general insurance

What is reinsurance?

An agreement between a ceding insurer and assuming insurer

in insurance, an offer is usually made when

An applicant submits an application to the insurer

which of the following is a basis for a claim against an insurance policy?

Loss

what is the major difference between a stock company and a mutual company?

Ownership

a tornado that destroys property would be an example of which of the following?

a peril

insurance policies are not drawn up through negotiations, and an insured has little to say about its provisions. what contract characteristic does this describe?

adhesion

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

apparent

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

concealment

because an insurance policy is a legal contract, it must conform to the state laws governing contracts which require all of the following elements EXCEPT

conditions

an insurance company sells an insurance policy over the phone in response to a tv ad. which of the following best describes this act?

direct response marketing

which of the following entities is not an insurer but an organization formed to provide insurance benefits for members of affiliated lodge or religious organization?

fraternal benefit society

in insurance transactions, fiduciary responsibility means

handling insurer funds in a trust capacity

Courts will interpret any ambiguity in an insurance contract

in favor of the insured

which statements regarding insurable risks are NOT correct?

insureds cannot be randomly selected

the reduction, decrease, or disappearance of value of the person or property insured in a policy by a peril insured against is known as

loss

untrue statements on the application unintentionally made by insureds that, if discovered, would alter the underwriting decision of the insurance company are called

material misrepresentations

untrue statements on the application unintentionally made by the insureds that, if discovered, would alter the underwriting decision of the insurance company, are called

material misrepresentations

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

all of the following are marketing arrangements used by insurers EXCEPT

reinsurance system

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

the applicant has a prior felony conviction

which of the following is not a characteristic of an insurable risk?

the loss must be catastrophic

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

which of the following is a statement that is guaranteed to be true, and if untrue, may breach an insurance contract?

warranty

in forming an insurance contract, when does acceptance usually occur?

when an insurer's underwriter approves coverage