General Insurance

Question 1

Party covered by an insurance policy

Answer 1

INSURED

Question 2

Person that pays for the policy and can make changes to it

Answer 2

POLICYOWNER

Question 3

Person who sells, solicits and markets insurance for the insurer

Answer 3

Producer

Question 4

Employee of the insurance company who checks application, issues policy and sets premiums prices

Answer 4

Underwriter

Question 5

When financial loss is the only outcome and there is no chance for financial gain

Answer 5

Pure risk

Question 6

Examples of pure risk

Answer 6

Things out of policy owner’s control…

Accidents, sickness, fire, disabilities

Question 7

Risk where there is a chance of financial gain

Answer 7

Speculative Risk

Question 8

Speculative Risk examples

Answer 8

Gambling, investing in stocks, Realestate, commodities

Question 9

Unit of measurement determining how prone a risk is

Answer 9

Exposure

Question 10

Hazards that can be physically touch

Answer 10

Physical hazard

Question 11

When insured is dishonest, it is a

Answer 11

Moral hazard

Question 12

Hazards that pertain to state of mind

Answer 12

Morale hazard

Question 13

What is the name for the case of loss as pertains to insurance

Answer 13

PERILS

Question 14

Methods of handling risk

Answer 14

Avoidance, Retention, Sharing, Reduction, Transfer

Question 15

What is AVOIDANCE as pertains to insurance

Answer 15

Avoiding activity entirely

Question 16

What is RETENTION?

Answer 16

Insured retains portion of risk

Question 17

Examples of retention

Answer 17

High deductible
Copayment
Self insurance

Question 18

What is an example of transfer of risk

Answer 18

Insurance

Question 19

Example of REDUCTION as pertains to insurance

Answer 19

Lower the chance of loss through maintenance

Question 20

What is SHARING

Answer 20

Splitting up risk into many parts

Question 21

Elements of pure risk

Answer 21

Loss must be definite and measurable

Loss must not be catastrophic

Insurance must not be mandatory

Loss must be due to chance

Loss must be predictable to insurer

Question 22

What is ADVERSE SELECTION

Answer 22

High risk people

Question 23

Dividend

Answer 23

Return of excess premium

Question 24

Types of insurers

Answer 24

Stock - NON-Participating

Mutual - PARTICIPATING

FRATERNAL

RECIPROCAL

LLOYD’s ASSOCIATION

RISK RETENTION & purchasing groups

Self insurer

Surplus Lines

Question 25

Domestic insurer

Answer 25

Admitted insurer.

Question 26

Elements of a legal contract

Answer 26

Offer and acceptance

Consideration

Competent parties

Legal purpose

Question 27

Adhesion

Answer 27

Non negotiable

Question 28

Aleatory

Answer 28

Unequal

Question 29

Insurance contracts are one sided or…

Answer 29

Unilateral

Question 30

An insurance company (Blue Cross Blue Shield, State Farm, Americo) is the …

Answer 30

INSURER