General Insurance Chapter 1 Flashcards
All of the following are types of agent authority except
A. express authority
B. apparent authority
C. dubious authority
D. implied authority
C
In insurance,
A. contracts made by the agent are considered to be contracts of the producer
B. contracts made by the principal are considered to be contracts of the agent
C. the producer is the principal and the insurer is the agent
D. the insurer is the principal and the producer is the agent
D
The license an insurer usually needs to sell insurance in a state is called
A. a certificate of insurance
B. a certificate of authority
C. a certificate of approval
D. a certificate of qualifications
B
When a reinsurer considers each risk as a single transaction before assuming it, this is called
A. a facultative reinsurance
B. treaty reinsurance
C. transactional reinsurance
D. discretionary reinsurance
A
Bonita’s written contract with the insurance company she represents specifically addresses issues such as her duties in collecting premium payments. This is an example of
A. apparent authority
B. express authority
C. ambiguous authority
D. implied authority
B
If an agent fails to perform an act required by a policy, the insurer
A. is still required to fulfill its obligation
B. may release the agent and write a new contract with the policyholder
C. is exempt from fulfilling its obligation to the policyholder
D. has 60 days to notify the policyholder of the omission
A
A mutual insurer is owned by its
A. stakeholders
B. stockholders
C. policyholders
D. directors
C
A producer who receives life insurance premiums holds the money in trust as
A. in investor
B. a fiduciary
C. a banker
D. a broker
B
An insurer that issues participating policies is
A. a fraternal insurer
B. a stock insurer
C. a policy insurer
D. a mutual insurer
D
An incorporated insurer whose governing body is elected by the policyowners is
A. a reciprocal insurer
B. a combination insurer
C. a mutual company
D. a stock company
C
All of the following are types of hazards in life insurance except
A. direct
B. moral
C. physical
D. morale
A
An insurance company formed under the laws of any country other than the United States would be considered
A. a foreign insurance company
B. an alien insurance company
C. a nonadmitted insurance company
D. a domestic insurance company
B
Miguel works for a mutual insurance company that was formed to handle the insurance needs of lawyers. The type of company that Miguel works for is called
A. a reinsurer
B. a fraternal benefit society
C. a reciprocal insurer
D. a risk retention group
D
After comparing policies for the last 3 months, Carol has finally found a health insurance policy that she would like to purchase. When Carol submits the application with the initial premium,
A. Carol cannot rescind the offer once made
B. the insurance company can make an offer by issuing the policy
C. Carol has made an offer that the insurance company can accept or reject
D. the insurance company cannot make a counteroffer
C
Which of the following activities is not an example of misrepresentation?
A. a producer tells a prospect that the insurer has a higher a.m. best rating than it actually has
B. a producer tells a prospect that the policy has received a certain level of dividends for the past 5 years
C. an insurer advertises a life insurance policy as a retirement savings plan
D. a producer participates in twisting
B
