General Insurance

In insurance, an offer is usually made when A An applicant submits an application to the insurer. B The insurer approves the application and receives the initial premium. C The agent hands the policy to the policyholder. D An agent explains a policy to a potential applicant.

A An applicant submits an application to the insurer

An applicant knowingly fails to communicate information that would help an underwriter make a sound decision regarding coverage. This is an example of A Concealment. B Waiver. C Fraud. D Breach of warranty.

A Concealment.

When an insured makes truthful statements on the application for insurance and pays the required premium, it is known as which of the following? A Consideration B Legal purpose C Contract of adhesion D Acceptance

A Consideration

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? A Reasonable expectations B Cease and desist C Nonforfeiture D Indemnity

A Reasonable expectations

Which of the following is NOT a goal of risk retention? A To minimize the insured's level of liability in the event of loss B To reduce expenses and improve cash flow C To increase control of claim reserving and claims settlements D To fund losses that cannot be insured

A To minimize the insured's level of liability in the event of loss

Because an agent is using stationery with the logo of an insurance company, applicants for insurance assume that the agent is authorized to transact on behalf of that insurer. What type of agent authority does this describe? A Assumed B Apparent C Express D Implied

B Apparent

An insurance contract must contain all of the following to be considered legally binding EXCEPT A Competent parties. B Beneficiary's consent. C Offer and acceptance. D Consideration.

B Beneficiary's consent.

A producer who fails to separate premium monies from his own personal funds is guilty of A Theft. B Commingling. C Larceny. D Embezzlement.

B Commingling.

To legally transact insurance in this state, an insurer must obtain which of the following? A Business entity license B Certificate of Insurance C Certificate of Authority D Power of Attorney

C Certificate of Authority

A situation in which a person can only lose or have no change represents A Adverse selection. B Hazard. C Pure risk. D Speculative risk.

C Pure risk.

Which of the following insurers are owned by stockholders? A Reciprocal B Fraternal C Stock D Mutual

C Stock

Which of the following is NOT a characteristic of an insurable risk? A The loss must be measurable. B The loss exposure must be large. C The loss must be catastrophic. D The loss must be due to chance.

C The loss must be catastrophic.

Which of the following is another term for an authorized insurer? A Certified B Licensed C Legal D Admitted

D Admitted

Pertaining to insurance, which of the following is an example of a producer's fiduciary responsibility? A Helping insureds to file claims B Performing reviews of insured's coverage C Offering additional coverage to insureds D Promptly forwarding premiums to the insurance company

D Promptly forwarding premiums to the insurance company

Which of the following is the most common way to transfer risk? A Increase control of claims B Lessen the possibility of loss C Name a beneficiary D Purchase insurance

D Purchase insurance

In terms of parties to a contract, which of the following does NOT describe a competent party? A The person must not be under the influence of drugs or alcohol. B The person must be of legal age. C The person must be mentally competent to understand the contract. D The person must have at least completed secondary education.

D The person must have at least completed secondary education

Which of the following is a statement that is guaranteed to be true, and if untrue, may breach an insurance contract? A Concealment B Indemnity C Representation D Warranty

D Warranty

An insurance company is domiciled in Montana and transacts insurance in Wyoming. Which term best describes the insurer's classification in Wyoming?

Foreign