General California Insurance Law
The materiality of a given concealment
The importance of a misrepresentation is determined by
Reinsurance
What method do insurers use to protect themselves against catastrophic losses?
Concealment
When applying for an individual life insurance policy, an applicant states that he went to the doctor for nausea, but fails to mention that he was also having severe chest pains. What is this act called?
Certificate of Authority
A France-based insurer would like to do business in California. What document must it first receive?
Mandatory
According to California Insurance Code, the term "Shall" describes what kind of actions.
To delegate the power to approve a settlement
According to the California Insurance Code, all of the following are general powers and duties of the Commissioner of Insurance EXCEPT
Misdemeanor, a fine not to exceed $25,000, and/or a possible 1-year imprisonment
According to the California Insurance Code, any agent violating the regulations relating to misrepresentation will be charged with a
Must be in writing, signed by an officer of the insurer, and may be mailed to the insured's last know address.
After an insurance contract has been delivered to an insured who is under 60 years of age, if any changes to the coverage are being made, a notice of the changes
Concealment
An applicant knowingly fails to communicate information that would help an underwriter make a sound decision regarding coverage. This is an example of
Has a contract with one company
An exclusive agent
Foreign
An insurance company is domiciled in Montana and transacts insurance in Wyoming. Which term best describes the insurer's classification in Wyoming?
Neglect on the part of insured to communicate all information known to be material to the insurer
Concealment as defined by the California Insurance Code is
Express warranty
Factual statements about the insured or he risk in an insurance policy are considered
Express warranty
Factual statements about the insured or the risk in an insurance policy are considered.
The company will forward all necessary correspondence within 60 business days from the date a request is received.
If any individual submits a written request to an insurance company requesting access to his/her own recorded personal information, all of the following requirements are true EXCEPT
Risk
Insurance is the transfer of
A written instrument in which a contract of insurance is set forth
Insurance policy is
A written instrument in which a contract of insurance is set forth.
Insurance policy is
As of the date that the notice of appointment is signed
The agent's authority to transact insurance business for an insurer is effective
Both the insurer and the insured to rescind
The violation of a material warranty or other material provision of a policy allows
It is a misdemeanor punishable by a fine of $1,000, one year imprisonment, or both
What are the consequences of a failure to comply with the Commissioner's office while it is executing a seizure order?
24 hours every 2 years
What are the continuing education requirements for line-only agents in California?
Certificate of Authority
What certification must an insurer receive before it can transact insurance in California?
Rescission of the policy
What is an injured party entitled to receive if an intentional concealment is discovered?
Prior to the issuance of the policy
When may a representation be withdrawn?
Policies have numerous exclusions to limit or avoid fraudulent claims.
Which of the following is NOT a typical characteristic of errors & omissions policy?
Considered true to the best of the applicant's knowledge
Representations are written or oral statements made by the applicant that are
Are considered true to the best of the applicant's knowledge.
Representations are written or oral statements made by the applicant which
Implied warranties
Representations in insurance contracts qualify as
A statement by the applicant that, upon discovery, would affect the underwriting decision of the insurance company
What is a material misrepresentation?
Direct-response
What is the term for a sales campaign conducted through the mail?
Protect agents against charges that they didn't properly serve a client
Which is the purpose of errors and omissions insurance?
Policies have numerous exclusions to limit or avoid fraudulent claims
Which of the following is NOT a typical characteristic of an ERRORS & OMISSIONS policy?
Oral statements cannot be considered fraud.
Which of the following is NOT correct regarding false statements by a person engaged in the business of insurance?
A solicitor may act as an insurance agent at the same time
Which of the following statements is NOT true regarding an insurance solicitor in California?
Title insurance
Which type of insurance guarantees or indemnifies owners of real or personal property or the holders of liens or other interested parties against loss or damage suffered to said property?
Twisting
Which type of misrepresentation persuades an insured, to his or her detriment, to cancel, lapse, or switch policies from one to another?
Applicants meet all prerequisites for their selected license
the commissioner has the right and responsibility to investigate all applications for licensure to assure that
Insurance
A contract which one party undertakes to indemnify another against loss is called
Concealment
A life insurance application is asking if he applicant has applied for any other life insurance within the past 6 months. The applicant states that he applied for $15,000 coverage from XYZ Co, but fails to mention the $150,000 coverage with DEF Co. The applicant is guilty of
a fine up to $25,000
A person caught violating provisions regarding misrepresentation could be subject to
"For you protection, California Law requires the following to appear on this form."
According to the California Law, if an insurer includes a fraudulent claim clause in the contract regarding the legal ramifications of a false claim, the clause must be preceded by which of the following statements?
Misdemeanor
Acting as an agent for a nonadmitted insurer (unless a surplus line broker) is considered a/an
Fraudulent claims by insureds
All insurers doing business in California must maintain a department to investigate possible
Perjury
An insured who signs a fraudulent claim form may be guilty of
Can void a contract
If found material for underwriting, a misrepresentation
Fraud
Al tells a client that she is guaranteed to be approved for LTC insurance if she pays the full year's premium at the time of application. The client applies for LTC insurance and writes a check for the annual premium to Al's agency. Al issues a Binder of Insurance but does not send the application to the insurer, and intentionally sees the premium for personal expenses instead. Al is guilty of
An insured loses a large sum in a poker game
All of the following are insurable events as defined in the insurance Code EXCEPT
The amount of paid claims exceeds the premiums paid.
All of the following are reason an insurer or an insured would have the right to rescind a policy EXCEPT
They may be altered or withdrawn after the issuance of the policy
All of the following are true regarding representations EXCEPT
Information the other party already knows
All of the following information must be communicated in an insurance contract EXCEPT
Life solicitors
All of the following may recommend life insurance contracts for their prospects, clients, and proposed insureds EXCEPT
The financial rating of the insurer
All of the following must be specified in an insurance policy EXCEPT
A company that reinsurers outstanding risks
All of the following would be considered insolvent insurers EXCEPT
There are no grounds for which license could be denied based on the information provided.
An applicant has submitted an application for a Life agent license in the state of California. Five years ago, the applicant was charged with, but not convicted of, a felony in another state. The California Commissioner could deny the license on the grounds that the applicant..
Material misrepresentation
An insured stated on her application for life insurance hat she had never had a heart attack, when in fact she had a series of minor heart attacks last year for which she sought medical attention. Which of the following will explain the reason a death benefit claim is denied?
Maryland
An insurer incorporation in which of the following location would be considered a foreign insurer in Washington D.C?
Authorized insurer
An insurer that holds a Certificate of Authority in the state in which it transacts business is considered a/an
$150,000
Anyone convicted of committing an insurance fraud may be fined up to the greater amount of double the value of the fraud or
An insurer that holds a Certificate of Authority in the state in which it transacts business is considered a/an
Authorized insurer
She can terminate the license by sending the Commissioner a written notice
If a licensee wants to terminate her agent's license but it is in the possession of her employer, which of the following is true?
The insurer may rescind the contract
If an insured intentionally failed to communicate information related to an implied warranty, which of the following may occur?
The owner
In a life settlement contract, whom does the life settlement broker represent
3 years
In addition to penalties, fines, and possible imprisonment for violating the provision relating to misrepresentation, the Commissioner may suspend the license of such person for a period up to
Influence this information would have in forming an estimate of he advantages or the disadvantages of the contract
In determining how material a piece of information is to each party of a contract, the value is not determined by the event itself, but solely by which of the following?
California Insurance Code
In order to become an admitted, authorized insurer, what is the primary body of law about which an applicant company must be concerned?
A mutual insurer
Insurance companies may be classified according to the legal form of their ownership. The types of company organized to return any surplus money to their policyholders is
Fraud
Intentionally misrepresenting or concealing a material fact to induce an insurance company to make a contract is known as
$10,000
Obtaining information under false pretenses is a violation. What would be the maximum fine for any agent found guilty?
An oral representation by the applicant
Which of the following would qualify as an implied warranty in an insurance contract?
Legal Insurance
Which type of insurance includes the assumption of a contractual obligation to reimburse the insured against all or a portion of his fees, costs, and expenses related to or arising out of services performed by or under the supervision of an attorney who is an active member of the bar of any jurisdiction or jurisdictions of he United Sates.
Industrial life insurance
Which type of life insurance is usually written for small amounts and requires frequent premiums that are collected by the agent?
Concealment
an insured intentionally did not disclose a material fact on an application for insurance. This would be considered
Contained in and referred to in the policy or other document and signed by the insured
Every expressed warranty made at or before the execution of a policy must be
Contained in and referred to in the policy or other document and signed by the insured.
Every expressed warranty made at or before the execution of a policy must be
Expressed warranty
Factual statements about the insured or the risk in an insurance policy are considered..
Industrial Life Insurance
Home service insurance is a variation of which type of life policies?
5 years
The Commissioner may suspend an applicant's license without a hearing of the applicant has had another professional license suspended or revoke within what time period?
Protect private customer information filed with a financial institution.
The Gramm-Leach-Bililey Act was passed to
As of the date the notice of appointment is signed by the insurer.
The authority to transact disability insurance given by an insurer to a person acting as an agent by appointment shall be effective
The materiality a given concealment
The importance of a misrepresentation is determined by
The Department of Insurance
Under the prior approval plan, insurers file proposed policy rate information with
Foreign
When doing business in this state an insurance company that is formed under the laws of another state is known as which type of insurer?
Alien insurer
When transacting business in this state an insurer formed under the laws of another country is known as a/an
If it is intentional and material
When would a misrepresentation on the insurance application be considered fraud?
A statement intended to distract, mislead, or deceive a party to a contract.
Which of the following best describes a misrepresentation?
Domestic
Which of the following best describes an insurance company that has been formed under the laws of this state?
They are written for the clients of the producer covered by the policy.
Which of the following does NOT apply to Errors and Omissions liability contracts?
Stock
Which of the following insurers are owned by stockholders who have the usual rights of ownership, including the right of voting?
A family
Which of the following is NOT a "person" for legal purposes?
Life broker
Which of the following is NOT a license in the state of California?
Admitted
Which of the following is the closest term to an "authorized" insurer?
Certificate of Authority
Which of the following must an insurer obtain in order to transact insurance within a given state?
Errors and omissions
Which of the following provisions requires an insurer to document all correspondence with an insurer?
De-mutualization
Which of the following terms is associated with a mutual insurer becoming a stock insurer
A sign in an insurer's office
Which of the following would NOT be considered a form of direct response marketing?
A corporation that negotiates ceding reinsurance contracts on behalf of an insurer
Which of the following would be considered a managing general agent?
