General Insurance (Quiz 1)

In insurance transactions, fiduciary responsibility means_________ A. Handling insurer funds in a trust capacity B. Maintaining a good credit record C. Being liable with respect to payment claims D. Commingling Premiums with agents personal funds

A. Handling insurer funds in a trust capacity

All of the following actions by a person could be described as a risk avoidance EXCEPT A. Investing in the stock market B. Refusing to Scuba dive C. Never flying in an airplane D. Not driving after being in an accident

A. Investing in the stock market

Which of the following is an example of a producers fiduciary duty? A. The trust that a client places in the producer in regard to handling premiums. B. An obligation to state every known fact about the policy the producer is selling. C. A duty to base all transactions upon the principle of utmost good faith. D. The obligation to tell the truth to the best of ones knowledge

A. The trust that a client places in the producer in regard to handling premiums.

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 A. Conditions B. Consideration C. Legal purpose D. Offer and acceptance

B. Consideration

The requirement that agents not commingle insurance monies with their own funds is known as ____________ A. Accepted accounting principal B. Fiduciary responsibility C. Premium accountability D. Express authority

B. Fiduciary responsibility

What is a material misrepresentation? A. Any misstatement by the producer B. Concealment C. A statement by the applicant that, upon discovery, would affect the underwriting decision of the insurance company D. Any misstatement made by an applicant for insurance

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

Which documentation grants express authority to an agent? A. Fiduciary contract B. State provisions C. Agents contract with the principal D. Agents insurance license

C. Agents contract with the principal

To legally transact insurance in this state, an insurer must obtain which of the following? A. Business certificate B. Certificate of insurance C. Certificate of authority D. Power of attorney

C. Certificate of authority

What term best describes the act of withholding material information that would be crucial to an underwriting decision? A. Leading B. Breach of warranty C. Concealment D. Withholding

C. Concealment

All of the following are example of risk retention EXCEPT A. Copayments B. Self-insurance C. Premiums D. Deductibles

C. Premiums

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? A. Nonforfeiture B. Indemnity C. Reasonable Expectations D. Cease and desist

C. Reasonable Expectations

Which of the following are authorities that an agent can hold? A. Apparent and allowed. B. Authorized and admitted. C. Primary and secondary. D. Express and implied.

D. Express and implied.

Pertaining to insurance, which of the following is an example of a producer's fiduciary responsibility? A. Helping insureds to file claims B. Performing reviews of insureds coverage C. Offering additional coverage to insureds D. Promptly forwarding premiums to the insurance company.

D. Promptly forwarding premiums to the insurance company.

Which of the following types of agent authority is also called "perceived authority" ? A.Express B.Implied C.Fiduciary D.Apparent Authority

D.Apparent Authority