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Property and Casualty > Chapter 1 and 2 LIGHTENING > Flashcards

Chapter 1 and 2 LIGHTENING Flashcards

1
Q

Who protects the insuring population by regulating all insurers and professionals doing business in the state?

A

State Commissioner, supervisor or director of insurance

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2
Q

What is a stock insurance company??

A
  • Issues non participating policies

- owned by stockholders who received taxable corporate dividends as a return of profit

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3
Q

what type policy does a mutual insurance company issue? who owns it?

A
  • issues participating policies

- owned by policyholders who receive non-taxable dividends as a return of unused premium

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4
Q

What is reinsurance??

A

Transfer of risk between insurance companies. reinsurer assumes some or all of the risk of the primary company

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5
Q

Domestic insurer organized under ???

A

Resident State

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6
Q

Foreign insurer organized under??

A

Laws of another state within the US

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7
Q

Alien insurer is organized by?

A

laws of a country outside the US

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8
Q

What can an admitted insurer do?

A

authorized to do insurance business in the state and is issued certificate of authority by state’s dept of insurance

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9
Q

Responsibilities of underwriting department

A

Responsible for selection of risks, to insure and determine rates to be charged

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10
Q

Whats an agent/producer do?

A

Can be employee of insurance company that owns the agent’s book of business or indpeendent agent that enters into agreements with more than one company. indepdent agent retains ownership of their books of business

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11
Q

What is express authority?

A

written into producer’s agency contract

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12
Q

what is implied authority?

A

public assumes the agent possess authority

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13
Q

what is apparent authority?

A

created when the agent exceeds express authority and the insurer does not respond

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14
Q

What does the Fair Credit Reporting Act do?

A

protects consumer privacy!! ensures any data collected remains confidential and is accurate and used for proper and specific purpose

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15
Q

What is the definition of RISK

A

uncertainty of a loss

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16
Q

what is the peril?

A

The cause of loss

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17
Q

What is a hazard?

A

something that increases the probability of loss

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18
Q

what are the three types of hazard?

A

physical, moral and morale

19
Q

What is the principle of indemnity?

A

Does not allow insured to not profit from a loss! It restores the insured to same financial condition that existed prior to loss

20
Q

When must insurable interest exist?

A

insurable interest in casualty and property insurance must exist at the time of loss

21
Q

INSURANCE CONTRACT of adhesion!

A

one party prepares the contract and presents it to the second party who must accept it on a take it or a leave it basis

22
Q

What’s the point of underwriting factors??

A

Used to determine premium! include nature of risk, hazards, claims history and other factors

23
Q

What is an occurrence?

A

AN ACCIDENT! includes continuous or repeated exposure to the same general harmful conditions

24
Q

Refund policy?

A

If an insurer cancels insurance policy before its expiration date, refund is made on a PRO RATE basis?

25
Q

What is a proximate cause?

A

Primary cause of a loss

26
Q

What characterizes a friendly fire?

A

stays within its intended boundaries

a hostile fire burns outside its intended boundaries

27
Q

What is an endorsement?

A

policy form that alters or adds to provisions of a property and casualty insurance contract

28
Q

What is the deductible??

A

Specified amount of each loss that the insured must bear. A larger deductible reduces the premium and the submission of small clams

29
Q

what is a direct loss?

A

causes damage without an intervening cause

30
Q

what is an indirect loss?

A

occurs as consequence of a direct loss

31
Q

What is covered in a NAMED PERILS policy?

A

specifically lists the covered perils! an OPEN PERILs policy covers all perils except those SPECIFICALLY excluded

32
Q

What is the definition of replacement value of property?

A

cost to replace property with property of like kind and quality at current pricing without a deduction for depreciation

33
Q

what is the ACTUAL CASH VALUE ??

A

replacement value of property minus depreciation

34
Q

what does a valued policy require?

A

requires insurance company to pay the total scheduled limit of insurance for a total loss

35
Q

What does a policy insuring policy for a SPECIFIC LIMIT insure?

A

a single item on a single policy for a single limit of insurance

36
Q

what does a policy insuring policy for SCHEDULED limit insure?

A

one or more items on a single policy and each is insured at a scheduled limit of insurance

37
Q

What does a policy insuring property for a BLANKET limit insure?

A

multiple items of property on a single policy with one limit of insurance applying to all insured property

38
Q

What does the declarations page describe?

A

basic information about the policy. WHO WHAT WHERE WHEN HOW MUCH

39
Q

What is the insuring agreement?

A

insurers promise to pay the insured

40
Q

Conditions section of the insuring agreement??

A

states obligations of the insurer and insured, and other conditions of coverage

41
Q

What does the Subrogation provision state?

A

the insured’s obligation to transferto the insurance company its right of recovery anaginst any party causing a loss after it accepts payment from the insurer for a loss

42
Q

WHat is listed in the exclusion section?

A

perils NOT covered by the policy

43
Q

what’s up with additional coverages in the insuring agreement?

A

automatically included in property policies without additional premium and include items like debris removal, collapse and fire department service charges

44
Q

what is COINSURANCE???

A

common property policy provision! requires insured to maintain a certain limit of insurance coverage in order to avoid a penalty in the event of a partial loss

Property and Casualty (5 decks)

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