Test general insurance

1. What documentation expresses authority to an agent? A.state provisions B.Fiduciary contract C.Agents insurance license D. Agents contract with the principal.

A. Agents contract with the principal

Which of the following produces evaluations of insurers financials status often used by state department of insurance? A. AM best B. NAIC C. Consumers guide D. SEC

A. Am best

A situation in which a person can only lose or have no change represents A.pure risk B. Speculative C. Adverse selection. D. Hazard

A. Pure risk

Which of the following insurance options would be considered a risk sharing arrangement? A. Reciprocal B. stock C. Mutual D. Surplus lines

A. Reciprocal

Events in which a person has both the chance of winning or losing are classified as A. Speculative risk B. Insurable C. Pure risk D. Retain risk

A. Speculative risk

Not all losses are insurable, and there are certain requirements that must be met before risk is a proper subject for insurance. These requirements include all of the following, except A. The loss may be intentional B. The loss must not be catastrophic C. There must be a significant number of homogeneous exposure units to make losses reasonably predictable. D. The loss produced by the risk must be definite.

A. The loss may be intentional

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 kind of contact element does this describe? A. Unilateral B. Unidirectional C. Aleatory D. Conditional

A. Unilateral

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

B. Apparent.

A producer, who fills a separate premium monies from his own personal funds, is guilty of? A. Theft. B. Commingling. C. Larceny. D. Embezzlement.

B. Commingling

Which of the following would qualify as a competent party in an insurance contract? A. The application is under the influence of a mind impairing medication at the time of application. B. The applicant has a prior felony conviction. C. The applicants intoxicated at the time of application. D. The applicant is 12 a year old student.

B. The applicant has a prior felony conviction.

Which of the following is not the consideration in a policy A. The promise to pay covered losses. B. The application given to a prospective insured C. Something of value exchange between parties D. The premium amount pay at the time of application.

B. The application given to perspective insured

2. So legally transact insurance in the state an insurer must obtain which of the following? A. Certificate of insurance. B. Certificate of authority. C. Power of attorney. D. Business entry license.

B.Certificate of authority

Contracts that are prepared by one party and submitted to the other party and take it of -or-leave it bases are classified as A. Binding contract. B. contracts of adhesion C. Unilateral contracts D. Aleatory contracts

B.Contracts of adhesion

Which authority is not stated in an agents contract, but it is required for the agents to conduct business? A. Assumed B. Express C. Implied. D. Apparent.

C. Implied

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

C. Investing in the stock market

An insured purchased an insurance policy 5 years ago. last year she received a divider 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 ? A. Nonprofit service organization B. Stock C. Mutual D. Reciprocal

C. Mutual

When an individual purchases insurance,what risk management technique is he or she practicing? A. Sharing B. Retention C. Transfer D. Avoidance

C. Transfer

Which of the following is another term for an authorized issuer? A. Certified B. Licensed C. Legal D. Admitted

D. Admitted

If an insurer meets the states financial requirements and is approved to transact business in the state, it is consumed to be A. Certified. B. Qualified. C. Approved. D. Authorized.

D. Authorized

When an insured makes truthful statements on the application for insurance, and pay the require premium. It is known as which of the following. A. Legal purpose B. Contract of adhesion C. Acceptance D. Consideration

D. Consideration

In insurance transactions, fiduciary responsibility means A. Maintaining a good credit score B. Being liable with respect to pay of claims. C. Commingling premiums with agents, personal funds. D. Handling insurer funds in a trust capacity.

D. Handling insurer funds in a trust capacity.

Which insurance principle states, that if a policy allows for greater compensation than the financial loss incurred, the insured made only receive benefits for the amount lost? A. Stop loss B. Consideration. C. Reasonable expectations D. Indemnity

D. Indemnity

Excluding life insurance under what condition, may a policy owner transfer their insurance policy to another person? A. It is it possible to transfer a policy. B. The insured must first surrender their policy in order for the other person to buy it. C. The insured can't transfer the policy to the other person and then notify the insurer of the change. D. The insured will need the written consent of the insurer

D. The insured will need the written consent of the insurer

For the purpose of insurance risk is defined as A. The certainty of loss B. The cause of loss. C. An event that increases the amount of loss D. The uncertainty chance of loss.

D. The uncertainty chance of loss

Which authority is not stated in an agents contract, but is required for the agent to conduct business? A. Apparent B. Assumed C. Express D. Implied

D.Implied

Which statement regarding insurable risk is not correct? A. Insurance cannot be mandatory. B. The insurable risk needs to be statistically predictable C. Insurance risk must involve a lost that is definite as the cause,time,place and amount. D. Insureds cannot be randomly selected

D.insureds cannot be randomly selected