Basic Principles Flashcards
Which of the following outlines the authority given to the producer on the behalf of the insurer?
Producer Contract
Which of the following is NOT an objective of the National Association of Insurance Commissioners
Regulate state insurance commissioners
Who regulates an insurer’s claim settlement practices?
State Insurance Departments
When a ceding insurer transfers a portion of its risk to an assuming insurer on a case by case basis, this process is referred to as
Facultative Reinsurance
What type of risk involves the potential for loss with no possibility for gain?
Pure Risk
Purchasing Insurance is an example of risk
Transference
Which of the following financial products creates an instant estate, no matter when the date of death?
Life Insurance
Insurance is NOT characterized as which of the following?
As the number of insureds increase the number of losses decrease
A(n)___ insurer assumes risk from another insurance company.
Reinsurance
A condition that increases the possibility of financial loss is called a(n)
Hazard
Which of the following is an unincorporated association whose members provide coverage for one another?
Reciprocal
Dividends from a mutual insurance company are paid to whom?
Policyholders
A business becoming incorporated is an example of risk ____
Transfer
Which of the following is a syndicate established by a group of insurers to share underwriting duties?
Lloyd’s organization
ABC Company is attempting to minimize the severity of potential losses within its company. The company is engaged in risk
Reduction
