General insurance

Agent/Agency contract

A contract that is held between an insurer and an agent/producer, containing the expressed authority given to the agent/producer, outlining the duties and responsibilities to the principal

Agent/Producer

A person who acts for another person or entity with regard to contractual arrangements with third parties; A legal representative of an insurance company

Apparent

An agent accepts the premium payment 35 days after it is due, telling the insured that there will not be a problem keeping the policy in force. This is an example of what type of authority?

Conditions

Because an insurance policy is a legal contract, it must conform to the state laws governing contracts which require all of the following element EXCEPT

Speculative Risk

Involves the opportunity for either loss or gain.

Pure Risk

Situations that can only result in a loss or no change. There is no opportunity for Financial gain.

Avoidance

The risk management technique that is used to prevent a specific loss by not exposing yourself to that activity is called

Risk

The uncertainty or chance of a loss occurring.

Agent

According to the Law of Agency, a principal is represented by a/an

Certificate of Authority

In order for an insurer to legally transact insurance, it must obtain which of the following?

What type of risk are insurance companies willing to accept

Pure

Two Types of Risk

Pure Risk and Speculative Risk

The loss must be catastrophic

Which of the following is NOT a characteristic of pure risk?

What type of risk is gambling

Speculative

An authorized insurer

An insurer that holds a Certificate of Authority in the state in which it transacts business is considered

It is issued to a group insurance participants

Which of the following is not true regarding a Certificate of Authority?