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Retention

a planned assumption of risk, or acceptance of responsibility for the loss by an insured through the use of deductibles, co payments, of self-insurance.

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

an Agent

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

an Authorized insurer

In any case where their is controversy or dispute between the insurance company and the insured, the soliciting agent is the agent of the...

compant

commingling

failing to segregate the premium monies from producers own personal funds.

What documentation grants express authority to an agent?

Agent's contract with the principal

When both parties to a contract must perform certain duties and follow rules of conduct to make the contract enforceable, the contract is...

Conditional

What is the unit of measurement an underwriter uses when determining the premium rates of insurance?

Exposure

The trust that a client places in the producer in regard to handling premiums is an example of what duty?

Fiduciary

The requirement that agents not commingle insurance monies with their own funds is known as...

Fiduciary responsibility

What insurance concept is associated with the names Weiss and Fitch?

Guides describing company financial integrity

What do individuals use to transfer their risk of loss to a larger group?

Insurance

When agents are acting within the scope of their contract, their actions will be assumed to be the acts of the...

Insurer

Is one of an insurance agent's responsibility to represent the client?

No, an agent's license authorizes the licensee to represent the insurer, not the client.

If a premium is paid by the policyholder to the agent and the agent fails to remit that premium to the insurer then will the policy lapse?

No, because a premium paid to an agent is the same as it being paid to the insurer.

What is the major difference between a stock and a mutual company?

Ownership

Who might receive dividends from a mutual insurer?

Policyholders

Which services are associated with Standard & Poor's and AM Best?

Rating the financial strength of insurance companies.

Installing deadbolt locks on the doors of a home is an example of which method of handling risk?

Reduction, taking steps to prevent losses from occurring are called risk reduction.

What is the only insurer owned by stockholders who have the usual rights of ownership, including the right to vote?

Stock

Peril

The cause of loss insured against

An insured whats to transfer his personal insurance policy to a friend. Under what conditions would this be possible?

The insured will need a written consent of the insurer.

Retention usually results from three basic desired of the insured...

To reduce expenses and improve cash flow to increase control of claim reserving and claims settlements, and to fund losses that cannot be insured.

When an individual purchases insurance what risk management technique is he or she practicing?

Transfer