Section 1

Question 1

Insurance is defined as the _____ to the insurance company in consideration for the premium

Answer 1

Transfer of PURE risk *
Insurable interest
Economic hardship
Large number of homogeneous units

Question 2

To be insurable, losses must be

Answer 2

Calculable*
Loss and not gained
Uncertain
Caused by catastrophic perils

Question 3

Concealment is defined as

Answer 3

Failure to disclose a material fact

Question 4

_____ insurance protects professional persons such as insurance producers in case they are sued for negligent performance of their duties

Answer 4

Error and omissions (e&o)*
Consideration
Warranty
Reinsurance

Question 5

____ coverage is usually sold by unauthorized companies such as Lloyds of London

Answer 5

Surplus lines*
Mass marketing
Direct response
Non insurance sponsors

Question 6

What company has their home office In another state

Answer 6

Domestic
Foreign *
Alien

Question 7

____ own their own accounts and are not insurance company employees

Answer 7

Independent producers *
Recipricol insurers
Mutual insurers
Stock insurers

Question 8

If a policy is vague, all fought will be resolved against the insurer. This is call the ___

Answer 8

Doctrine of adhesion*
Legal purpose
Consideration
Apparent authority

Question 9

A dishonest person presents a

Answer 9

Moral hazard *
Morale hazard
Physical hazard
Speculative risk

Question 10

____ has a possibility of gain or loss and is not insurable

Answer 10

Speculative risk*
Indemnity
Aleatory
Warranty

Question 11

A producers ____ is contained in their producers contract

Answer 11

Express authority*
Implied authority
Apparent authority

Question 12

A chance of loss without any chance of gain is called

Answer 12

Pure risk*
Speculative risk
Hazard
Estoppel

Question 13

An _____ contract is one where the outcome depends upon chance

Answer 13

Aleatory*
Risk
Binders
Peril

Question 14

____ write difficult to please business risks

Answer 14

Surplus lines insurers *
Estoppel
Waiver
Indemnity

Question 15

____ means that even if their is no written contract, but is actual authority the producer has to transact normal business activities

Answer 15

Implied authority *
Apparent authority
Express authority

Question 16

___ represent the insurance company not the insured

Answer 16

Producers *

Broker

Question 17

Error and omissions inrsurance insurance won’t pay unless the

Answer 17

Loss was unexpected
*insured was negligent
Insured was dishonest
Loss was catastrophic loss

Question 18

C o a l stands for what

Answer 18

Consideration offer acceptance and legal purpose*
Consideration agent acceptance and legal purpose
Contract offer acceptance and legal purpose

Question 19

A producers ____ is expressed written down in the producers contract with the insurer they represent

Answer 19

Binding authority *
Implied authority
Apparent authority

Question 20

The authority a producer has that is written in the contract is known as

Answer 20

Express authority *
Implied authority
Apparent authority