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NYS Life and Health Insurance > General Insurance > Flashcards

General Insurance Flashcards

1
Q

What are the three types of agent authority?

A
  • Express
  • Implied
  • Apparent
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2
Q

If an insurer needs to obtain information about the applicant from investigators, what is the insurer required to do?

A

Provide the applicant a Disclosure Authorization Notice

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3
Q

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

A
  • Insurable Interest

- Consent

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4
Q

In forming an insurance contract, when does acceptance usually occur?

A

When the insurer approves a prepaid application

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5
Q

What document is required for an insurance company to transact insurance?

A

Certificate of Authority

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6
Q

What is the best way to handle incomplete insurance applications?

A

Return the application to the applicant for completion

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7
Q

What law is the foundation of the statistical prediction of loss upon which rates for insurance are calculated?

A

Law of large number

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8
Q

If an applicant does not review their insurance policy, who would be held responsible?

A

The agent

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9
Q

An insurance company that is formed under the laws of another state is known as what type of insurer?

A

Foreign

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10
Q

What type of report provides information about the applicant’s hobbies, habits, and financial status?

A

Inspection Report

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11
Q

A state-issued document empowering an insurance company to become an admitted insurer is called what?

A

Certificate of Authority

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12
Q

In the agent/insurer relationship, who is considered the principal?

A

Insurer

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13
Q

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

A
  • Domestic
  • Foreign
  • Alien
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14
Q

The insurer organized to return a profit to the stockholders is what type of insurer?

A

Stock company

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15
Q

What entities make up the Medical Information Bureau?

A

Insurers

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16
Q

When does an insurance policy go into effect?

A

When the policy is delivered and the premium is paid

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17
Q

When agents act within the scope of their contract, their actions will be assumed to be the acts of whom?

A

Insurer

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18
Q

What is the term for the causes of loss insured against in an insurance policy?

A

Peril

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19
Q

Insurance is used to transfer what to the insurance company?

A

Financial responsibility for loss

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20
Q

What type of insurer is a voluntarily formed organization that provides insurance benefits for members of an afflicted lodge or religious organization with a representative form of government?

A

Fraternal Insurer

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21
Q

The type of insurance company organized to return any surplus to its policy is known as what?

A

Mutual company

22
Q

For the purpose of insurance, what is risk?

A

Uncertainty of loss

23
Q

If an agent fails to obtain the applicant’s signature on the insurance application, what must the insurer do?

A

Send the application back to the applicant for signature

24
Q

In order to transact insurance with a given state, an alien insurer must first obtain what?

A

Certificate of Authority

25
Q

Whose responsibility is it to determine that all the questions on an insurance application are answered?

A

The agent’s

26
Q

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

A

Pure risk

27
Q

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

A

Alien

28
Q

What are the strategies used by underwriters to prevent adverse selection? 3

A
  • Restriction of coverage
  • Refusal to accept a risk
  • Accepting a risk at a higher rate
29
Q

Insurance is a contract that protects the insured from what?

A

Loss

30
Q

When risks with higher probability of loss are seeking insurance more often than other risks, this is known as what?

A

Adverse selection

31
Q

An insurance policy paid a nontaxable dividend to the insured one year, and nothing the next. From what type of insurer did the insured purchase a policy?

A

Mutual

32
Q

A person who does not lock the doors to their house shows an indifferent attitude. The person presents what type of hazard?

A

Morale

33
Q

The reduction, decrease, or disappearance of value of the person or property insured in a policy is known as what?

A

Loss

34
Q

What do individuals use to transfer their risk of loss to a larger group?

A

Insurance

35
Q

What is the name of the process that insurance companies use to determine whether or not an applicant is insurable?

A

Underwriting

36
Q

Whom does an insurance agent represent?

A

Insurance company

37
Q

When would a misrepresentation on an insurance application be considered fraud?

A

When it is intentional and material

38
Q

What type of risk is insurable?

A

Pure

39
Q

An insurance company is domiciled in California and transacts insurance in Nevada. What is the insurer’s classification in Nevada?

A

Foreign

40
Q

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

A

Speculative

41
Q

When a change needs to be made on the application for insurance, which is the best method for correction the information?

A

Complete a new application or ask the applicant to initial the correction on the original application

42
Q

An applicant conceals relevant health information on the application. The applicant presents what type of hazard?

A

Moral

43
Q

What law protects consumers from the circulation of inaccurate or obsolete information?

A

The Fair Credit Reporting Act

44
Q

What are the five characteristics of an ideally insurable risk?

A

Loss must be:

  • Due to chance
  • Definite and measurable
  • Statistically predictable
  • Not catastrophic
  • Coverage cannot be mandatory
45
Q

What are the four elements of an insurance contract?

A
  • Agreement (offer and acceptance
  • Consideration
  • Competent parties
  • Legal purpose
46
Q

In insurance, when is the offer usually made on a contract?

A

When the insurance application is submitted

47
Q

What are the three types of hazards?

A
  • Physical
  • Moral
  • Morale
48
Q

According to the Law of Agency, a principal is represented by whom?

A

Agent or producer

49
Q

Who owns stock companies?

A

Stockholders

50
Q

Conditions that increase the chance of a loss are known as what?

A

Hazards

NYS Life and Health Insurance (2 decks)

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