UT Life & Health

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

Apparent

Which insurance principle states that if a policy allows for greater compensation than the financial loss incurred, the insured may only receive benefits for the amount lost?

Indemnity

Which of the following is the basis for a claim against an insurance policy?

Loss - result from a losses by a peril against in an insurance policy

On a participating insurance policy issued by a mutual insurance company, dividends paid to policyholders are

Not taxable since the IRS treats them as a return of a portion of the premium paid

What is a material misrepresentation?

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

Authority

Agency contract details the authority an agent has witin company

What document grants express authority to an agent ?

Agents contract with the principal

apparent

Appearance or assumption of authority based on actions, words, or deed of the principal

An insurer that holds a certificate of authority in the state in which it transacts business is considered a

Authorized insurer

The requirement that agents not commingle monies with their own funds is known as?

Fiduciary responsibility

Fiduciary Responsibility

Handling insurer funds in a trust capacity

In insurance transactions fiduciary responsibility means ?

Handling insurer funds in a trust capacity

Alien insurer

Is a insurer formed under the laws of another country

Implied

Is authority that is not expressed or written into the contract

Apparent Authority

Is the appearance or the assumption of authority based on the actions, words or deeds of the principal

Express

Is the authority a principal intends to grant to an agent

3 types of authority

express, implied, apparent

Mutual Insurer

Owned and controlled by their policyholders. Any surplus money is returned to the policyholder as dividends.

What is the term for the entity that an agent represents regarding contractual agreement with third parties?

Principal

Applying the principal of indemnity

The insurer will pay the actual cost of the Loss up to the limit stayed in the policy.

The insurer must be able to rely on the statements in the application, and the insured must be able to rely on the insurer to pay valid claims. In the forming of an insurance contract, this is referred to as

Utmost good faith