QUIZ - Section 2 Flashcards
In a legal relationship, which authority does a principal (company) give the agent in writing?
A. Implied authority
B. Apparent authority
C. Customary authority
D. Express authority
Express authority
Monitoring of existing risks is:
A. Pre-selection
B. Conditional underwriting
C. Post-selection
D. A code requirement
Post-selection
Errors and omissions is a type of liability insurance:
A. that indemnifies a client
B. for insured’s to use to protect themselves against a claim loss
C. for protection against misrepresentation when filing a declaration page
D. that agents use to protect themselves if they give incorrect advice or information to a client.
that agent use to protect themselves if they give incorrect advice or information to a client
A broker can transact all of the following EXCEPT:
A. Property insurance
B. Personal lines
C. Casualty insurance
D. Life, health and disability insurance
Life, health and disability insurance
Which marketing system does the insurer not own the expiration list?
A. Direct writing system
B. An independent agency
C. A direct mail system
D. a Internet
An independent agency
An insurer not authorized to conduct business in CA would be:
A. an unauthorized insurer
B. Either of these
C. neither of these
D. a non-admitted insurer
Either of these
In which of the following marketing distribution systems does the agent represent more than one insurer and more than one company?
A. Direct writing system
B. Exclusive agency
C. Independent agency
D. Direct mailing system
Independent agency
Which of the following is NOT a source of information an underwriter might use to investigate an application in order to approve or reject it?
A. Department of Motor vehicles
B. Financial reports
C. Medical information of Bureau
D. Department of Industrial relations
Department of industrial relations
Which of the following statements about insurance in connection with sales or loans is TRUE?
A. No person involved in the business of financing the purchase of real estate may require the purchase of insurance through a specific agent as part of the requirements in the purchase.
B. A person approved by the commissioner may be required to be involved in the business of financing the purchase of real estate. This person would act as the agent in purchasing insurance for the real estate
C. A person involved in the business of financing the purchase of real estate may require the purchase of insurance through a specific agent if the agent is employed by that company
D. No person involved in the business of financing the purchase of real estate may require the purchase of insurance through a specific agent as part of the requirements in the purchase except an agent licensed with the state of CA.
No person involved in the business of financing the purchase of real estate may require the purchase of insurance through a specific agent as part of the requirements in the purchase.
The underwriting process consists of all the following basic steps except:
A. Issue the rate
B. Monitor the decision
C. Implement the decision
D. Gather necessary information
Issue the rate
Which of the following is NOT a type of authority given to agents?
A. apparent authority
B. Express authority
C. Customary authority
D. Implied authority
Customary authority
An Insurance agent is appointed to transact:
A. all lines of insurance
B. All lines except 24 hour care
C. all classes of insurance
D. All are incorrect
All are incorrect
The application is the document that:
A. shows the insured has coverage, currently in force
B. States the name of the insured, the premium and other facts that help the insurer decide whether to accept or reject it
C. services as a temporary contract that usually lasts 30 days
D. shows proof of insurance
States the name of the insured, the premium and other facts that help the insurer decide whether to accept or reject it
A solicitor holds which license?
A. Either P&C broker-agent or Personal lines broker-agent
B. A solicitor’s license
C. Personal lines broker-agent
D. P&C broker agent
Either P&C broker-agent or Personal lines broker agent
There are no binders issued in:
A. Any of the above
B. In health insurance
C. life insurance
D. excess of 1 million
any of the above
A person licensed as a broker/agent shall be deemed to be:
A. Acting with the same authority granted a managing general agent
B. responsible for deciding if an application should be approved or rejected
C. acting as an insurance agent in the transaction of insurance placed with those for whom a notice of appointment has been filed with the commissioner
D. Involved in the business of financing the purchase of real estate
acting as an insurance agent in the transaction of insurance placed with those for whom a notice of appointment has been filed with the commissioner
A ___ is licensee is authorized to transact ONLY the following lines of insurance: Automobile , recreational vehicles, personal watercraft, residential property, earthquake, flood, inland marine, umbrella
A. Fire and casualty
B. Limited lines automobile
C. Life Only
D. personal LInes
Personal lines
The following acts are unlawful and are misdemeanors in CA except when performed by a surplus lines broker EXCEPT:
A. In any manner, advertising for a non admitted insurer in this state
B. In any manner, advertising for an admitted insurer in this state
C. In any other manner, aiding a non admitted insurer to transact insurance business in this state
D. acting as agent for a non admitted insurer in the transaction of insurance business in this state.
In any manner, advertising for an admitted insurer in this state.
Any person who transacts insurance without a valid license is guilty of a misdemeanor, punishable by a fine not exceeding ___.
A. $10,000
B. $50,000
C. $20,000
D. $25,000
$50,000
Law of agency is the relationship between:
A. agent and principal
B. Insurer and customer
C. agency and agent
D. agent and client
agent and principal
Which of the following would not require a license?
A. Public adjuster
B. All require a license
C. Insurance adjuster
D. Independent adjuster
Insurance adjuster
If an agent gives incorrect advice or unknowingly provides incorrect information to a client, which of the following liability insurance policies for nonmusical professionals is available to pay for losses or defend lawsuits that might be filed against him?
A. Medical insurance
B. Liability insurance
C. Nonadmitted
D. errors and omissions
Errors and omissions
A lender does have the right to provide insurance or renew the insurance and change a transaction fee if the borrower fails to deliver proof of insurance at least __ days before the policy expires.
A. 15
B. 25
C. 10
D. 30
30
Which of the of following is not true about the relationship between an agent and a solicitor?
A. an agent represents the company, whereas the solicitor is an assistant to an agent and has no binding authority
B. A solicitor cannot be employed by more than one fire casualty broker/agent at the same time
C. an agent or broker cannot transact as a solicitor, but a solicitor can transact as a broker or agent
D. a solicitor may give premium quotes over the phone, just like an agent.
an agent or broker cannot transact as a solicitor but a solicitor can transact as a broker or agent.
Which of the following is NOT an action a person performs when transacting insurance?
A. Solicitation of insurance
B. The actual execution of a contract
C. Any transactions that later results from the operation of the contract
D. Calling an insurer for a price quote
Calling an insurer for a price quote
Which of the following is a responsibility of the insured in an insurance contract?
A. send the application to the underwriting department
B. to complete the application
C. give true statements and information of the application
D. Fully explain the policy to the client
Give true statements and information on the application
When dealing with insurance in connection with sales or loans, violating the legal provisions specified by California law is considered a:
A. misdemeanor
B. felony
C. Fine
D. penalty
misdemeanor
Binders can be extended how many additional days?
90 days
30 days
60 days
150 days
60 days
Which of the following actions would not be considered transacting insurance?
A. emailing a prospect a auto quote
B. Collecting premium for a policy
C. Giving a price quote over the the phone
D. handing a prospect a business card and asking them for information
Handing a prospect a business card and asking them for information
In which system is the agent considered an employee?
A. a direct response system
B. exclusive agency system
C. direct writing system
D. none of these
direct writing system
