report 3) Recent prescription usage 4) Medical examination

Recent prescription usage

When may HIV-related test results be provided to the MIB? 1) Under all circumstances 2) Only when the test results are negative 3) Only if the individual is not identified 4) When given authorization by the patient

When given authorization by the patient

What does the application of "Contract of Adhesion" mean? 1) Since the insured does not participate in preparing the contract, any ambiguities would be resolved in favor of the insured 2) The holder of the contract has the ultimate power of promise 3) It makes sure that the insured does not get more than the value of the loss 4) The insurer may go to another for representation

Since the insured does not participate in preparing the contract, any ambiguities would be resolved in favor of the insured