General Insurance
Considered true to the best of the applicant's knowledge
Representations are written or oral statements made by the applicant that are
Express authority
The authority granted to an agent through the agent's contract is referred to as
A statement by the applicant that, upon discovery, would affect the underwriting decision of the insurance company
What is a material misrepresentation?
Concealment
What term best describes the act of withholding material information that would be crucial to an underwriting decision?
Implied
Which authority is NOT stated in an agent's contract but is required for the agent to conduct business?
aleatory
Which of the following best describes the concept that the insured pays a small amount of premium for a large amount of risk on the part of the insurance company?
Fraternal benefit society
Which of the following entities is not an insurer but an organization formed to provide insurance benefits for members of an affiliated lodge or religious organization?
The loss must be catastrophic
Which of the following is NOT a characteristic of an insurable risk?
To minimize the insured's level of liability in the event of loss
Which of the following is NOT a goal of risk retention?
It is issued to group insurance participants.
Which of the following is NOT true regarding a Certificate of Authority?
Certificate of authority
Which of the following must an insurer obtain in order to transact insurance within a given state?
Private insurers may be authorized to transact insurance by state insurance departments.
Which of the following statements is an accurate comparison between private and government insurers?
apparent
Which of the following types of agent authority is also called "perceived authority"?
Premiums
All of the following are examples of risk retention EXCEPT
Avoidance
An individual was involved in a 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?
Conditional
An insurance contract requires that both the insured and the insurer meet certain conditions in order for the contract to be enforceable. What contract characteristic does this describe?
Captive agent
An insurance producer who by contract is bound to write insurance for only one company is classified as a/an
Contracts of Adhesion
Contracts that are prepared by one party and submitted to the other party on a take-it-or-leave-it basis are classified as
reduction
Following a career change, an insured is no longer required to perform many physical activities, so he has implemented a program where he walks and jogs for 45 minutes each morning. The insured has also eliminated most fatty foods from his diet. Which method of dealing with risk does this scenario describe?
unilateral
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 element does this describe?
The loss may be intentional.
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 cause of loss insured against
Peril is most easily defined as