General Insurance

when a change needs to be made on the application for insurance, which is the best method for correcting the information?

complete a new application or ask the applicant to initial the correction on the original application

Who own stock companies

stock holders

when agents act within the scope of their contract, their actions will be assumed to be the acts of whom?

the insurer

What are the three types of agent authority?

1. express 2. implied 3. apparent

what type of report provides information about the applicant's hobbies, habits, and financial status?

Inspection report

What do individuals use to transfer their risk of loss to a larger group?

Insurance

Whom does an insurance agent represent?

Insurance Company

if an insurer needs to obtain information about the applicant from investigators, what is the insurer required to do?

Provide the applicant a Disclosure Authorization Notice

what type of risk is insurable?

Pure

A situation in which a person can only experience a loss and no gain presents what type of risk?

Pure risk

In the agent/insurer relationship, who is considered the principal?

insurer

for the purpose of insurance, what is risk

uncertainty of loss

when would a misrepresentation on an insurance application be considered fraud?

when it is intentional and material

In insurance, when is the offer usually made on a contract?

when the insurance application is submitted

The reduction, decrease, or disappearance of value of the person or property insured in a policy is known as what?

loss

what are the 3 types of hazards?

physical, moral, and morale

wagering on a sporting even is known as what type of risk

speculative

What type of insurer is formed under the laws of another country?

Alien

Insurers are classified according to their domicile. What are the three types of insurers?

Domestic foreign and alien

Insurance is used to transfer what to the insurance company?

Financial responsibility for loss

An insurance company that is formed under the laws of another state is known as what type of insurer?

Foreign

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

Law of Large Numbers

Insurance is a contract that protects the insured from what?

Loss

an applicant conceals relevant health information on the application and the applicant presents what type of hazard?

Moral

What are the strategies used by underwriters to prevent adverse selection?

Restriction of coverage, refusal to accept a risk, and accepting a risk at a high rate

what is the best way to handle incomplete insurance applications?

Return the application to the applicant for completion

If an agent fails to obtain the applicant's signature on the insurance application, what must the insurer do?

Send the application back to the applicant for signature

when risks with higher probability of loss are seeking insurance more often than other risks, this is known as what

adverse selection

According to the law of agency, a principal is represented by whom?

agent or producer

an insurance company is domiciled in California and transacts in nevada. what is this insurer's classification in nevada?

foreign

conditions that increase the chance of a loss are known as what?

hazards

State issued document empoowering an insurance company to become an admitted insurer is called what?

Certificate of Authority

What document is required for an insurance company to transact insurance?

Certificate of Authority

in order to transact insurance within a given state, an alien insurer must first obtain what?

Certificate of Authority

what type of insurance company organized to return any surplus money to its policyholders is known as what?

Mutual company

what is the term for the causes of loss insured against in an insurance policy?

Peril

the insurer organized to return a profit to the stockholders is what type of insurer?

Stock Company

what entities make up the medical information bureau?

insurers

Whose responsibility is it to determine that all the questions on an insurance application are answered?

The agents

What is the name of the process that insurance companies use to determine whether or not an applicant is insurable?

Underwriting

what are the most common penalties for violations of insurance statutes?

a cease and desist order, a fine, and license suspension or revocation