Insurers

Subject to the restrictions of the California Insurance Code, any person capable of making a contract may be considered.

a) a broker b) a solicitor c) an insurer d) an agent c) an insurer

Which of the following would be considered an alien insurer?

a) a company that is organized in Nevada but maintains branch offices in this state b) an unauthorized company that underwritten undocumented workers c) a company located in England and doing business in California d) all the above are alien insurers c) a company located in England and doing business in California

In California, an insurer organized under the state laws of Nevada is considered:

a) an alien insurer b) a non admitted insurer c) a foreign insurer d) an illegal insurer c) a foreign insurer

The insurance per used for an insurer who has not complied with the requirements to obtain a certificate of authority from the California Insurance Commissioner is:

a) non admitted b) domestic c) Lloyd's d) alien a) non admitted

Coverage cannot be obtained from an admitted insurer. Therefore an entity is identified that can sell insurance not underwritten in California. What is this entity?

a) a foreign insurer b) a bail bond broker c) a surplus lines broker d) an insurance broker c) a surplus lines broker

A contract that an insurer obtains to insure itself against loss to its book of business is known as

a) contingency agreement b) reinsurance c) coinsurance d) hold-harmless agreement b) reinsurance

An insurer who offers rates for insurance coverage to insureds who have an average or better than average loss exposure is called

a) a standard market insurer b) an exclusive insurer c) a surplus lines insurer d) a premier market insurer a) a standard market insurer

An insurance company can transact any class of insurance:

a) assuming it has paid all required fees b) authorized by its articles of incorporation or charter, and is admitted to transact that class by the insurance commissioner c) assuming the commissioner grants this ability d) if it has 25 agents with signed appointments b) authorized by its articles of incorporation or charter, and is admitted to transact that class by the insurance commissioner

The insurance term for an insurer which has met the conditions required to transact insurance in the state of California is

a) authorized b) entitled c) admitted d) eligible c) admitted

The process whereby a mutual insurer becomes a stock company is called:

a) demutualization b) reorganization c) stock split d) stock buyout a) demutualization

The state laws that regulate insurer practices regarding underwriting, sales, rate-making and claims handling are called:

a) market conduct regulation b) insurer policing c) ethical standards surveillance d) state regulation a) market conduct regulation

An insurer organized under the laws of the state of California is a:

a) non-admitted insurer b) foreign insurer c) non-alien insurer d) domestic insurer d) domestic insurer

What must a surplus line broker do before procuring insurance from a non admitted insurer?

a) perform a diligent search that establish that fewer than three admitted insurers actually write the particular type of insurance sought b) perform a diligent search that establishes that three admitted insurers have declined the risk OR that fewer than three admitted insurers actually write the particular type of insurance sought c) Perform a diligent search that establishes that three admitted insurers have declined the risk d) Nothing. There are no special requirements that a surplus line broker must satisfy before procuring insurance from a non admitted insurer. b) perform a diligent search that establishes that three admitted insurers have declined the risk OR that fewer than three admitted insurers actually write the particular type of insurance sought

In a reinsurance agreement the insurer that transfers its loss exposure to another is called the

a) primary insurer b) captive insurer c) private insurer d) secondary insurer a) primary insurer

An insurer owned by policyholders is a:

a) reciprocal exchange b) mutual insurer c) capital stock insurer d) fraternal insurer b) mutual insurer

The department responsible for evaluation, selection and distribution of risks is:

a) the marketing and sales department b) the actuarial department c) the claims department d) the underwriting department d) the underwriting department

What is the penalty for unlawfully acting as an agent or broker for, or aiding an insurer without a certificate of authority?

a) up to 1 year imprisonment b) $500 c) $100 per month that the agent continues the violation d) any penalty for applicable misdemeanor, plus $500, plus $100 per month that the agent continue the violation d) any penalty for applicable misdemeanor, plus $500, plus $100 per month that the agent continue the violation

What is the penalty for unlawfully acting as an insurer without a certificate of authority?

a) up to 1 year imprisonment b) fine not exceeding $100000 c) both up to one year imprisonment and a fine not exceeding $100000 d) insurers are not required to have certificates of authority, only licensed agents are required to have them c) both up to one year imprisonment and a fine not exceeding $100000