Quiz - section 5 Flashcards

1
Q

The Commissioner shall establish a list of all surplus line insurers who have met the recognized requirements for such title and shall issue a master list at least semiannually. This list is known as:

Commissioner`s list of surplus lines
LESLI
OSHA
SEUA

A

LESLI

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2
Q

All of the following are methods of managing risk EXCEPT:

Rescission
Retention
Transfer
Avoidance

A

Rescission

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3
Q

Loss of rent, profits, expenses necessary to keep a business running until the damage can be fixed are examples of:

Named perils
Indirect loss
Loss exposure
Direct loss

A

Indirect loss

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4
Q

All of the following are categorized torts EXCEPT:

Absolute/Strict
Negligence
Adverse selection
Intentional

A

adverse selection

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5
Q

Punitive damages are:

amounts paid for actual loss or injury sustained.

a form of punishment imposed by the court upon the individual responsible for a loss.

losses of property or injuries resulting in medical bills.

losses that are not easily measured in dollar amounts.

A

a form of punishment imposed by the court upon the individual responsible for a loss.

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6
Q

Which would not be a tort?

Keeping a pet rattle snake
Any legal wrong
Strict liability
Negligence

A

Any legal wrong

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7
Q

In computing the loss payment for contributory negligence the claim would:

be reduced by the percentage of fault for which the client is found responsible

pay out the amount of the claim, minus the deductible.

pay nothing if the injured party didn`t meet the standard of self-protection in any form.

pay the full amount of the claim under all circumstances.

A

pay nothing if the injured party didn`t meet the standard of self-protection in any form.

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8
Q

Insurance that cannot be procured through admitted insurers may, under certain circumstances, be placed with nonadmitted insurers. This is known as:

Tort lines
Non-standard lines
Surplus lines
Special surplus lines

A

Surplus lines

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9
Q

Which method of managing risk is described as not purchasing insurance at all, or paying part of a loss when it occurs?

Reduction
Transfer
Avoidance
Retention

A

Retention

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10
Q

Which of the following is NOT a description of what the California Worker`s Compensation Inspection Rating Bureau (WCIRB) does?

Collects and tabulates information and statistics for the purpose of developing pure premium rates to be submitted to the commissioner for issuance or approval.
Develops information about property and liability risk and the property/casualty insurance industrys leading supplier of statistical, actuarial, underwriting, and claims data. Inspects risks for classification or rate purposes to furnish to the insurer and upon request of the employer. Provides reliable statistics and rating information regarding workers compensation and employer`s liability insurance.

A

Develops information about property and liability risk and the property/casualty insurance industry`s leading supplier of statistical, actuarial, underwriting, and claims data.

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11
Q

A special surplus line broker may transact Special Surplus Lines. All of the following are special surplus lines EXCEPT:

Aircraft insurance
Reinsuring the liability of an admitted insurer
Insurance on property or operations of railroads engaged in interstate commerce
Farm or cattle ranch

A

Farm or cattle ranch

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12
Q

Defamation is an intentional tort that damages one’s reputation that is:

neither false or either written or spoken are correct
both false and either written or spoken are correct
either written or spoken
false

A

both false and either written or spoken are correct

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13
Q

The Tyler-Star Newspaper wrote an article about Jims Bakery that made Jim look like a racist. This type of injury to Jims character is known as:

Absolute liability
Libel
Misrepresentation
Slander

A

Libel

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14
Q

Insurance Services Office develops forms and lost cost rating for:

workers’ compensation
surety ship and crops
property and casualty
Both property and casualty and surety ship and crops

A

property and casualty

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15
Q

Amounts paid for actual loss or injury are known as:

General damages
Specific damages
Compensatory damages
Punitive damages

A

Compensatory damages

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16
Q

Before determining liability based on negligence, the following requirements must be met EXCEPT:

duty
gross negligence
unbroken chain
breach

A

gross negligence

17
Q

If an insured is 25% at fault and the insurer settles proportionally, this is:

common law negligence
modified no fault
comparative negligence
contributory negligence

A

comparative negligence

18
Q

Short rate cancellation is described as:

A policy is terminated because premiums have not been paid.

Termination of an insurance contract or bond with the premium charge adjusted in proportion to the exact time the protection has been in force.

The method used when a policy is canceled by the insured before it reaches the expiration date.

A type of policy the insured can cancel without penalty. The insured receives a 100% refund of the premium.

A

The method used when a policy is canceled by the insured before it reaches the expiration date.

19
Q

When an employer is held responsible for actions of an employee this is:

general liability
vicarious liability
contributory liability
absolute liability

A

vicarious liability

20
Q

A legal right of recovery can be based on which of the following?

Torts
Statutes
Any one of these
Contracts

A

Any one of these

21
Q

Payment for the loss of the ability to bear children or loss of limb would be:

general damages
specific damages
special damages
punitive damages

A

general damages

22
Q

Loss is defined as:

the amount of money an insurer pays for operation of the business.

the percentage of each premium dollar a company spends on claims and expenses.

reduction of a company`s cost of operations, including overhead, marketing, and commissions.

the reduction, decline, or disappearance of value of the person or property insured in a policy, by a peril insured against.

A

the reduction, decline, or disappearance of value of the person or property insured in a policy, by a peril insured against.

23
Q

Which of the following is NOT an example of assumption of risk?

The driver of a limousine service.
A passenger on a helicopter tour of an exotic island.
A guest passenger in an automobile.
A spectator at a baseball game.

A

The driver of a limousine service.

24
Q

Least professional method to identify loss exposure would be:

checklists and surveys
copying previous apps.
financial statements
contracts & agreements

A

copying previous apps.

25
Q

Comparative negligence is best described as:

part of the claim is paid for by the insured`s own insurance company; however, modification is made to the settlement amounts based on the idea of relative negligence, which assigns a percentage of carelessness to each party involved.

the injured party is fully responsible for the claim and the damages are not reduced accordingly

people seeking insurance at the last minute when they need it.

the injured party must be completely free of fault in order to collect.

A

part of the claim is paid for by the insured`s own insurance company; however, modification is made to the settlement amounts based on the idea of relative negligence, which assigns a percentage of carelessness to each party involved.

26
Q

When someone willingly gives up the right to sue a person who was at fault, this is known as:

Causation
Subrogation
Mediation
Arbitration

A

Subrogation

27
Q

Which of the following is not a common law defense?

Assumption of risk
Comparative negligence
Contributory negligence
Last clear chance

A

Comparative negligence

28
Q

A broken or interrupted chain of events is:

intervening cause
intentional tort
proximate cause
breach of duty

A

intervening cause

29
Q

Which organization is the leading source of information about property and liability risk and is the property/casualty insurance industry`s leading supplier of statistical, actuarial, underwriting, and claims data?

Department of Insurance (DOI)
Department of Data and Statistics (DDS)
The California Worker`s Compensation Inspection Rating Bureau (WCIRB)
The Insurance Service Office (ISO)

A

The Insurance Service Office (ISO)

30
Q

Lapse refers to:

continuance of an insurance policy beyond its original term
discontinuance of an insurance policy beyond its original term
a policy is terminated because the premiums have not been paid.
terminating one`s insurance policy

A

a policy is terminated because the premiums have not been paid.

31
Q

Flat rate cancellation is described as:

The method used when a policy is canceled by the insured before it reaches the expiration date.

A policy is terminated because the premiums have not been paid.

A type of cancellation whereby the insured can cancel without penalty. The insured receives a 100% refund of Premium.

Termination of an insurance contract or bond with the premium charge adjusted in proportion to the exact time the protection has been in force.

A

A type of cancellation whereby the insured can cancel without penalty. The insured receives a 100% refund of Premium.

32
Q

When two or more perils happen at the same time, in sequence, and cause a loss, this is referred to as:

Concurrent causation
Named peril
All-risk
Open peril

A

Concurrent causation

33
Q

Which of the following terms describes an estimate of the amount an insurer will pay for a claim?

Rescission
Merit rate
Manual rate
Loss Reserve

A

Loss Reserve

34
Q

Proximate cause refers to:

a product causes bodily injury or property damage

a person should have acted a certain way in that circumstance, but did not

an individual`s negligent behavior does not mean he will be held legally liable

an uninterrupted chain of events resulting from negligence causes injury or damage

A

an uninterrupted chain of events resulting from negligence causes injury or damage

35
Q

Combined ratio is defined as:

the percentage of each premium dollar a company spends on claims and expenses.

the amount of money an insurer pays for operation of the business.

The company`s cost of operations, including overhead, marketing, and commissions.

the reduction, decline, or disappearance of value of the person or property insured in a policy, by a peril insured against.

A

the percentage of each premium dollar a company spends on claims and expenses.