General Insurance ( Ethics and Code)

Question 1

Is acupuncture regulated under the jurisdiction of the department of insurance?

Answer 1

No

Question 2

In which business of insurance is conducted by agents directly employed by the insurer?

Answer 2

Direct response marketing system

Question 3

Which business of insurance is done through the internet/ mail?

Answer 3

Direct response system

Question 4

Which system - Agent do not personally meet with applicants during any point of the process ?

Answer 4

In a direct response system

Question 5

What does transacting insurance include ?

Answer 5

Solicitation , negotiation , and execution of a contract of insurance

Question 6

Transacting insurance without a license is considered a ….

Answer 6

Misdemeanor , punishable by a fine not exceeding 50,000 and / or up to 1 year in jail.

Question 7

The filing of an agents appointment is responsibility of ?

Answer 7

The Insurer

Question 8

A broker is …

Answer 8

A person who on behalf of another person transacts the insurance with an insurer.

Question 9

An insurance solicitor is…

Answer 9

A natural person employed to aid the agent/ broker in transacting the insurance

Question 10

A solicitor may represent more than …

Answer 10

1 agent/ broker

Question 11

Solicitors can only be employed by ….

Answer 11

property / casualty agents / brokers

Question 12

Solicitors are not allowed to be used in the …

Answer 12

Life and health industry

Question 13

When a partnership is dissolved =

Answer 13

No longer can hold a license

Question 14

Definition of Insolvency

Answer 14

Inability to pay one’s debt’s

Question 15

A loss exposure is a condition in which …

Answer 15

could result in a loss

Question 16

Someone who has been found to have misinterpreted themselves on a health insurance application is a….

Answer 16

Moral hazard

Question 17

There are two types of risk -

Answer 17

Pure risk and speculative risk

Question 18

The law of large number

Answer 18

States that the greater the number of similar risks the easier it is for insurers to predict future losses

Question 19

Doctrine of adhesion

Answer 19

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

Question 20

Insurance license is renewed when…

Answer 20

renewal application is filed and the fee is paid

Question 21

Insurers and agents are required to keep records related to claims under …

Answer 21

CIC File and Record documentation rule.

Question 22

Information related to claims records that have occurred in the current year - as well as previous (4) years

Answer 22

Must be maintained and may be inspected by the commissioner as necessary

Question 23

California Insurance Code -

Answer 23

• 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

Question 24

Providing false information on an insurance application is a violation of state law … it is not a violation under which section?

Answer 24

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

Question 25

Section 1033 of the United States code states …

Answer 25

maximum imprisonment can be either 10-15 years for violation of insurance law related to interstate commerce

Question 26

Insurers have 4 major operating divisions

Answer 26

Marketing
Underwriting
Claims
Actuarial

Question 27

An insurance agent/ broker must include in their website the following -

Answer 27

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

Question 28

Law of large numbers

Answer 28

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

Question 29

A speculative risk

Answer 29

Risk situation that includes a chance of loss and a potential for gain - speculative risks are not insurable

Question 30

The following information does not need to be communicated in a contract

Answer 30

• known information
• information that should be known
• information which the other party waives
• information that is not material to the risk