LAH - General Insurance (1)

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What documentation grants express authority to an agent?

Agent's contract with the principal

If an insurer meets the state's financial requirements and is approved to transact business in the state, it is considered to be...

Authorized

An insurance contract must contain all of the following to be considered legally binding EXCEPT... Competent parties, beneficiary's consent, offer and acceptance, consideration

Beneficiary's consent

Which of the following must an insurer obtain in order to transact insurance within a given state... Certificate of authority, producer's certificate, business entity license, insurer's license

Certificate of authority

An applicant knowingly fails to communicate information that would help an underwriter make a sound decision regarding coverage. This is an example of... Fraud, breach of warranty, concealment, waiver

Concealment

Because an insurance policy is a legal contract, it must conform to the state laws governing contracts which require all of the following except... legal purpose, offer and acceptance, conditions, consideration

Conditions

Something of value exchanged between the insurer and the insured is considered an...

Consideration

Which of the following best describes an insurance company that has been formed under the laws of this state... Alien, foreign, domestic, sovereign

Domestic

Which of the following is considered to be a morale hazard? Driving recklessly, smoking,working as a firefighter, engaging in illegal activities

Driving recklessly

The authority granted to an agent through the agent's contract is referred to as...

Express authority

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

If it is intentional and material

Which statement regarding insurable risks is NOT correct? A: The insurable risk needs to be statistically predictable B: An insurable risk must involve a loss that is definite as to cause, time, place and amount C: Insureds cannot be randomly selected D: Insurance cannot be mandatory

Insured cannot be randomly selected

Insurance is a contract by which one seeks to protect another from...

Loss

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

Ownership

Which of the following is the most common way to transfer risk? Purchase insurance, increase control of claims, lessen the possibility of loss, name a beneficiary

Purchase insurance

Which of the following insurance options would be considered a risk-sharing arrangement? Stock, mutual, surplus lines, reciprocal

Reciprocal


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