Health Insurance chapter 1
What is a foreign insurer?
An insurer with a home office in another state
If an insurer meets the state's financial requirements and is approved to transact business in the state, it is considered to be
Authorized
An individual was involved in a head-on collision while driving home one day. His injuries were not serious, and he recovered. However, he decided that in order to never be involved in another accident, he would not drive or ride in a car ever again. Which method of risk management does this describe?
Avoidance
Which of the following must an insurer obtain to transact insurance within a given state?
Certificate of authority
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
Representation are written or oral statements made by the applicant that are
Considered true to the best of the applicant's knowledge
In insurance transactions fiduciary responsibility means
Handling insurer funds in a trust capacity
Which authority is not stated in an agents contract but its required for the agent to conduct business?
Implied
Which of the following is true regarding a risk retention group?
It is a liability insurance company owned by its members
What is the major difference between a stock company and a mutual company?
Ownership
A participating insurance policy may do which of the following?
Pay dividends to the policyowner
The causes of loss insured against in an insurance policy are known as
Perils
Pertaining to insurance what is the definition of a fiduciary responsibility?
Promptly forwarding premiums to the insurance company
A situation in which a person can only lose or have no change represents
Pure risk
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
All of the following are marketing arrangements used by insurers EXCEPT
Reinsurance System
Which of the following is NOT the consideration in a policy?
The application given to a prospective insured
Not all losses are insurable, an there are certain requirements that must be met before a risk is a proper subject for insurance. These requirements include all of the following EXCEPT
The loss may be intentional
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