Chapter 1
insurance companies may be classified according to the legal form of their ownership. The type of company organized to return any surplus of money to their policy holder
A mutual insurer
A tornado that destroys property would be an example of which of the following?
A peril
Which of the following must an insurer obtain in order to transact insurance within a given state?
Certification of Authority
The authority granted to an agent through the agent's contract is referred to as
Express authority
What insurance concept is associated with names Weiss and Fitch
Guides describing financial integrity
Who might receive dividends from a mutual insurer?
Policy holder
Which of the following types of agent authority is also called "perceived authority" ?
Apparent
Which of the following is the most common way to transfer risk?
Purchase insurance
Which of the following insurance options would be considered a risk-sharing arrangement?
Reciprocal
Which type of insurance is based on mutual agreement among subscribers?
Reciprocal Insurance
Which type of insurance is based on a mutual agreements among subscribers?
Reciprocal insurance
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
Something of value exchanged between the insurer and the insured is considered an
consideration
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 forming of an insurance contact, this is referred to as
Utmost good faith
What do individuals use to transfer their risk of loss to a larger group?
insurance
An insurer has made all of the decisions regarding the provisions included in the insured's policy. The insured finds an objectionable provision and wants to negotiate it with the insurer but not allowed to do so. Her only options are to reject the policy or accept it as it is. Which contract is described.
Adhesion