General insurance

Which of the following is not the consideration in a policy?

The promise to pay covered losses B- The application given to a prospective insured Something of value exchange between parties The premium amount paid at the time of application

Insurance is the transfer of

Risk

A producer who fails to separate premium monies from his own personal funds is guilty of

Commingling.

Contracts that are prepared by one party and submitted to the other party on a take-it-or-leave-it basis are classified as

Contracts of adhesion.

A person who does not lock the doors or does not repair leaks shows an indifferent attitude. This person presents what type of hazard?

Morale

What is reinsurance?

An agreement between a ceding insurer an assuming insurer

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

Apparent

An individual was involved in head on collision while driving home one day. His injuries were not serious, and he recovered. However, he decided that in order to never be involved in another accident, he would not drive or ride in a car ever again. Which method of risk management does this describe?

Avoidance

Which of the following is issued by the state Department of Insurance to show that the insurer has power to write insurance contracts in that state?

Certificate of Authority

An insurance company is domiciled in Montana and transacts insurance in Wyoming. Which term best describes the insurer's classification in Wyoming?

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?

Foreign

All of the following actions by a person could be described as risk avoidance EXCEPT

Investing in the stock market.

Which of the following is NOT a goal of risk retention?

To fund losses that cannot be insured B - To minimize the insured's level of liability in the event of loss To reduce expenses and improve cash flow To increase control of claim reserving and claims settlements

In insurance policies, the insured is not legally bound to any particular action in the insurance contract, but the insurer is legally obligated to pay losses covered by the policy. What contract elements does this describe?

Unilateral

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

Utmost good faith

Waiver

Voluntary giving up one's knows right or privilege

An insurance company receives an application with some information missing and issues the policy anyway. What is this called?

Waiver

reinsurance (assuming insurer)

A form of insurance whereby one insurance company (the reinsurer) in consideration of a premium pay to it agrees to an indemnify another insurance company (the ceding) company for a part or all of its liabilities from an insurance policy it has issued

Apparent authority

also known as perceived authority is the appearance or the assumption of authority based on the actions, words, or deeds of the principal or because of circumstances the principal created.

Because an agent is using stationery with the logo of an insurance company, applicants for insurance assume that the agent is authorized to transact on behalf of that insurer. What type of agent authority does this deścribe?

Apparent