Chapter 1: General Insurance Flashcards
What two elements are necessary for a life insurance contract to have a legal purpose?
Insurable interest and consent
What are the strategies used by underwriters to prevent adverse selection?
Restriction of coverage, refusal to accept a risk, and accepting a risk at a higher rate
Insurers are classified according to their domicile. What are the three types of insurers?
Domestic
Foreign
Alien
Wagering on a sporting event is known as what type of risk?
Speculative
When does an insurance policy go into effect?
When the policy is delivered and the premium is paid
The requirement that agents must account for and promptly remit all insurance funds collected is known as what type of agent responsibility?
Fiduciary
A situation in which a person can only experience a loss and no gain presents what type of risk?
Pure risk
What type of insurer is formed under the laws of another country?
Alien