Insurance Pre-licensing : Chapter 1 quiz

What term best describes the act of withholding material information that would be crucial to an underwriting decision?

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

The authority granted to an agent through the agent's contract is referred to as

express authority

When would a misrepresentation on the insurance application be considered fraud?

If it is intentional and material

An insurance organization that does not issue insurance policies but provides a meeting place for underwriters to conduct business is known as a...

Lloyd's association

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

The applicant has a prior felony conviction

What documentation grants express authority to an agent?

Agent's contract with the principal

Because an agent is using stationery with the logo of an insurance company, applicants for insurance assume that the agent is authorized to transact on behalf of that insurer. What type of agent authority does this describe?

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

Which of the following is NOT an essential element of an insurance contract?

Counteroffer

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

Insurance is the transfer of...

Risk

Which of the following types of insurers is owned by stockholders?

Stock

The risk management technique that is used to prevent a specific loss by not exposing oneself to that activity is called...

avoidance

An insurance contract must contain all of the following to be considered legally binding EXCEPT

beneficiary's consent