General Insurance
"Perceived Authority"
Apparent
An insurance organization that does not issue insurance policies but provides a meeting place for underwriters to conduct business is known as a
Lloyd's Association
The risk of loss may be classified as
Pure risk and speculative risk
What documentation grants express authority to an agent?
Agent's contract with the principal
The authority granted to an agent through the agent's contract is referred to as
Express Authority
The authority granted to an agent through the agent's contract is referred to as
Express authority
For the reported losses of an insured group to become more likely to equal the statistical probability of loss for that particular class, the insured group must become
Larger
The causes of loss insured against in an insurance policy are known as
Perils
Which of the following insurers are owned by stockholders?
Stock
Which of the following would qualify as a competent party in an insurance contract?
The applicant has a prior felony conviction
In terms of parties to a contract, which of the following does NOT describe a competent party?
The person must have at least completed secondary education.
In insurance policies, contract ambiguities are automatically ruled in the favor of the insured. What privilege does the insurer have in order to balance this?
The right to determine the wording of a policy
Events or conditions that increase the chances of an insured loss occurring are referred to as
Hazards
Not all losses are insurable, and there are certain requirements that must be met before a risk is a proper subject for insurance. These requirements include all of the following EXCEPT
The loss may be intentional
Which of the following is NOT a characteristic of an insurable risk?
The loss must be catastrophic
Which of the following types of agent authority is also called "perceived authority"?
Apparent
Which law is the foundation of the statistical prediction of loss upon which rates for insurance are calculated?
Law of large numbers
Which of the following produces evaluations of insurers' financial status often used by state departments of insurance?
AM Best
In insurance, an offer is usually made when
An applicant submits an application to the insurer
What is a foreign insurer?
An insurer with a home office in another state.
An applicant knowingly fails to communicate information that would help an underwriter make a sound decision regarding coverage. This is an example of
Concealment
When an insured makes truthful statements on the application for insurance and pays the required premium, it is known as which of the following?
Consideration
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
What insurance concept is associated with the names Weiss and Fitch?
Guides describing company financial integrity
Which of the following statements is an accurate comparison between private and government insurers?
Private insurers may be authorized to transact insurance by state insurance departments
What method do insurers use to protect themselves against catastrophic losses?
Reinsurance
Which authority is NOT stated in an agent's contract but is required for the agent to conduct business?
Implied
When an individual purchases insurance, what risk management technique is he or she practicing?
Transfer