Basics

Question 1

To be an Insurable Risk…(5)

Answer 1

-Large # of similar expo
-Significant in scope
-Measurable
-Accidental
-Non-Catastrophic

Question 2

Requirements for a legal contract (4)

Answer 2

• Age & Mental Capacity
  -Legal Purpose
  -Offer & Acceptance
  -Consideration

Question 3

Insurance Contract Special Elements (3)

Answer 3

-Unilateral
-Conditional
-Good Faith

Question 4

Stock Insurance Company

Answer 4

Capital Stock

Question 5

Mutual Insurance Company

Answer 5

Owned by policyholders

Question 6

Reciprocal Insurance Exchange

Answer 6

Each member (subscriber) of association insures other members *USAA

Question 7

Reciprocal Insurance- Attorney-in-fact

Answer 7

Solicit new members, pay losses, invest funds, assess premiums

Question 8

Lloyd’s of London

Answer 8

Insure unusual and even speculative risk *Kim K body

Question 9

Self-Insurers

Answer 9

Reserves to cover losses

Question 10

Reinsurers

Answer 10

Insurance company “back up”

Question 11

Automatic (Treaty) Reinsurance

Answer 11

ceding company is contractually bound to cede % of risk

Question 12

Facultative Reinsurance

Answer 12

Reinsuring company decides weather to insure or reject

Question 13

Excessive Loss Reinsurance

Answer 13

Primary insurer pays amount of each claim for each risk up to a limit determined in advance

Question 14

Quota Share Reinsurance

Answer 14

primary insurer will pay when claim is over a certain amount

Question 15

Domestic Insurer

Answer 15

Formed under the laws of NC

Question 16

Foreign Insurer

Answer 16

Formed under another states laws

Question 17

Alien Insurer

Answer 17

Formed under another countries laws

Question 18

Admitted Insurer

Answer 18

Offered a Certificate of Authority from NCDOI to operate in NC

Question 19

Indemnity Contract

Answer 19

Promises to pay amount = loss covered under policy

Question 20

Reimbursement Contract

Answer 20

Reimburses expenses

Question 21

Valued Contract

Answer 21

(State Value) insurer agrees to pay a specific amount no matter the loss

Question 22

Adverse Selection

Answer 22

Risk has a greater than average chance of producing a loss

Question 23

Estoppel

Answer 23

Party denies the consequences of its own actions

Question 24

Libel

Answer 24

Form of personal injury communicated through material that cannot be seen

Question 25

Pro-rata

Answer 25

Insurance company must return any advanced unused premium paid