General Insurance
Loss
Insurance is a contract that protects the insured from what?
Stock Company
The insurer organized to return a profit to the stockholders is what type of insurer?
Hazards
Conditions that increase the chance of a loss are known as what?
Morale
A person who does not lock the door to their house shows an indifferent attitude. What type of hazard do they represent?
Agent or Producer
According to the Law of Agency, a principal is represented by whom?
Moral
An applicant conceals relevant health information on the application. What type of hazard is the applicant showing?
Foreign
An insurance company is domiciled in California and transacts insurance in Nevada. What is this insurer's classification in Nevada?
foreign
An insurance company that is formed under the laws of another state is known as what type of insurer?
Mutual
An insurance policy paid a nontaxable dividend to the insured one year and nothing to the next. From what type of insurer did the insured purchase the policy?
When the insurer approves a prepaid application
In forming an insurance contract, when does an acceptance usually occur?
When the insurer improves a prepaid application
In forming an insurance contract, when does an acceptance usually occur?
Insurer
In the insurer/agent relationship, who is considered the principal?
Send the application back for applicants signature
If an agents fails to obtain the applicants signature on the insurance application, what should the insurer do?
The agent
If an applicant does not receive his or her insurance policy, who would be held responsible?
Authorized or Admitted
If an insurer meets the state's financial requirements and is approved to transact business in the state, it is considered what type of insurer?
Loss
The reduction, decrease, and or disappearance of value of the person or property insured in a policy is known as what?
Fidicuary
The requirement that agents must account for and promptly remit all insurance funds collected is known as what type of agent responsibility?
Mutual Company
The type of insurance company organized to return any surplus money to its policyholders is known as what?
For the purpose of insurance, what is risk?
Uncertainty of loss
Speculative
Wagering on sporting events is known as what type of risk?
Physical, moral, and morale
What are the 3 types of hazards?
agreement, consideration, competent parties, legal purpose
What are the 4 elements of an insurance company?
Loss must be 1)Due to change, 2)definite and measurable, 3)statistically predictable, 4)not catastrophic, and 5)coverage cannot be mandatory.
What are the 5 characteristics of an ideally insurable risk?
Restriction of coverage, refusal to accept a risk, and accepting a risk at a higher rate.
What are the strategies used by underwriters to prevent adverse selection?
express, implied, apparent
What are the three types of agent authority?
Insurance
What do individuals use to transfer their risk of loss to a larger group?
Certificate Authority
What document is required for an insurance company to transact insurance?
Insurers
What entities make up the Medical Information Bureau?
An absolute true statement upon which the validity of the insurance contract is based
What is a warranty in an insurance contract?
Return the application to the applicant for completion
What is the best way to handle incomplete insurance applications?
Peril
What is the term for the causes of loss insured against in an insurance policy?
Insurable interest and consent
What two elements are necessary for a life insurance contract to have a legal purpose?
Alien
What type of insurer is formed under the laws of another country?
investigate consumer report
What type of report contains info on an applicant's hobbies, habits, and financial status?
Pure
What type of risk is insurable?
Complete a new application or ask the applicant to correct the application on the original application
When a change needs to be made on the application for insurance, which is the best method for correcting the information?
Insurer
When agents act within the scope of their contract, their action will be assumed to be acts of whom?
When the policy is delivered and the premium is paid
When does an insurance policy go into effect?
Adverse Selection
When risks with a higher probability of loss are seeking insurance more often than other risks, this is known as what?
When it is intentional and material
When would a misrepresentation of on a life insurance application be considered fraud?
Stockholders
Who owns stock companies?
insurance company
Whom does an insurance agent represent?
Pure Risk
a risk that presents the chance of loss but no opportunity for gain