THE INSURANCE MARKETPLACE
which of the following must an insurer obtain in order to transact insurance within a given state?
certificate of authority
A producer who fails to separate premium monies from his own personal funds is guilty of
commingling
in which distribution system must the potential client take the initiative and respond to an advertisement through a telephone or mail contract with the insurer?
direct response system
what term for a sales campaign conducted through the mail?
direct-response
which of the following would be considered refund or unearned premium?
dividends
which of the following best describes an insurance company that has been formed under the laws of this state
domestic
which of the following terms is defined by the california insurance code as unassigned funds that must be reported on a stock insurer's annual statement
earned surplus
which of the following are the authorities that an agent can hold?
express and implied
In insurance transactions, fiduciary responsibility means
handling insurer funds in a trust capacity
an excluisve agent
has a contract with one company
which of the following persons represents several insurance companies but owns the records of the policies sold?
independent agent represents more than one company at a time. he or she owns the records of all policies sold and is not controlled by any one insurance agency.
which of the following best described earned surplus?
insurer's unassigned funds
which of the following is NOT a license in the state of CA? life broker life only agent solicitor insurance agent
life broker
according to California insurance Code, the term "shall" describes what kind of actions? A. Permissive B. Mandatory C. Implied D. Directive
mandatory
an independent agent may have contracts with which of the following
more than one insurer
a participating insurance policy may do which of the following?
pay dividends to the policy owner
An agent is a legal person who acts on behalf of
principal
what is the term for the entity that an agent represents regarding contractual agreements with third parties?
principal
An agent is a legal person who acts on behalf of
principal (insurer)
pertaining to insurance, which of the following is an example of producers fiduciary responsibility?
promptly forwarding premiums to the insurance company
which of the following can an insured submit to the insurer that would provide evidence of a claim and illustrate how severe the loss is?
proof of claim an insured can submit a proof of claim to the insurer after a loss has occurred. this helps to notify the insurer of the loss and provide info on how large or severe the loss was.
An agent decides that he no longer wishes to be licensed in this state. What should the agent do with his license?
return it to commisioner
an insurance agent collected policy premiums from his clients and before remitting the funds to the insurer, borrowed some for personal use. this act would be legally considered
theft
De-mutualization happens when
A mutual insurer becomes a stock company.
a licensed insurance agent overhears a conversation that leads him to believe a person is committing fraud. if the agent makes a written report to a law enforcement agency and the person is investigated, but it turns out that it was an erroneous accusation, what charge will the agent face?
No charges; the Insurance Code gives the agent legal immunity. immunity from a lawsuits for an agents "good faith" report of suspected fraud. CIC 1877.5
Who might receive dividends from a mutual insurer?
Policyholders
Because an agent is using stationery with the logo of an insurance company, applicants for insurance assume that the agent is authorized to transact on behalf of that insurer. What type of agent authority does this describe?
apparent
If an insurer meets the state's financial requirements and is approved to transact business in the state, it is considered what type of insurer?
authorized
An insurer that holds a Certificate of Authority in the state in which it transacts business is considered a/an
authorized insurer
The Code defines the term "transact" as all of the following EXCEPT
analyzing a contract of insurance
When transacting business in this state an insurer formed under the laws of another country is known as a/an
alien insurer
an applicant for insurance is requesting more information from her agent about a claim that is currently being settled. within what time period must the agent respond?
15 days
Without obtaining dual licensing, life-only agents may transact all of the following types of insurance EXCEPT
24 hour coverage
an exclusive agent
Has a contract with one company. The exclusive agent, also known as the captive or career agent, chooses to have a contract with one company.
a person who DOES NOT work on behalf of the company for which he or she does business , but rather represents the prospect, insured, or client is called
an insurance broker
which of the following is another term for authorized insurer?
admitted insurers who meet the states financial requirements and are approved to transact business in the state are considered authorized or admitted into the state as a legal insurer.
the california insurance code is
Statutes established by the State Legislature.
which of the following departments is responsible for developing mortality and morbidity tables?
actuarial department concerns itself with statistics involved in insurance. it is responsible for developing mortality and morbidity tables, calculating premiums and dividends, and preparing annual reports.
What documentation grants express authority to an agent?
agents contract with the principal
