Legal concepts
What happens when an initial offer is answered with a counteroffer?
Initial offer is void
In what way are insurance policies said to be aleatory?
Involves the potential for the unequal exchange of value
An agent whose actions exceed the authority granted by contract is
Not backed by the insurer
Which element of a contract constitutes a define and unqualified proposal by one party to another?
Offer
All of these statements correctly describe an aleatory contract except
Only one party makes any kind of legally enforceable offer
What is the insurer responsible for when a producer is acting within the scope of authority granted in the agency contract?
Responsible for acts by the producer that are authority only
Which of the following would not have a restricted ability to enter into a contract?
Small employer
When a producer acts within the scope of his/her contractual authority, which of the following is legally responsible for these actions?
The insurer
During the application process, a statement made by an applicant that becomes part of the contract is considered to be a
Warranty
Use of XYZ Insurance Company brochures, business cards, and rating guides is an example of
apparent authority
An agreement is reached when an insurance contract is formed. Which of the following is NOT considered to be an element of an agreement?
equity
XYZ Insurance Company gives direct authority to its producers to sell insurance through an agency contract, but nothing is stated regarding the collection of premiums. Which authority grants the producer the right to collect premiums?
implied authority
Under the law of agency, the principal is considered to be
insurer
Statements made by an insured on an accident and health insurance application are considered to be
representations
An insurance company can be liable for a producers unauthorized acts
when the agency contract is unclear concerning the authority given