Chapter 1 - General Insurance Flashcards
Who manufactures and sells insurance coverage by way of insurance policies or contracts?
Insurers (insurance companies or carriers)
Independent agencies or organizations that recruit, contract with, and support sales agents and producers are…
a. Insurers
b. Insurance Agencies
c. Insurance Producers
d. Brokers
b. Insurance Agencies
Licensed individuals that represent an insurance company when transacting insurance are ___?
a. Insurance Brokers
b. Insurance Producers
c. Insurers
d. Bailors/Bailees
b. Insurance Producers
**also known as Insurance Agents
A(n) _____ is the person or entity that buys insurance for protection from loss of life, health, property or liability.
a. Agent
b. Bailor
c. Broker
d. Insured
e. Insurer
d. Insured
The National Association of Insurance Commissioners (NAIC) consists of…
all State and territorial insurance commissioners or regulators. The NAIC provides resources, research, legislative and regulatory recommendations and interpretations for state insurance regulators. The association promotes uniformity among states and members may accept or reject recommendations. The NAIC has no legal authority to enact or enforce insurance laws.
The Federal Insurance Office (FIO) was established by the…
Dodd-Frank Wall Street Reform and Consumer Protection Act. This office monitors the insurance industry and identifies issues and gaps in the state regulation of insurers. It also monitors access to affordable insurance by traditionally underserved communities and consumers, minorities, and low- and moderate-income persons. The FIO is not a regulator or supervisor. Insurance is primarily regulated by the individual States.
The insurance industry is primarily regulated at the ______ level?
a. National
b. Territorial
c. State
d. Federal
c. State
***The legislative branch writes and passes state insurance laws, or statutes, to protect the insuring public. The judicial branch is responsible for interpreting and determining the constitutionality of the statutes. The role of a state’s executive branch is to enforce the existing statutes that have been put in place. The Commissioner, Director, or Superintendent of Insurance is typically appointed by the Governor, and the Commissioner has the power to issue rules and regulations to help enforce these statutes.
The ___________________ act of ____ determined the federal government can not regulate insurance in areas over which states have the authority to do so.
a. Frank Wall Street Reform and Consumer Protection Act
b. Unlawful Organization of Insurance Act of 1977
c. McCarren-Ferguson Act of 1945
d. I don’t know what I’m doing Act of 2022
c. McCarren-Ferguson Act of 1945
*** Congress created federal agencies to provide regulatory oversight impacting insurance practices. Government insurers step in (as a last resort) when private insurers are unable to provide protection relative to the catastrophic nature or unpredictability of a risk.
Most insurance is written by _____ insurers.
a. Public
b. Private
c. Foreign
d. Governmental
b. Private
Which insurers step in to offer an insurance alternative when private insurers are unable to provide protection?
a. Foreign
b. Governmental-based
c. Public
d. who what
b. Governmental-based
***This usually relates to the catastrophic nature of the risk, capacity to handle the risk, and lack of desire to engage in a line of insurance where experience to evaluate necessary premium intake to offset potential loss is lacking.
A ____ insurance company is owned by stockholders or shareholders.
a. Mutual
b. Reciprocal
c. Stock
d. Fraternal Benefits Society
c. Stock
***Directors and officers direct the company operations and are elected by stockholders. Stockholders receive taxable corporate dividends as a return of profit when declared by the Directors.
A _____ insurance company is owned by the policyholders.
a. Mutual
b. Stock
c. Independent
d. Fraternal Benefits Society
a. Mutual
***may be referred to as members, a Board of Trustees or Directors directs the company operations and is elected by policyholders. Policyholders receive non-taxable dividends as a return of unused premium when declared by the directors.
Name the EC Perils for DP-1
endorsed coverages
WC SHAVER: Windstorm Civil Commotion Smoke Hail Aircraft/Vehicles Volcanic Eruption Explosion (broadens to internal and external) Riot
On a DP-2 the dwelling and other structures losses are paid on a _______ basis.
a. Actual Cash Value
b. Replacement Cost
b. Replacement Cost
DP-2 Broad Form - Named Covered Perils
B.B. Bice - GOLF
B ursting of heating systems
B urglary damage
B reaking of water heaters
I ce, snow, or sleet weight
C ollapse of building or part of a building
E lectrical damage (artificially generated)
G lass breakage
O bjects falling from outside
L eakage of water or steam damage
F reezing of plumbing (if measures were taken to keep house warm)
