General Insurance ( Ethics and Code) Flashcards
Is acupuncture regulated under the jurisdiction of the department of insurance?
No
In which business of insurance is conducted by agents directly employed by the insurer?
Direct response marketing system
Which business of insurance is done through the internet/ mail?
Direct response system
Which system - Agent do not personally meet with applicants during any point of the process ?
In a direct response system
What does transacting insurance include ?
Solicitation , negotiation , and execution of a contract of insurance
Transacting insurance without a license is considered a ….
Misdemeanor , punishable by a fine not exceeding 50,000 and / or up to 1 year in jail.
The filing of an agents appointment is responsibility of ?
The Insurer
A broker is …
A person who on behalf of another person transacts the insurance with an insurer.
An insurance solicitor is…
A natural person employed to aid the agent/ broker in transacting the insurance
A solicitor may represent more than …
1 agent/ broker
Solicitors can only be employed by ….
property / casualty agents / brokers
Solicitors are not allowed to be used in the …
Life and health industry
When a partnership is dissolved =
No longer can hold a license
Definition of Insolvency
Inability to pay one’s debt’s
A loss exposure is a condition in which …
could result in a loss
Someone who has been found to have misinterpreted themselves on a health insurance application is a….
Moral hazard
There are two types of risk -
Pure risk and speculative risk
The law of large number
States that the greater the number of similar risks the easier it is for insurers to predict future losses
Doctrine of adhesion
id a policy is vague it is usually ruled in favor of being insured . if the insurer wanted those words interpreted differently - then they should have written a contract to be less ambiguous
Insurance license is renewed when…
renewal application is filed and the fee is paid
Insurers and agents are required to keep records related to claims under …
CIC File and Record documentation rule.
Information related to claims records that have occurred in the current year - as well as previous (4) years
Must be maintained and may be inspected by the commissioner as necessary
California Insurance Code -
- Parties between who the contract is made
- Property or life insured
- Interest of the insured in property insured *if he is not the absolute owner thereof
- The risk insured against
-Period during which the insurance is to continue
Either * Statement of the premium or/ If the insurance is of a character where the exact premium is only determinable upon the termination of the contract, a statement of the basis/ rates upon which the final premium is to be determined and paid
Providing false information on an insurance application is a violation of state law … it is not a violation under which section?
Section 1033 of the U.S code (which is federal law) - Section 1033 addresses crimes committed by persons engaged in the business of insurance whose activities affect the interstate commerce
Section 1033 of the United States code states …
maximum imprisonment can be either 10-15 years for violation of insurance law related to interstate commerce
Insurers have 4 major operating divisions
Marketing
Underwriting
Claims
Actuarial
An insurance agent/ broker must include in their website the following -
Name- as it appears on the license / as well as any other fictitious name approved by the commissioner
State of their domicile and principal place of business
License Number
Law of large numbers
the more similar risks the insurance company combines together , the better they can guess approximately how many losses they will have given in the time period
A speculative risk
Risk situation that includes a chance of loss and a potential for gain - speculative risks are not insurable
The following information does not need to be communicated in a contract
- known information
- information that should be known
- information which the other party waives
- information that is not material to the risk
