General Insurance

Insurance policies are not drawn up through negotiations, and an insured has little to say about its provisions. What contract characteristic does this describe?

Adhesion

Which of the following must an insurer obtain in order to transact insurance within a given state?

Certificate of authority

An insurance contract requires that both the insured and the insurer meet certain conditions in order for the contract to be enforceable. What contract characteristic does this describe?

Conditional

In what way can an agent demonstrate a high standard of ethics?

Putting the client's best interests before their own

What documentation grants express authority to be an agent?

Agent's contract with the principal

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

Conditions

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

Fiduciary responsibility

In insurance transactions, fiduciary responsibility means

Handling insurer funds in a trust capacity

When would be a misrepresentation on the insurance application be considered fraud?

If it is intentional and material

Which authority is NOT stated in an agent's contract but is required for the agent to conduct business?

Implied

An insured purchased an insurance policy 5 years ago. Last year, she received a dividend check from the insurance company that was not taxable. This year, she did not receive a check from the insurer. From what type of insurer did the insured purchase the policy?

Mutual

A nonadmitted insurer who provides insurance coverages that are not available from an admitted insurer is called

Surplus lines insurer

An individual was involved in a head-on collision while driving home one day. His injuries were not serious, and he recovered. However, he decided that in order to never be involved in another accident, he would not drive or ride in a car ever again. Which method of risk management does this describe?

avoidance

Which of the following are the authorities that an agent can hold?

express and implied

If a court ordered payment for a loss that was not covered in the policy even if it was clearly worded, it would be an example of which legal concept?

reasonable expectations