General Insurance

What is reinsurance? A. An agreement between an insurer and an insured. B. An agreement between a ceding insurer an assuming insurer. C. An agreement between an originating insurer and a ceding insurer D. An agreement between a domestic insurer and a foreign insurer.

An agreement between a ceding insurer an assuming insurer.

An insurance contract must contain all of the following to be considered legally binding except A. Consideration B. Competent parties C. Beneficiary's consent D. Offer and acceptance

Beneficiary's consent.

When both parties to a contract must perform certain duties and follow rules of conduct to make the contract enforceable, the contract is A. Aleatory B. Personal C. Unilateral D. Conditional

Conditional

What insurance concept is associated with the name Weiss and Fitch? A. Types of mutual companies B. Index used by stock companies. C. Guides describing company financial integrity. D. Policy dividends

Guides describing company financial integrity.

Which of the following is NOT true regarding a Certificate Authority? A. It is issued to group insurance participants. B. It may be necessary for transacting business in a specific state. C. It is equivalent to an insurance license. D. it is issued by state department of insurance.

It is issued to group insurance participants.

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.

An individual applies for a life policy. Two years ago, he suffered a head injury from an accident, so he cannot remember parts of his past, but is otherwise competent. He has also been hospitalized for drug abuse but does not remember this when applying for insurance. The insurer issues the policy and learns of his history one year later. What will probably happen? A. The policy will be voided B. The insurer will sue the insured for committing fraud. C. Because the insured is not currently a drug user, his policy will not be affected. D. The policy will not be affected.

The policy will not be affected.

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 contract element does this describe? A. Conditional B. Unilateral C. Unidirectional D. Aleatory

Unilateral

Which of the following is a statement that is guaranteed to be true, and if untrue, may breach an insurance contract? A. Concealment B. Indemnity C. Representation D. Warranty

Warranty

In forming an insurance contract, when does acceptance usually occur? A. When an insured submits an application. B. When an insurer's underwriter approves contract. C. When an insurer delivers the policy. D. When an insurer receives an application.

When an insurer's underwriter approves contract