Chapter One

In an insurance contract, consideration refers to...

Exchange of something of value between both parties

What law requires and insurance company to notify an applicant in writing that an investigative consumer report may be initiated?

Fair credit report act

Representations are statements made by an applicant that are...

Guaranteed to be true

If the agent feels there could be misrepresentation on the part of the applicant for insurance, what must the agent do?

Inform the insurance company

This document provides information about an applicants mode of living, finances and exposure to abnormal habits...

Inspection teport

The medical information bureau is...

Main source of medical information to alert insurers to adverse medical history

What qualifies as a suspicious transaction and would require the filing of an SAR?

Multiple wire transfers from the account in the amount of $5,000

An insured submits the full premium along with a completed application, and the policy is issued 10 days later. When does the coverage begin?

On the date of the application

If a medical report is required during underwriting process, who must complete the report?

Paramedics or physicians

If no receipt is issued at the time of application, a statement of good health is usually required at the time of...

Policy delivery

If an agent fails to obtain an applicant's signature on the insurance application, the agent must...

Return the application to the applicant for signature

What is the main responsibility of a company's underwriting unit?

Risk selection and classification

Who doesn't sign a life insurance policy?

The beneficiary

Best description of the USA PATRIOT act with regards to the insurance industry...

To prevent terrorism activities through monitoring of financial transactions

What guarantees that the information explained in the insurance contract is true?

A warranty

This part of the application provides information about an applicants financial condition and character, as well as the purpose of the sale and how long the agent has known the applicant...

Agents report

Over several years, a policy owner paid $10,000 in premiums for his insurance policy. When he suffered a loss, the insurance company paid out $50,000 in benefits. What characteristic of an insurance contract does this describe?

Aleatory

Which of the following is considered a field underwriter?

An agent

What term is used for a person who seeks insurance coverage from an insurer?

Applicant

Which would be the main source of underwriting information used by the company in the risk selection process?

Application

When must insurable interest exist?

Application date

An insurer that automatically gives coverage upon receipt of an application and the premium has given what to the applicant?

Conditional receipt

What report includes information regarding a persons credit, character, reputation and habit?

Consumer report

When may a statement of good health be required?

When no premium is paid with application