General Insurance Quiz

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

Apparent

Which of the following best describes rescission?

An insurer cancels a policy after it has been issued and refunds all paid premiums.

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

Which of the following factors is NOT considered by an underwriter when determining the premium rates for an individual seeking insurance?

Race

What method do insurers use to protect themselves against catastrophic losses?

Reinsurance

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.

The authority granted to an agent through the agent's contract is referred to as

Express authority.

Which of the following insurers are owned by stockholders who have the usual rights of ownership, including the right of voting?

Stock

Which of the following is an example of a producer's fiduciary duty?

The trust that a client places in the producer in regard to handling premiums.

Courts will interpret any ambiguity in an insurance contract

In favor of the Insured

In Insurance, an offer is usually made when

The completed application is submitted

For the purpose of insurance, risk is defined as

The uncertainty or chance of loss.

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?

Fraternal benefit society

An agent sells insurance over the phone. One of his applicants is heavily drunk when she applies for and then almost instantly receives her policy. Which of the following is true?

The policy is not legal if it can be proven that the applicant was drunk during the application process.

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?

Reduction