General CA. Insurance Law

Person

A legal entity which acts on behalf of itself, accepting legal and civil responsibility for the actions it performs and making contracts in its own name. Include: -individual human beings -associations -organizations -corporations -partnerships -trusts

An insurance agent, who has been in a sales slump for the last 6 months, has decided that she will offer complimentary health insurance for the first year on every life insurance policy she sells for the next 12 months. This practice is an example of:

A violation of the Code (No policy for which there is not a separate charge can be used as an inducement to purchase or rent real or personal property).

All of the following are insurable events as defined in the Insurance Code EXCEPT:

An insured loses a large sum in a poker game (Any event, whether past or future, which may damnify a person having an insurable interest, or create a liability against him/her, may be insured against. Speculative losses are uninsurable)

The violation of a material warranty or other provision of a policy allows:

Both the insurer nor the insured to rescind. (The violation of a material warranty or other material provision of a policy, on the part of either party, entitles the other to rescind.)

In the state of CA, who selects the Insurance Commissioner and for how long?

General election, for no more than two 4 year terms

Fraudulent activities in health care are estimated in billions of dollars annually. This results in:

Increase in health care costs for everyone (Although there is no exact figure it is believed that fraudulent activities account for billions annually in added health care costs nationally. This results in a significant increase in health care costs for everyone).

Untrue statements on the application unintentionally made by insureds that, if discovered, would alter the underwriting decision of the insurance company, are called:

Material misrepresentations

What is an injured party entitled to receive if an intentional concealment is discovered?

Recession of the policy (An injured party is entitled to rescind the policy regardless of whether the concealment was intentional or unintentional).

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

Reinsurance (Insurers use reinsurance to protect themselves from catastrophic losses. This is a method where the reinsurer indemnifies the ceding insurer for part or all of the losses it sustains related to a policy issued previously).

Insurance

The transfer of risk of loss from and individual or a business entity to an insurance company, which, in turn, spreads the cost of unexpected losses to many individuals.