General Insurance

What is reinsurance?

An agreement between a ceding insurer and assuming insurer

In Insurance, an offer is usually made when

An applicant submits an application to the insurer.

Which of the following types of agent authority is also called "perceived authority"

Apparent

An individual was involved in a head-on collision while driving one day. His injuries were not serious, and he recovered. However, he decided that in order to never be involved in another accident, he would not drive or ride in a car ever again. Which method of risk management does this describe?

Avoidance

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

Fiduciary responsibility.

Unites with the same or similar exposure to loss are referred to as

Homogeneouse

A life insurance policy has a legal purpose if both of which of the following elements exist?

Insurable interest and consent

A person who does not lock the doors or does not repair leaks shows an indifferent attitude. This person presents what type of hazard?

Morale

An insured purchased an insurance policy 5 years ago. Last year, the insured received a dividend check from the insurance company that was not taxable. This year, the insurer did not send a check. From what type of insurer did the insured purchase the policy?

Mutual

All of the following are examples of risk retention EXCEPT

Premiums

Which of the following statements is an accurate comparison between private and government insurers?

Private insurers may be authorized to transact insurance by state insurance department.

Pertaining to insurance, which of the following is an example of a producer's fiduciary responsibility?

Promptly forwarding premiums to the insurance company

A situation in which a person can only lose or have no change represents

Pure risk.

If a court ordered payments for a loss that was not covered in the policy even if it was clearly worded, it would be an example of which legal concept?

Reasonable expectations

All of the following are marketing arrangements used by insurers EXCEPT

Reinsurance System

Hazard is best described as

Something that increases the risk of loss.

Which of the following is an example of a producer's fiduciary duty?

The trust that a client places in the producer in regard to handling premiums.

In forming an insurance contract, when does acceptance usually occur?

When an insurer's underwriter approves coverage.