General Insurance

"Perceived Authority"

Apparent

An insurance organization that does not issue insurance policies but provides a meeting place for underwriters to conduct business is known as a

Lloyd's Association

The risk of loss may be classified as

Pure risk and speculative risk

What documentation grants express authority to an agent?

Agent's contract with the principal

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

Express Authority

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

Express authority

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

The causes of loss insured against in an insurance policy are known as

Perils

Which of the following insurers are owned by stockholders?

Stock

Which of the following would qualify as a competent party in an insurance contract?

The applicant has a prior felony conviction

In terms of parties to a contract, which of the following does NOT describe a competent party?

The person must have at least completed secondary education.

In insurance policies, contract ambiguities are automatically ruled in the favor of the insured. What privilege does the insurer have in order to balance this?

The right to determine the wording of a policy

Events or conditions that increase the chances of an insured loss occurring are referred to as

Hazards

Not all losses are insurable, and there are certain requirements that must be met before a risk is a proper subject for insurance. These requirements include all of the following EXCEPT

The loss may be intentional

Which of the following is NOT a characteristic of an insurable risk?

The loss must be catastrophic

Which of the following types of agent authority is also called "perceived authority"?

Apparent

Which law is the foundation of the statistical prediction of loss upon which rates for insurance are calculated?

Law of large numbers

Which of the following produces evaluations of insurers' financial status often used by state departments of insurance?

AM Best

In insurance, an offer is usually made when

An applicant submits an application to the insurer

What is a foreign insurer?

An insurer with a home office in another state.

An applicant knowingly fails to communicate information that would help an underwriter make a sound decision regarding coverage. This is an example of

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?

Consideration

Contracts that are prepared by one party and submitted to the other party on a take-it-or-leave-it basis are classified as

Contracts of adhesion

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

Guides describing company financial integrity

Which of the following statements is an accurate comparison between private and government insurers?

Private insurers may be authorized to transact insurance by state insurance departments

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

Reinsurance

Which authority is NOT stated in an agent's contract but is required for the agent to conduct business?

Implied

When an individual purchases insurance, what risk management technique is he or she practicing?

Transfer