chapter 1

Question 1

insurable interest

Answer 1

must exist at the time of application

Question 2

Contract of Adhesion

Answer 2

where terms are non-negotiable

Question 3

• Conditions in Contracts:

Answer 3

Certain events include conditions

Question 4

Aleatory Contract

Answer 4

the performance of one or both parties is contingent upon a particular event.

Question 5

• Incomplete Application and Policy Issuance:

Answer 5

If an insurer accepts an incomplete application and issues a policy, they must honor the contract.

Question 6

Misrepresentation

Answer 6

Making untrue statements

Question 7

Conditional Coverage Receipt

Answer 7

Receipt given by a producer showing that coverage is in force immediately or based on certain received conditions

Question 8

• Incomplete Application:

Answer 8

producer notices not all questions were answered

Question 9

Collecting Initial Premium

Answer 9

producer must collect the initial premium and make sure the applicants are healthy when delivering the policy

Question 10

Risk Classification:

Answer 10

checking information on an application to determine the risk classification.

Question 11

loss experience

Answer 11

Higher risk faced by an insurance company.

Question 12

delivery reciept

Answer 12

reciept that starts the free look period

Question 13

Fair Credit Reporting Act (FCRA):

Answer 13

disclosure that an investigating consumer report may be obtained for a prospective insured.

Question 14

• Anti Money Laundering Rules

Answer 14

requesting proceeds to be paid to a third party may raise red flags under anti-money laundering rules.

Question 15

USA PATRIOT Act

Answer 15

Aimed at detecting criminal activity,

Question 15

Policy Receipts

Answer 15

Coverage is conditional upon the issuance of a receipt,