General Insurance Missed Quiz Questions

When transacting business in this state an insurer formed under the laws of another country is known as a/an

Alien Insurer

In insurance, an offer is usually made when

an applicant submits an application to the insurer.

What is a material misrepresentation?

A statement by the applicant that, upon discovery, would affect the underwriting decision of the insurance company

What is a foreign insurer?

An insurer with a home office in another state

When an insured makes truthful statements on the application for insurance and pays the required premium, it is known as which of the following

Consideration

When an insured makes untruthful statements on the application for insurance and pays the required premium, it is known as which of the following?

Consideration

Which of the following is NOT a goal of risk retention?

To minimize the insured's level of liability in the event of a loss.

ABC insurance company received an incomplete application and issues the policy anyway. Six months later ABC realizes the missing information. What term is used that prevents ABC from forcing the policyowner to answer further questions?

Estoppel

Using an air-cooled engine, a proposed insured has developed a new, experimental aircraft. If the inventor applies for liability insurance, what rating type will the insurer most likely use?

Judgement

Which rating method provides an insurer with that portion of a rate that does not include provisions of expenses (other than adjusting expense) or profit and is based on historical aggregate loss and loss adjustment expenses projected through development to their ultimate value and through trending to a future point in time?

Loss costs rating

Rates that are established based on the similarities of the risk with others risks are known as

Manual Rates

An insured purchased an insurance policy 5 years ago. Last year, she received a dividend check from the insurance company that was NOT taxable. This year, she did not receive a check from the insurer. From what type of insurer did the insured purchase the policy?

Mutual

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.

If a court ordered payment for a loss that was not covered in the policy even if it was clearly worded, it would be an example of which legal concept?

Reasonable expectations

Which of the following is NOT the consideration of policy?

Something of value exchanged between parties

Which of the following is NOT a consideration in a policy?

The application given to a prospective insured

Which of the following is a characteristic of a Reciprocal Insurance Exchange?

The chief administrator of the insurer is called an attorney-in-fact

An insured wants to transfer his personal insurance policy to a friend. Under what conditions would this be possible?

The insured will need a written consent of the insurer.

An insured wants to transfer his personal insurance policy to a friend. under what conditions would this be possible?

The insured would need a written consent of the insurer

In insurance policies, contract ambiguities are automatically ruled in the favor of the insured. What privilege does the insurer have in order to balance this?

The right to determine the wording of a policy

In insurance policies, the insured is not legally bound to any particular action in the insurance contract, but the insurer is legally obligated to pay losses covered by the policy. What contract element does this describe?

Unilateral

The insurer must be able to rely on the statements in the application, and the insured must be able to rely on the insurer to pay valid claims. In the forming of an insurance contract, this is referred to as

Utmost good faith