Chapter 1: General Insurance Flashcards

1
Q

What two elements are necessary for a life insurance contract to have a legal purpose?

A

Insurable interest and consent

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2
Q

What are the strategies used by underwriters to prevent adverse selection?

A

Restriction of coverage, refusal to accept a risk, and accepting a risk at a higher rate

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3
Q

Insurers are classified according to their domicile. What are the three types of insurers?

A

Domestic
Foreign
Alien

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4
Q

Wagering on a sporting event is known as what type of risk?

A

Speculative

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5
Q

When does an insurance policy go into effect?

A

When the policy is delivered and the premium is paid

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6
Q

The requirement that agents must account for and promptly remit all insurance funds collected is known as what type of agent responsibility?

A

Fiduciary

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7
Q

A situation in which a person can only experience a loss and no gain presents what type of risk?

A

Pure risk

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8
Q

What type of insurer is formed under the laws of another country?

A

Alien

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9
Q
A
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