Chapter 1- Application, Underwriting, and Delivering Policy

Events in which a person has both the chance of winning or losing are classified as a. retained risk b. speculative risk c. pure risk d. hazard

b. speculative risk

Courts will interpret any ambiguity in an insurance contract

in favor of the insured

insurance is a contract one seeks to protect another from

loss

Describe an independent producer

sells many types of insurance for one company

What document grants express authority to an agent?

Agent's contract with the principal

For the reported losses of an insured group to become more likely to equal the statistical probability of loss for that particular class, the insured group must become

larger

to legally transact insurance in this state, an insurer must obtain what?

Certificate of Authority

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

Guidelines describing company financial integrity

Fiduciary Responsibility

Handling insurer funds in a trust capacity

Transfer of risk of loss to a larger group

Insurance

A situation in which a person can only lose or have no change represents

Pure Risk

what method do insurers use to protect themselves against catastrophic losses?

Reinsurance

Must be held between Insured and beneficiary; risk of a financial loss if insured dies

Insurable Interest

Which of the following statements is an accurate comparison between private and government insurers? a. private insurers may be authorized to transact insurance by state insurance departments b. insurance provided by the government is called federal insurance c. private insurers offer fewer lines of insurance than government insurers d. private insurers provide insurance in areas where the government will not

a. private insurers may be authorized to transact insurance by state insurance departments