Exam practice 4 Flashcards
(46 cards)
1
Q
Aircraft liability insurance covers which of the following?
A
- Injured passengers.
2
Q
- What are supplemental payments and how are they added?
A
- Paid in addition to the limit of insurance noted on the declarations.
3
Q
- An insurance producer is required to report all of the following EXCEPT?
A
a. A change of address.
b. Failure to pay property tax.
c. Failure to pay state income tax.
d. Failure to comply with a court order imposing a child support obligation.
4
Q
- If a licensee wants to transact insurance under a different name than that listed on his or her producer’s license, which of the following must occur?
A
a. It must be reported to the Commissioner.
5
Q
- An individual slips on a grape while walking in the grocery store. What would the grape be considered?
a. Peril
b. Hazard
c. Risk
A
a. Peril
6
Q
- Who is responsible for reporting a loss to the insurer?
A
- Employer
7
Q
- What does a Directors and Officials coverage not cover?
A
- Stockholders
8
Q
- Coinsurance penalizes who?
A
- Underinsured
9
Q
- In a personal auto policy, what time does the policy become effective?
a. 12:01 am. *
b. 12:00 am.
c. 11:59 pp.
A
a. 12:01 am. *
10
Q
- Under equipment breakdown, what would be considered an accident? ****
a. Wear and tear (incorrect)
b. Leakage valves (incorrect)
c. Sink falling
d. Exposure of pressure vessel
A
d. Exposure of pressure vessel
11
Q
- When insurance is transferred to another insurer, the insurer assuming the risk would be considered? ****
a. Reciprocal insurer
b. Risk retention group
c. Reinsurer
A
a. Reciprocal insurer
12
Q
- How do monopolistic states differ from competitive states in workers’ compensation insurance? ***
a. In monopolistic states, competitive markets are prohibited.
b. In competitive states, the employer can choose either a carrier or the monopoly.
c. In monopolistic states, competitive markets are prohibited from cancelling insurance policies.
d. In competitive states, the monopolistic entity cannot provide coverage at a lower premium.
A
a. In monopolistic states, competitive markets are prohibited.
13
Q
- Under Federal Workers Compensation Law, all of the following would be included EXCEPT? ***
a. Federal Coal Mine Health and Safety Act of 1969
b. Affordable Act
c. Workers Compensation Act
d. U.S. Longshore and Harbor Workers Act
A
b. Affordable Act
14
Q
- All of the following would be considered insureds EXCEPT? ***
a. Clients
b. Stockholders
c. Employee
d. Directors
A
a. Clients
15
Q
- Which of the following is an example of an indirect (consequential) loss? ****
a. A home theater system is stolen from a family room.
b. A manufactured plant is unable to operate because it was destroyed by a fire.
c. The roof is blown off by a windstorm.
d. The foundation of newly constructed home is damaged by an earthquake.
A
d. The foundation of newly constructed home is damaged by an earthquake.
16
Q
- Who would take part in continuing education? ****
a. Nonresident producers
b. Licensed attorneys
c. A producer qualified to sell major lines of insurance.
A
c. A producer qualified to sell major lines of insurance.
17
Q
- The Federal Worker’s Compensation Laws consist of
A
- Federal Employers Liability (FELA)
- U.S. Longshore and Harbor Workers Compensation Act
- The Jones Act
- The Migrant and Seasonal Agricultural Worker Protection Act (MSPA)
- Federal Miner Safety and Health Act of 1977
18
Q
- A producer’s license must be renewed every _____________
A
2 years (biennially).
19
Q
- An individual was caught acting as a general agent even though he or she is not properly licensed. The max penalty is a-______________________
A
third-degree misdemeanor and a $1,000 fine for each day of their offense.
20
Q
- In order for two competent parties to a contract, both parties must be legal of age, ____________ to understand the contract, and not under the influence of drugs or alcohol.
A
mentally competent
21
Q
- ______________ companies are owned by policyowners/policyholders.
A
Mutual
22
Q
- A ____________ is an individual who is licenses to sell, solicit, and negotiate insurance contracts on behalf of the principal (insurer).
A
producer
23
Q
- ________________ are paid in addition to the limit of insurance noted on the declarations.
A
Supplemental payments
24
Q
- A private passenger auto is a pickup or van, for which no other insurance policy provides coverage for
A
- Has a gross vehicle weight of less than 10,000 pounds. Gross vehicle weight is the maximum recommended weight including the vehicle, fuel and fluids, passengers, and all cargo.
- Private passenger vehicles typically include station wagons, jeeps, pickup trucks, panel vans, and utility trucks.
- It is NOT used for the delivery or transportation of goods and materials unless such use is incidental to a business of installing, maintaining, or repairing furnishings or equipment.
- It is NOT used for farming or ranching.
25
* ________________ was operated and managed by the Risk Management Agency (RMA)- an agency of the Department of Agriculture in order to administer a federal crop insurance program
The Federal Crop Insurance Act
26
* Aircraft liability insurance
- Covers bodily injury or death, and property damage caused by ownership, maintenance, or operation of the aircraft, and incurred by someone other than the named insured. This includes owners, operators, passengers, and baggage and cargo carried on the aircraft.
- Does NOT typically cover the crew.
- Can be written to include or exclude bodily injury to passengers
27
* Loss payable (Property and Casualty Insurance Basics)
- also known as the standard mortgage clause. It is a basis provision of all property policies for real property.
- Used to cover the interest of a secured lender in personal property. If the insurer decides to cancel or not renew a policy, the loss payee must be notified in writing.
28
* Coinsurance
- The coinsurance clause defines how much will be paid in the event the insurance limits do not meet the policy requirement.
- Property must be insured to 80% of its replacement cost.
29
* Builders Risk Coverage Form
- Used to insure buildings while under construction.
- There are 4 additional coverages under the Builders Risk Coverage Form
1.) Debris Removal
2.) Preservation Property
3.) Fire Department Service Charge
4.) Pollutant Cleanup and Removal
30
* __________ is a term used that describes the coverage provided under an insurance policy form that lists specific covered perils. No coverage is provided for unlisted perils.
Open Peril
31
* ______________ is used to provide for applicants who are unable to obtain coverage through commercial insurers.
Assigned Risk Plan
32
* First-Party Benefits (Auto Insurance)
- must be made available for purchase by insurers with respect to injury arising out of the maintenance or use of motor vehicle.
- 80%
- Insurers must include coverage providing a medical benefit of $5,000
33
* __________ is a formal written law enacted by legislative; can be found in in the state of Insurance code.
Statute
34
* Monopolistic vs Competitive
- Monopolistic- employer purchases from state-operated entity.
- Competitive- employer purchased from authorized insurers.
35
* Agency Termination
- Upon termination, an insurer must continue the agent’s policies for a period of at least 12 months.
36
* Loss Sustained Form
covers losses that are sustained during the policy period and discovered within one year of policy expiration.
37
* Broad Loss Under Agricultural/Farm-
coverage of loss of livestock; drowning of livestock, accidental shooting/attack on livestock, and death of livestock.
38
* The Commissioner has the ability to do all of the following: ***
- Secure or require any documents or information, including fingerprints.
- Participate with the NAIC in submitting and obtaining information on insurance producers, including licensing history.
- Approve forms to be used by individuals and businesses.
- Approve additional limited lines of authority.
39
*______________ is a loss or damage that results from an insured’s inability to use his or her property because of direct loss to the property of others.
An Indirect Loss (Consequential Loss)
40
* _____________ applies to situations in which someone other than the insured is injured
Liability coverage
41
* _____________ covers injury to the injured party’s own property
Property damage
42
* __________ refers to damage to the injured party’s person.
Bodily injury
43
* _______________ will pay up to $500 if an insured moves the mobile home to protect it from loss by a covered peril. ***
Mobile Homeowners Policy
44
* Directors and Officers liability (Others Types of Property & Casualty Insurance)
- coverage provides protection to directors and officers of an organization (past and present) for any claims for losses arising from a wrongful act made while acting in an official capacity.
- Coverage is triggered by wrongful acts rather than on an accident or occurrence basis. Wrongful acts include misstatements made by the directors and officers, as well as neglect and breach of duty.
45
* _________ are punishments for extreme behavior, gross negligence, or willful intent.
Punitive damages
46
* _____________ is a broader legislated or regulated coverage that is extended to current policies at no additional premium.
Liberalization Clause
