Kelly Cards - General Insurance/Contract Law

Question 1

An agreement by one insurance company to indemnify another insurance company against loss to the insured on a policy

Answer 1

Reinsurance

Question 2

What is an agency principle?

Answer 2

An agent acts on behalf of another, the principal

Question 3

In an agency, who is the agent and who is the principal

Answer 3

agent is the person working at a title company and principal is the underwriter

Question 4

Who collects the title insurance premiums?

Answer 4

The agent has a fiduciary duty to collect premiums and remit to underwriters (principal).

Question 5

Why have underwriters and individual agents? Why not have one or the other?

Answer 5

Underwriters are the financial backing and the agent provides the link to the customers in the individual communities

Question 6

Authority and Powers of Agents:
An agent has actual authority to bind its principal in issuance of all title forms and policies.

Answer 6

Express Authority

Question 7

A type of authority an agent has to act for its underwriter in the correction of minor errors or to implement procedures that are not expressly detailed in the agent’s manual but is in the best interest of the underwriter.

Answer 7

Implied Authority

Question 8

An agent who exceeds the authority granted by the underwriter, which may still bind the underwriter but the UW has the right to seek reimbursement from the agent

Answer 8

Apparent Authority

Question 9

A promise supported by adequate consideration for the breach of which the law gives a remedy or the performance of which the law recognizes as a duty

Answer 9

Contract

Question 10

What are the 5 elements of a contract?

Answer 10

Offer, Acceptance, Consideration, Competent Parties, Legal Purpose

Question 11

An element of the contract that describes an expression of present contractual intent

Answer 11

Offer

Question 12

An element of the contract that is an agreement to the terms of the offer

Answer 12

Acceptance

Question 13

An element of the contract that is the price bargained for and paid for a promise

Answer 13

Consideration

Question 14

An element of the contract that the states the person signing must not be a minor and of sound mind

Answer 14

Competent Parties

Question 15

An element of the contract that states the subject of what is being insured must be permitted

Answer 15

Legal Purpose (can’t be a brothel, or other illegal operation - even if all other elements of a contract are met…the contract would then no longer be enforceable if it is not for a legal purpose

Question 16

One party to the contract has drafted the entire contract and the other party cannot modify or alter the terms

Answer 16

Contract of Adhesion