Chapter 1 : General California Insurance Law
According to the Code, how many separate requirements should an insurance policy have? A4
6
What is reinsurance?
An agreement between a ceding insurer an assuming insurer
The violation of a material warranty or other material provision of a policyallows
Both the insurer and the insured to rescind
The set of regulations issued by the California Insurance Commissioner that identifies the standards for the insurance code and how it is to be administered is
California Administrative Code of Regulations.
What is the term for a sales campaign conducted through the mail?
Direct-response
The Commissioner performs all of the duties dictated by the CIC and
Enforces the execution of all provisions and laws.
Home Service insurance is a variation of which type of life policies?
Industrial Life insurance
What do individuals use to transfer their risk of loss to a larger group?
Insurance
A contract which one party undertakes to indemnify another against loss is called
Insurance.
Which of the following best describes a misrepresentation?
Issuing sales material with exaggerated statements about policy benefits
An insured stated on her application for life insurance that she had never had a heart attack, when in fact she had a series of minor heart attacks last year for which she sought medical attention. Which of the following will explain the reason a death benefit claim is denied?
Material misrepresentation
According to California Insurance Code, which of the following can be classified as an insurable event?
PR
What method do insurers use to protect themselves against catastrophic losses?
Reinsurance
An intentional or unintentional concealment entitles the affected party to which of the following?
Rescission of a contract.
All of the following statements are true regarding an application by an insurer for a rate change EXCEP
The application will be deemed approved 60 days after public notice unless the proposed adjustment exceeds 10% for personal lines or 25% for commercial lines.
Which of the following does NOT need to be identified in an insurance policy?
The insurer's financial rating
All of the following are true regarding representations EXCEPT
They may be altered or withdrawn after the issuance of the policy.
What is the purpose of the California laws regulating production agencies?
To provide protection for the clients by requiring producers to maintain professional standards of conduct
Insurance is a contract by which one seeks to protect another from
loss
8 Acting as an agent for a nonadmitted insurer (unless a surplus line broker) is considered a/an
mis
An insurance company that is NOT authorized to do business in the State of California is known as a(n)
onadmitted company.
The type of insurance that guarantees the behavior of persons and the performance of contracts other than insurance policies is known as
Surety insurance.
All of the following must be specified in an insurance policy EXCEPT
The financial rating of the insurer
The importance of a misrepresentation is determined by
The materiality of a given concealment.
Which of the following is NOT the purpose of HIPAA?
To provide immediate coverage to new employees who had been previously covered for 18 months
In California, which system is used to approve or disapprove rate filings?
prior
For senior agents, the requirement for continuing education for California Partnership for long-term care policies is
8 hours each reporting period.
All of the following are insurable events as defined in the Insurance Code EXCEPT
An insured loses a large sum in a poker game.
What is a foreign insurer?
An insurer with a home office in another state
A France-based insurer would like to do business in California. What document must it first receive?
Cof A
An insurance company assures its new policyholders that their premium costs will not increase for a period of at least five years. However, due to increasing financial strain, they plan to raise premium costs for all insureds by 10% over the next two years. What term best describes this act?
Fraud
All insurers doing business in California must maintain a department to investigate possible AEthics violations by agents.
Fraudulent claims by insureds.
An exclusive 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
Which type of insurance includes the assumption of a contractual obligation to reimburse the insured against all or a portion of his fees, costs, and expenses related to or arising out of services performed by or under the supervision of an attorney who is an active member of the bar of any jurisdiction or jurisdictions of the United States?
Legal insurance
Insurance is a contract by which one seeks to protect another from
Loss.