L&H 2023

Which of the following does not have the responsibility of acting as a fiduciary? A beneficiary An insurer An agent A broker

A beneficiary

Although most insurers no longer use this marketing approach, lower-valued life insurance products, called 'industrial' life insurance, is still marketed through the home service system direct response system agency system social service system

home service system

Overstating promises, using inaccurate or misleading information and guaranteeing insurance are types of: misrepresentation churning rebating defamation

misrepresentation

Risk can be classified as any of the following EXCEPT: poor preferred standard substandard

poor

Express Authority includes all of the following EXCEPT: soliciting applications for insurance on behalf of the insurer educating the client about products and coverage remitting ongoing premium on behalf of the insured submitting an application for insurance on behalf of the insured

remitting ongoing premium on behalf of the insured

Which of the following professions analyzes and predicts potential loss in order to set and maintain premium pricing for an insurance company? Actuary Statistician Fiduciary Underwriter

Actuary

Which of the following is an example of sliding? An agent is requiring me to purchase long-term care insurance along with my life insurance policy. An agent is guaranteeing my eligibility for a new whole life insurance policy. An agent is suggesting that I cancel my current life insurance policy and purchase a new policy through my current life insurer. An agent is offering to pay the premium for the first two months of my policy if I purchase life insurance through him.

An agent is requiring me to purchase long-term care insurance along with my life insurance policy.

Which of the following is NOT a method of handling risk? Analyzing risk Retaining risk Transferring risk Avoiding risk

Analyzing risk

Making or circulating false or malicious information regarding an insurer is known as: Misrepresentation Nondisclosure Rebating Defamation

Defamation

A return of premium that is paid out by mutual insurance companies at the end of the year as a result of either positive operating costs or other investment returns is also known as a: Percentage refund Mutual refund Dividend Preferred discount

Dividend

Which type of insurance protects an agent and even pays claims if a lawsuit is brought against the agent as a result of failing to provide a service to a client? Agent Policy Protection Insurance Security Coverage Agent Guaranty Insurance Errors and Omissions Insurance

Errors and Omissions Insurance

All of the following are considered perils EXCEPT: Unsanitary conditions Accidents Falling from a tree while intoxicated Fires

Fires

All of the following are considered hazards EXCEPT: slippery floors filing a false claim improperly stored gasoline floods

Floods

An insurance company whose headquarters are located in California but conducts business in Georgia is what type of insurer? Alien Domestic Foreign National

Foreign

Collecting and submitting monthly premiums on an insured's behalf is considered what type of authority? Express Authority Implied Authority An agent does not have that authority Lingering Implied Authority

Implied Authority

Which of the following insurers is considered a participating company? Reinsurers Stock Mutual Service providers

Mutual

In addition to being a policyowner, Allison shares in her insurer's success and receives dividends from the company's annual profits. This is because she purchased an insurance policy through a ________ insurer, also referred to as a ________ company. Mutual / Par Mutual / Non-par Stock / Par Stock / Non-par

Mutual / Par

Which type of E&O policy provides permanent coverage for the actions of an agent during which time he or she was covered under such policy, regardless of when a lawsuit is filed against the agent? Occurrence policy Claims-made policy Extended Reporting policy Full Prior Acts policy

Occurrence policy

For purposes of insurance, which of the following is NOT considered a hazard? Moral Peril Morale Physical

Peril

Which of the following sets of fundamental principles is insurance based? Speculative risk and pure risk Pooling of risks and the law of large numbers Perils and hazards Law of large loss and risk

Pooling of risks and the law of large numbers

Patricia has good health, good habits and even good credit. If she were to apply for an insurance policy, which classification would she most likely be labeled? Substandard risk Standard risk Minimal risk Preferred risk

Preferred risk

The act of refunding part of the commission, premium, services or anything of value to the purchaser as an inducement to buy an insurance policy is known as: Up selling Twisting Churning Rebating

Rebating

Shifting a risk to another party, such as an insurance company in the case of an accident, is best known as: Risk reduction Risk avoidance Risk transference Risk retention

Risk transference

Which of the following is considered to be a 'morale' hazard? Smoking Running a red light while texting Dishonesty Credit card abuse

Running a red light while texting

Paula has applied for a life insurance policy and has been classified as a substandard risk for the insurer. What will most likely occur with her policy? Her policy will be denied The amount of insurance will be lowered She will have to provide evidence of insurability annually She will be charged an additional premium

She will be charged an additional premium

Insurance is not intended to protect against? The possibility of loss only Pure risk Speculative risk Premature death

Speculative risk

Which of the following insurers is best defined as a non-participating company? Service providers Reinsurers Mutual Stock

Stock

Which of the following entities manages the National Do-Not-Call Registry? The states and the FCC, but not the FTC The FTC The FCC The FTC, the FCC and the states

The FTC

All of the following are characteristics of pure risk EXCEPT The loss must be due to chance The loss must be predictable The loss must be speculative The loss must be measurable and definite

The loss must be speculative

What is the operating objective of a stock insurance company? To provide affordable insurance policies Create new policy protocols while remaining compliant with state regulation offices Attempt to provide dividends to its policyholders To make a profit for its stockholders

To make a profit for its stockholders

The practice of inducing a policyowner through misrepresentation to forfeit or change insurance from one company to another to gain commission for an agent or agency is called: Defamation Churning Twisting Rebating

Twisting

When an agent persuades a client to cancel his or her current coverage for a policy from an entirely different company solely to produce another first year commission is called? Churning Up selling Reselling Twisting

Twisting

Which of the following is NOT a type of speculative risk? Unemployment Gambling Stock performance Changes in the economy

Unemployment

All of the following are considered perils EXCEPT: Unsanitary conditions Accidents Falling from a tree while intoxicated Fires

Unsanitary conditions

Raymond, a licensed insurance producer, solicits insurance through more than one insurer and negotiates on behalf of his clients; therefore, he is considered to be a broker. a solicitor. an agent. an independent agent.

a broker.

XYZ Insurance Co. cannot accept the full risk of a $50,000,000 insurance policy; however, through _______, XYZ Insurance Co. can share such risk, thus allowing it to issue the insurance policy. a reinsurer a cedent insurer a reciprocal Lloyd's of London

a reinsurer

An agent's general responsibilities include all of the following EXCEPT disclosing to the insurer all applicant information, as well as any potential adverse risks that the applicant may disclose to the agent. delivering and explaining the policy to the newly insured, as well as to collect any initial premium due, if not already collected. approving and issuing, or declining, an application for insurance in a timely manner. submitting the initial premium from the applicant to the insurer.

approving and issuing, or declining, an application for insurance in a timely manner.