Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

PNC Flash Cards > PNC Terms & Definitions > Flashcards

PNC Terms & Definitions Flashcards

1
Q

Insurance

A

Is the transfer of risk of loss

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Risk

A

Is the uncertainty or chance of loss occurring

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What are the 2 types of risk?

A

Pure and speculative risks

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Pure risk

A

Is loss or nothing, no chance of gain, only pure risks are insurable

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Speculative

A

Loss or gain for EX: gambling

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

What are 5 ways to handle risks

A

STARR
Sharing, Transfer, Avoidance, Reduction, Retention

EX: I’m a starr at handling risks

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Exposure

A

The unit of measurement to determine rates for an insured based on how risky they are

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Hazards

A

Increases the chances of the risk occurring

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

What are the three types of hazards?

A

Physical, Moral & Morale

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Physical hazards

A

Are material and structural things you can see & touch

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Moral hazards

A

Is lying on purpose
EX: lying on the insurance application

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Morale hazards

A

Is a sense of carelessness

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Loss

A

Is the reduction or disappearance of value

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Peril

A

Is the cause of loss like a fire or accident

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

The Law of Large #’s

A

Says the more stats you have to look at, the more predictable losses will be

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Reinsurance

A

Is when a company indemnifies another. Indemnify is to make whole again after a loss

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Certificates of Authority

A

Allows insurer to sell in that state making them admitted and authorized

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Stock companies

A

Are owned by shareholders, issue non-participating policies & DIVIDENDS ARE TAXED

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Mutual Companies

A

Are owned by policy holders, issue participating policies, & DIVIDENDS ARE NOT TAXED

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Domestic

A

Insurer is a state they are incorporated (headquartered & selling) Hint: 1 state

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

Foreign

A

Insurer is a state where they are not headquartered, but they are selling
Hint: 2 states

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

Alien

A

Is completed outside of the U.S.
Hint: Country

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

Law of Agency

A

Agent represents the insurer & the Knowledge of the insurer

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

What are the 3 types of agent authority?

A

Express, Implied, & Apparent

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

Express

A

Is written/contract

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

Implied

A

Is assumed by insurer

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

Apparent (perceived)

A

Is assumed by customer
(Business cards/letterhead/stationary)

28
Q

Fiduciary responsibility

A

= agent submits premium collected to the insurance company

29
Q

What are the 4 elements of a legal contract?

A

Agreement, offer, acceptance, consideration

30
Q

Agreement

A

Known as offer and acceptance

31
Q

Acceptance

A

Insurer issues a policy

32
Q

Consideration

A

Both parties bring something of value

33
Q

Consideration on the side of the insured

A

Application + premium

34
Q

Consideration on the side of the insurer

A

Promise to pay

35
Q

Competent parties

A

Not under the influence of drugs or alcohol, sound mind, legal age (felons are ok)

36
Q

Legal purpose

A

Cannot be against public policy/break the law

37
Q

Adhesion

A

Insurer writes the policy, customer either takes it or leaves it

38
Q

Aleatory

A

Unequal exchange (customer pays small monthly premium, insurer pays very large claim)

39
Q

Personal

A

Between the customer and the insurer

40
Q

Unilateral

A

One sided promise, only the insurer is legally bound to do anything

41
Q

Conditional

A

Both parties have rules/duties they must follow/do

42
Q

Reasonable expectations

A

A customer can expect the coverage if an agent implied it during the sale

43
Q

Representations

A

Statements that are believed to be true but are not guaranteed to be true

44
Q

Misrepresentation

A

An untrue statement

45
Q

Warranty

A

Absolutely true statements

46
Q

Concealment

A

With holding or hiding in the application

47
Q

Fraud

A

Deceive or lying to cheat the insurance company

48
Q

Insurance is the transfer of ___?

A

Risk

49
Q

Peril is the cause of ___?

A

Loss

50
Q

All of the following are examples of a peril EXCEPT?
A) Hail
B) Wet side walk
C) Lightning striking a tree
D) Wind

A

Wet side walk

51
Q

Which of the following is an example of a hazard?
A) Lightening
B) Fire
C) Slippery Floor
D) Flood

A

C) Slippery Floor

52
Q

An example of a moral hazard is ___?
A) incorrect electrical wiring
B) Not fixing leaking water pipes
C) Lying on the insurance application
D) being careless

A

C)

53
Q

What type of hazard does a person behaves indifferently or carelessly represent?

A

Morale Hazard

54
Q

Which law states that the more statistics you have to look at, the more predictable losses will be?

A

Law of large numbers

55
Q

To indemnify means to?

A

Restore the insured to their previous financial condition before loss

56
Q

What allows an insurer to sell in a specific state, making them admitted and authorized?

A

Certificate of authority

57
Q

Stock companies are owned by ___?

A

Shareholders

58
Q

Which of the following refers to an insurance company that has been formed under the laws of this (one) State?

A

Domestic

59
Q

A foreign insurer is a state where they are ___?

A

Not headquartered and selling

60
Q

The three types of agent authority are ____, ____ and ____?

A

Express, implied, apparent

61
Q

What does consideration mean in a legal contract?

A

Both parties bring something of value to

62
Q

A competent party excludes all options excepts ___?

A) someone under the influence of alcohol
B) a felon
C) a 12 year old girl
D) someone under the influence of drugs

A

B) A felon

63
Q

Which term refers to unequal exchange?

A

Aleatory

64
Q

What is meant by conditional?

A

Both parties have duties they need to follow

65
Q

Which definition describes the term representation best?

A

Statements that are believed to be true but are not guaranteed to be true

66
Q

Which statement refers to an absolutely true statement?

A

Warranty

PNC Flash Cards (2 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2025 Bold Learning Solutions. Terms and Conditions