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Insurance > General Insurance > Flashcards

General Insurance Flashcards

1
Q

Agent/Producer

A

A legal representative of an insurance company. Producer includes agents and brokers. Agents are agents of the insurer

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2
Q

Applicant or proposed insured

A

Someone applying for insurance

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3
Q

Broker

A

An insurance producer not appointed by the insurer and is deemed to represent the client.

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4
Q

Insurance policy

A

A contract between a policyowner and an insurance company which agrees to pay the insured or the beneficiary for loss caused by specific events

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5
Q

Insured

A

The person covered by the insurance policy. This person may or may not be the policy owner.

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6
Q

Insurer/Principal

A

The company that issues the policy

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7
Q

Policyowner

A

The person entitled to exercise the rights and privileges in the policy.

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8
Q

Premium

A

The money paid to the company for the policy

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9
Q

Reciprocity/reciprocal

A

A mutual interchange of rights and privileges

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10
Q

What costs less Term or Whole life?

A

Term

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11
Q

What can you take a loan from term or whole life?

A

Whole life

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12
Q

When does an insurance policy go into effect?

A

When the policy is delivered and the premium is paid

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13
Q

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

A

Certificate of authority

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14
Q

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

A

Peril

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15
Q

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

A

Alien

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16
Q

What entities make up the medical information bureau?

A

Insurers

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17
Q

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

A

Mutual

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18
Q

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

A

When it’s intentional and material

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19
Q

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

A

Speculative

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20
Q

If an applicant does not receive his or her insurance policy, who would be held responsible?

A

The agent

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21
Q

An insurance co is domiciled in California and transacts insurance in Nevada. What is the insurers classification in Nevada?

A

Foreign

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22
Q

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

A

Moral

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23
Q

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

A

The agents

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24
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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25
Q

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

A

When the application is submitted

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26
Q

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

A

Foreign

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27
Q

What type of risk is insurable?

A

Pure

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28
Q

Who owns stock companies?

A

Stockholders

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29
Q

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

A

Insurance

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30
Q

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

A

Stock company

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31
Q

The type of co that is organized to return surplus $ to the policyholders?

A

Mutual company

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32
Q

4 elements of an ins contract

A

Agreement (offer and acceptance), consideration, competent parties, and legal purpose

33
Q

LACC

A

Legal purpose
Agreement (offer and acceptance)
Consideration
Competent parties

34
Q

What type of report provides info about the applicants hobbies habits and financial status?

A

Inspection report

35
Q

2 elements necessary for a life ins policy to have legal purpose

A

Insurable interest and consent

36
Q

If an insurer meets the states financial requirements and is approved to transact business in the state it is considered what type of insurer?

A

Authorized

37
Q

Five characteristics of an ideally insurable risk

A

Loss must be

  1. Due to chance
  2. Definite and measurable
  3. Statistically predictable
  4. Not catastrophic
  5. Coverage cannot be mandatory
38
Q

What is the best way to handle incomplete applications?

A

Send it back to the applicant to finish it

39
Q

Situation where the person can only experience loss and no gain is what type of risk?

A

Pure

40
Q

What is a warranty in an insurance contract?

A

An absolutely true statement upon which the validity of the insurance contract is based

41
Q

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

A

Loss

42
Q

What are the three type of hazards?

A

Physical, moral, and morale

43
Q

3 types of agent authority

A

Express, implied and apparent

44
Q

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

A

Insurer

45
Q

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

A

Hazards

46
Q

For the purpose of insurance, what is risk?

A

Uncertainty of loss

47
Q

If the agent fails to obtain a signature on the application what should he do?

A

Send it back for a signature

48
Q

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

A

Adverse selection

49
Q

What is the term for causes of loss?

A

Peril

50
Q

Strategies used by underwriters to prevent adverse selection

A

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

51
Q

When a change needs to be made on an application what should be done?

A

Start a new application or initial where the changes are

52
Q

When is the offer usually made on the contract?

A

When the application is submitted

53
Q

What are the three types of insurers by domicile?

A

Domestic, foreign, and alien

54
Q

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

A

The insurer

55
Q

Whom does an insurance agent represent?

A

The company

56
Q

According to the law of agency, a principal is represented by whom?

A

Agent or producer

57
Q

Insurance is a contract that protects the insured from what?

A

Loss

58
Q

An applicant conceals relevant health information on the application, this is what type of hazard?

A

Moral

59
Q

A person who doesn’t lock their doors and shows an indifferent attitude is what type of hazard?

A

Morale

60
Q

Who manages a reciprocal insurance company?

A

Attorney in fact

61
Q

Can a producer be personally viable if they violate the producers contract?

A

Yes

62
Q

Are independent producers insurance company employees?

A

No

63
Q

What authority does the producer have that is written into their contract?

A

Express authority

64
Q

Does consideration on a policy need to be equal?

A

No

65
Q

Principle of indemnity

A

Purpose of insurance is to restore the insured to the same position before the loss occurred

66
Q

Warranty

A

sworn statement guaranteed to be true

67
Q

What 2 Perils does health insurance cover?

A

Accident and sickness

68
Q

Nonoccupational vs Occupational

A

Occupational covers on and off the job. Non is off the job only

69
Q

Hospital indemnity pays a stated or variable amount?

A

Stated amount

70
Q

Blanket disability policy written for

A

passengers on common carrier, employee group, student group, debtor group, sports team

71
Q

What increases the chance of loss?

A

Hazard

72
Q

What is a cause of loss?

A

Peril such as a fire

73
Q

Law of large numbers allows insurers to predict claims

A

More accurately

74
Q

Will insurers buy insurance to protect themselves?

A

Yes

75
Q

Are insurance laws uniform from one state to the next?

A

No

76
Q

Are dividends from stock insurers guaranteed?

A

No

77
Q

An unincorporated association of individuals who insure each other

A

Reciprocal insurer

78
Q

The government offers insurance based on

A

Social needs like flood insurance and workers comp but not for the purpose of preventing fraud

79
Q

A foreign company has their office where

A

Another state

Insurance (17 decks)

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