General terms
Assume there are 4 different mortality tables, Of these, the most reliable would be the mortality table covering
10 million tives
Which of the following statements about Lloyd's of London is NOT correct?
A) It is an insurance carrier that underwrites insurance.
In an insurance transaction, whom does a licensed agent legally represent?
A) The insurer
A false statement of fact is known as
A) a misrepresentation
An unincorporated group of subscribers who operate through an attorney-in-fact to provide indemnity insurance for each other is called
A) a reciprocal exchange
Question ID: 741559 A corporation or other limited liability association that assumes and spreads the liability exposure for any of its group members is called
A) a risk retention group
If an agent fails to perform an act required by a policy, the insurer
A) is still required to fulfill its obligation
Daniel owns an insurance agency in a small town and represents just 1 insurer. He wears apparel with the company logo, has the company name on his vehicle, and hands out merchandise with the company's name imprinted on it. What type of authority does this represent?
Apparent
Which of the following is a promise in exchange for an action?
Aunilateral contract
Which of the following types of agent authority is specifically set forth in writing in the agent's contract?
B) Express
Which of the following is NOT encompassed by agency law?
B) Knowledge of the principal is knowledge of the agent.
An insurer of an insurer is known as
B) a reinsurer
In legal terms, the voluntary relinquishment of a known right is called
B) a waiver
In order to be insured, a group must be randomly selected to avoid
B) adverse selection
The tendency of higher-risk individuals to get and keep insurance is known as
B) adverse selection
Floods, heart attacks, theft, and choking are all examples of
B) perils
With regard to insurance, risk can be defined as
B) uncertainty regarding loss
Jamir is an agent for Assured Insurance. He visits Ada, a prospect, in her home, He arrives with business cards, sample policies from Assured, and an Assured rate book. He recommends Assured policies that can meet Ada's needs for insurance. Which of the following terms describes the kind of authority that Jamir has in this situation?
C) Apparent
In an insurance transaction, licensed agents legally represent which of the following?
C) The insurer
An insurance company that is owned by its policyowners, who share the insurer's divisible surplus in the form of participating policy dividends, is known as
C) a mutual insurance company
Jill met with an insurance agent to discuss purchasing a $500,000 term life insurance policy. If Jill signs a contract 2 weeks later while intoxicated,
C) she will not be presumed to be competent
The type of risk that involves the chance of both loss and gain is
C) speculative risk
All of the following are elements of an insurable risk EXCEPT
C) the loss must be catastrophic
Mark and Steve signed a contract in which Mark agreed to apply for health insurance and Steve would submit fraudulent medical claims through his physician billing service. Mark and Steve plan to share the proceeds. The contract between Mark and Steve can best be described as
C) void
The authority that an insurer gives to its agents by means of the agent's contract is known as
D) express authority
A stock insurer is owned by its
D) shareholders
Which of the following would be considered a moral hazard in underwriting a health insurance risk?
Excessive dieting
Which of the following statements regarding exclusive agents is NOT true?
Exclusive agents represent the insured.
An insured gives a premium to a producer with the expectation that the producer will act with the utmost good faith in forwarding it to the insurer. In this case, the producer is said to have what kind of responsibility to or relationship with the insured?
Fiduciary
Which of the following describes facultative reinsurance?
The reinsurer considers each risk before allowing the transfer to be made from the ceding company.
An insurance company that transacts insurance directly with consumers without the assistance of producers is called
a direct response company
A nonprofit organization with a representative form of government and an elected officer that sells life insurance only to its members would be considered
a fraternal benefit society
In an insurance contract, only one party is legally bound to perform under the contract. This describes
a unilateral contract
In the direct-selling marketing system, insurance can be sold to the public through all of the following methods EXCEPT
agents
A contract in which one party may receive considerably more in value than the other party is
an aleatory contract
All of the following are types of agent authority EXCEPT
dubious authority
When a reinsurer considers each risk as a single transaction before assuming it, this is called
facultative reinsurance
Self-insurance is
practiced by organizations that establish reserves to protect themselves against loss
Unincorporated groups of people that agree to insure each other's losses under a contract are known as
reciprocal insurers
A contract in which one insurer cedes all or part of a risk to another is known as
reinsurance
All statements made by an applicant in an application for life insurance are considered to be
representations
According to insurance law, an insurance agent is a person who
solicits, negotiates, procures or effects insurance or annuity contracts on behalf of an
Insurance agents represent
the insurer
With life, accident, and health insurance, an insured's oral misrepresentation or false warranty will NOT void a policy unless
there was intent to deceive or it materially affects the insurer's decision to accept the risk