Lesson 2- Exam

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

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. -Submitting the initial premium from the applicant to the insurer. -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.

Defamation

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

Twisting

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 -Rebating -Twisting -Churning

Twisting Solution: -Twisting is the practice of inducing a policyowner through misrepresentation to forfeit or change insurance from one company to another in order to gain commission for an agent or agency.

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? -Up selling -Churning -Reselling -Twisting

Beneficiary

Which of the following does not have the responsibility of acting as a fiduciary? -Broker -Agent -Beneficiary -Insurer

The FTC Solution: -Although the FTC, the FCC and the states enforce it, the Do-Not-Call Registry is managed by the FTC.

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

Misrepresentation Solution: -Misrepresentation is illegal and grounds for license revocation.

Overstating promises, using inaccurate or misleading information and guaranteeing insurance are types of: -Misrepresentation -Rebating -Defamation -Churning

Broker

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: -Broker -Independent Agent -Solicitor -Agent

Implied Authority Solution: -Since the company does not authorize the agent to collect and remit ongoing premium, the company views the agent as working on the client's behalf. If the agent were not to remit this premium to the company, the agent, not the company, would be liable for the lost premium payment.

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

remitting ongoing premium on behalf of the insured

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