general insurance

Question 1

STATE COMMISSIONER ( SUPERVISOR/DIRECTOR OF INSURANCE)

Answer 1

the chief insurance regulator
who protects the insuring population by regulating all insurers and insurance professionals doing
business in the State.

Question 2

stock insurance company

Answer 2

s owned by stockholders who

received taxable corporate dividends as a return of profit.

Question 3

mutual insurance company

Answer 3

is owned by the policyholders

who receive non-taxable dividends as a return of unused premium.

Question 4

Reinsurance

Answer 4

is the transfer of risk between insurance companies. The reinsurer assumes some or
all of the risk of the ceding, or primary, insurance company

Question 5

domestic insurer

Answer 5

is organized

under the laws of the resident state;

Question 6

foreign insurer

Answer 6

is organized under the laws of another state

within the United States;

Question 7

alien insurer

Answer 7

is organized under the laws of a country outside

the U.S.

Question 8

admitted insurer

Answer 8

is authorized to do insurance business in the state and is issued a Certificate
of Authority by the state’s Department of Insurance.

Question 9

underwriting department

Answer 9

of an insurance company is responsible for the selection of risks to
insure and determines the rate to be charged

Question 10

agent/producer

Answer 10

can be the employee of an insurance company that owns the agent’s book
of business, or an independent agent that enters into agency agreements with more than one
insurance company

Question 11

Law of Agency

Answer 11

is a three-party relationship where a Principal authorizes an Agent to act on
its behalf to create a legal relationship with a Third Party

Question 12

Express authority

Answer 12

is written into the producer’s agency contract;

Question 13

Fair Credit Reporting Act (FCRA)

Answer 13

protects consumer privacy by ensuring that any data
collected by an insurer remains confidential, and is accurate, relevant, and used for a proper and
specific purpose.

Question 14

risk

Answer 14

is the uncertainty of a loss

Question 15

peril

Answer 15

is the cause of loss

Question 16

hazard

Answer 16

increases the probability of a loss. The 3 types of hazards are physical, moral, and
morale.

Question 17

principle of indemnity

Answer 17

does not allow the insured to profit from a loss; instead, it restores
the insured to the same financial or economic condition that existed prior to the loss.

Question 18

Insurable interest

Answer 18

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

Question 19

insurance contract

Answer 19

is one of adhesion; one party (the insurer) prepares the contract and
presents it to the second party (the insured), who must accept it on a “take-it-or-leave-it” basis

Question 20

underwriting factors

Answer 20

used to determine premium include the nature of the risk,hazards,claims history, and other factors that vary depending upon the risk

Question 21

implied authority

Answer 21

is that which

the public assumes the agent possesses;

Question 22

apparent authority

Answer 22

created when the agent

exceeds express authority and the insurer does not respond