Lesson One

Question 1

Agent

Answer 1

Represents the Insurance Company

Question 2

Broker

Answer 2

Represents the Consumer

Question 3

Life only agent

Answer 3

represents the insurer

Question 4

Health only agent

Answer 4

Represents the insurer

Question 5

Direct System

Answer 5

Also known as Direct Writer. Advertises directly through Radio, TV, and internet

Question 6

Life and Health Agent

Answer 6

Represents the insurer

Question 7

Insured

Answer 7

Client (1st party)- YOU : Party who accepts the contract and receives the coverage

Question 8

Contract

Answer 8

The Insurance Policy

Question 9

Insurance Agent (PC License)

Answer 9

Represents the insurer

Question 10

Insurer

Answer 10

Insurance Company (2nd party)- Party Who makes the contract and provides the coverage

Question 11

Claimant

Answer 11

A claimant is the person making a claim for payment from an insurance company.

Question 12

CIC

Answer 12

Certified Insurance Counselors. Insurance law (written by the state legislature)

Question 13

CCR

Answer 13

Covenants, Conditions, Restrictions Insurance Rules (written by the commissioner, who can change/withdraw regulations).

Question 14

Commissioner:

Answer 14

Elected by the people to serve a four year term.

-If commissioner leaves office during the 4 year term, governor will appoint someone to finish the term.

Question 15

McCarran Ferguson Act

Answer 15

Gave the states the right to regulate the majority of the insurance industry at the state level (CDI)

*State Rights

Question 16

Domicile

Answer 16

Address

Question 17

Domestic

Answer 17

Insurer is one incorporated under the laws of California

Question 18

Foreign

Answer 18

Insurer is one incorporated under the laws of any state, other than CA (Arizona)

Question 19

Alien

Answer 19

Insurer is one incorporated under the laws of any country outside the United States (Canada)

Question 20

Express Authority

Answer 20

An authority that’s written in the contract -SPECIFIC

Question 21

Implied Authority

Answer 21

An authority you have that’s NOT specifically written in the contract but is reasonable for the public to assume you have

Question 22

Apparent Authority

Answer 22

Authority of an agent that is created when the agent oversteps actual authority, and when inaction by the insurer does nothing to counter the public impression that such authority exists.

Question 23

Stock company

Answer 23

Stock holders
Non-participating policies
Dividends to a stockholder are taxable
Dividends are not guaranteed

Question 24

Mutual company

Answer 24

Participating policies
Policyholder
Dividends not taxable
Dividends are not guaranteed

Question 25

Reciprocal insurers

Answer 25

Owned by The company’s policy holders
I’m a reciprocal insurer, each policyholder insures the risk of the other policyholders.
Reciprocal Insurers are managed by an ATTORNEY IN FACt.