Chapter One
In an insurance contract, consideration refers to...
Exchange of something of value between both parties
What law requires and insurance company to notify an applicant in writing that an investigative consumer report may be initiated?
Fair credit report act
Representations are statements made by an applicant that are...
Guaranteed to be true
If the agent feels there could be misrepresentation on the part of the applicant for insurance, what must the agent do?
Inform the insurance company
This document provides information about an applicants mode of living, finances and exposure to abnormal habits...
Inspection teport
The medical information bureau is...
Main source of medical information to alert insurers to adverse medical history
What qualifies as a suspicious transaction and would require the filing of an SAR?
Multiple wire transfers from the account in the amount of $5,000
An insured submits the full premium along with a completed application, and the policy is issued 10 days later. When does the coverage begin?
On the date of the application
If a medical report is required during underwriting process, who must complete the report?
Paramedics or physicians
If no receipt is issued at the time of application, a statement of good health is usually required at the time of...
Policy delivery
If an agent fails to obtain an applicant's signature on the insurance application, the agent must...
Return the application to the applicant for signature
What is the main responsibility of a company's underwriting unit?
Risk selection and classification
Who doesn't sign a life insurance policy?
The beneficiary
Best description of the USA PATRIOT act with regards to the insurance industry...
To prevent terrorism activities through monitoring of financial transactions
What guarantees that the information explained in the insurance contract is true?
A warranty
This part of the application provides information about an applicants financial condition and character, as well as the purpose of the sale and how long the agent has known the applicant...
Agents report
Over several years, a policy owner paid $10,000 in premiums for his insurance policy. When he suffered a loss, the insurance company paid out $50,000 in benefits. What characteristic of an insurance contract does this describe?
Aleatory
Which of the following is considered a field underwriter?
An agent
What term is used for a person who seeks insurance coverage from an insurer?
Applicant
Which would be the main source of underwriting information used by the company in the risk selection process?
Application
When must insurable interest exist?
Application date
An insurer that automatically gives coverage upon receipt of an application and the premium has given what to the applicant?
Conditional receipt
What report includes information regarding a persons credit, character, reputation and habit?
Consumer report
When may a statement of good health be required?
When no premium is paid with application