Quiz #4

Question 1

A request by an insured for insurance

1. Receipt
2. Ticket
3. Application
4. Policy

Answer 1

3.

Application

Question 2

The cost of putting business on the books and acquiring the premium

1. Total premium
2. Pure premium
3. Expense loading
4. Acquisition cost

Answer 2

4.

Acquisition cost

Question 3

How often losses are likely to occur in the future

1. Severity of loss
2. Size of loss
3. Frequency of loss
4. Amount of loss

Answer 3

3.

Frequency of loss

Question 4

The capacity to confirm to people who have submitted insurance applications that they have insurance coverage

1. Law of agency
2. Binding authority
3. Rapport
4. Trust

Answer 4

2.

Binding authority

Question 5

A system in which independent insurance professionals, licensed as insurance brokers, are contracted to sell insurance on behalf of an insurer or multiple insurers

1. Direct writer
2. Exclusive agency system
3. Independent agency system
4. Independent brokerage system

Answer 5

4.

Independent brokerage system

Question 6

A pricing method in which an insurer uses rates that are based on its own experience rather than on that of a specific group for which it is calculating a premium

1. Automatic rating
2. Continuous rating
3. Manual rating
4. Retained rating

Answer 6

3.

Manual rating

Question 7

The person or firm requesting insurance

1. Insurer
2. Applicant
3. Third party
4. Second party

Answer 7

2.

Applicant

Question 8

An account used to hold funds for the day-to-day operation of a business

1. Trust account
2. Operating account
3. Savings account
4. Checking account

Answer 8

2.

Operating account

Question 9

One who is appointed by a company in a specific territory. He or she is usually given an exclusive territory and may appoint sub-agents in that territory

1. Direct writer
2. Independent agency system
3. Exclusive agency system
4. General agent

Answer 9

4.

General agent

Question 10

The basis of premium calculation for the insurance provided for the exposure

1. Premium
2. Rate
3. Deductible
4. Loss

Answer 10

2.

Rate

Question 11

The process of revealing all relevant facts

1. Disclosure
2. Non-disclosure
3. Discretion
4. Privacy

Answer 11

1.

Disclosure

Question 12

A person or an entity other than the named insured to whom the proceeds of insurance will be paid

1. Insurer
2. Broker
3. Bailee
4. Loss payee

Answer 12

4.

Loss payee

Question 13

Portion of the total premium that is needed to pay expected losses. It does not take into account money needed for company expenses

1. Pure premium
2. Rate
3. Total premium
4. Commission

Answer 13

1.

Pure premium

Question 14

The person or party designated in the policy as the insured, who has certain rights under the policy, as opposed to someone who may be covered by the policy but is not specifically named

1. Un-named insured
2. Named insured
3. Third party
4. Insurer

Answer 14

2.

Named insured

Question 15

The date of inception of an insurance policy, or the date additional coverages become effective

1. Effective date
2. Expiry date
3. End date
4. Ineffective date

Answer 15

1.

Effective date

Question 16

An account managed by an individual or a corporation, known as the “trustee”, who holds the property for the benefit of an individual, known as the “beneficiary”

1. Trust account
2. Operating account
3. Checking account
4. Savings account

Answer 16

1.

Trust account

Question 17

A clause in an insurance policy that stipulates the rights and obligations of the insurer and the mortgagee

1. Loss clause
2. Payment clause
3. Mortgage clause
4. Deductible clause

Answer 17

3.

Mortgage clause

Question 18

A system of marketing insurance through licensed agents who represent only one company or a group of companies under similar management

1. Direct writer
2. Exclusive agency system
3. Independent brokerage system
4. General agent

Answer 18

2.

Exclusive agency system