General Insurance
are part of the policy structure. Consideration is an essential part of a contract.
Conditions
An agent accepts the premium payment 35 days after it is due, telling the insured that there will not be a problem keeping the policy in force. This is an example of what type of agent authority?
Apparent
What authority is the appearance of, or the assumption of, authority based on the actions, words, or deeds of the principal or because of circumstances the principal created.
Apparent;
An applicant who knowingly fails to communicate a fact that would help an underwriter make a sound decision regarding coverage is guilty of
Concealment
are those insurers that do not have a certificate of authority to transact business in the state, but are on the Commissioner's approved list to transact business under the state's surplus lines laws.
Surplus lines insurer.
is the withholding of information that will result in an imprecise underwriting decision.
concealment
Which of the following is an example of an agent's fiduciary responsibilities?
Promptly forwarding premiums to the insurance company
Which of the following is an example of apparent authority?
The agent accepts a premium payment after the end of the grace period; An agent who accepts a premium after the end of the grace period appears to the client to have the authority to prevent the policy from lapsing. In fact, the agent has no such power. The power to use business cards, stationery and signage may be either express (written) or implied (not written), but in either case, it is allowed.
An insured wants to transfer his personal insurance policy to a friend. Under what conditions would this be possible?
The insured will need a written consent of the insurer
Which type of authority is based on the actions, words, or deeds of the principal?
Apparent;
The most effective way to handle risk is to transfer it so that the loss is borne by another party. Insurance is the most common method of transferring risk from an individual or group to an insurance company.
Purchase insurance
Which of the following is the most common way to transfer risk?
Purchase insurance
Which of the following insurance providers would be considered a risk sharing arrangement?
Reciprocal
the insureds are sharing the risk of loss with other subscribers of that reciprocal.
Reciprocal
A nonadmitted insurer who provides insurance coverages that are not available from an admitted insurer is called
Surplus lines insurer.
Because an insurance policy is a contract between the insurer and the insured, it must conform to the state laws governing contracts which require all of the following elements EXCEPT
Conditions
An insurer neglects to pay a legitimate claim that is covered under the terms of the policy. Which of the following terms best describes what the insurer has violated?
Consideration; The binding force in any contract is called "consideration". Consideration on the part of the insured is the payment of premiums and the health representations made in the application. Consideration on the part of the insurer is the promise to pay in the event of loss.
Which of the following is a statement that is guaranteed to be true, and if untrue may breach an insurance contract?
Warranty
in insurance is a statement guaranteed to be true. When an applicant is applying for an insurance contract, the statements he or she makes are generally not warranties, but representations. Representations are statements that are true to the best of the applicant's knowledge.
Warranty
