general insurance

Question 1

An insurer incorporated under the laws of the state in which it is operating is considered to be a(n): domestic insurer

Answer 1

domestic insurer

Question 2

Which of the following terms means that an insurance contract is dependent upon chance or uncertain outcome

Answer 2

aleatory

Question 3

Under contract law, the actions by a party may intentionally and voluntarily give up a known right. When this occurs, it is known as

Answer 3

waiver

Question 4

represents more than one insurance company

Answer 4

An independent producer

Question 5

The uncertainty about loss that exists whenever more than one outcome is possible is called

Answer 5

risk

Question 6

Statements provided by an applicant for insurance are considered to be

Answer 6

representations

Question 7

What is the name of the type of insurer consisting of an unincorporated group of persons who provide insurance among themselves through an inter-exchange of indemnity agreements

Answer 7

Reciprocal insurer

Question 8

Which element of an insurance contract requires that the insured have the legal capacity to make a contract?

Answer 8

Competent parties

Question 9

All of the following statements are true about a representation EXCEPT

Answer 9

A representation of a fact is the same as an expression of opinion

Question 10

The authority that a producer seems to have that is based upon certain actions that the producer takes is known as __________ authority.

Answer 10

Apparent

Question 11

In which company may policyholders receive policy dividends when there is a profit?

Answer 11

Mutual

Question 12

A producer’s obligation to act in an insurance applicant’s or insured’s best interest, based on the faith and trust placed on the producer by members of the insurance-buying public, is known as

Answer 12

fiduciary duty

Question 13

All of the following are required elements of a legal contract EXCEPT

Answer 13

waiver and estoppel (are legal doctrines but are not part of contract)

Question 14

A binder

Answer 14

may be oral or written

Question 15

The authority which is given by the insurer that is not specified is which of the following

Answer 15

implied

Question 16

The authority of an insurance producer that is spelled out in the written words of the agency contract between the producer and the insurer is

Answer 16

express authority

Question 17

An applicant for insurance must accept the entire policy as written or none of it under the Doctrine of

Answer 17

adhesion

Question 18

In the formation of a legal contract, each party must give something of value. Under contract law, this is referred to as

Answer 18

consideration (the exchange of values)

Question 19

A contract where only one party, the insurer, makes an enforceable promise is said to be

Answer 19

unilateral

Question 20

Each of the following elements is necessary for formation of a legally valid contract EXCEPT:

Answer 20

signatures of each party

Question 21

In which company may stockholders share in the profits and losses of the insurer

Answer 21

stock

Question 22

An insurance company owned by its policyholders, who receive a return of unused premiums in the form of policy dividends, is

Answer 22

mutual company

Question 23

Which insurance doctrine states that a policy should cover what a prudent person would expect?

Answer 23

Reasonable expectations

Question 24

In property and casualty and in medical-expense insurance, the principle of making someone “whole” again after a loss by paying only for actual losses is called

Answer 24

indemnity

Question 25

Which of the following contractual elements consists of the "offer" and the "acceptance":

Answer 25

agreement

Question 26

Not all risks are insurable. Certain characteristics must be present for a particular risk to be considered an "insurable risk". Which of the following characteristics might make a risk uninsurable:

Answer 26

Risk of loss exists because of a catastrophic exposure

Question 27

A group of individuals who band together to assume risks, where each individual is responsible only for the share of the risk they assumed is known as

Answer 27

Lloyd’s Association

Question 28

Something that may increase the seriousness of a loss if loss occurs, or that increases the likelihood that a loss will occur, is called a

Answer 28

hazard

Question 29

Insurance is a means of

Answer 29

transferring risk

Question 30

Because an insurer writes the policy language and the insured has little or no control over the content, any ambiguity in the wording is usually resolved in favor of the insured. Because the design and wording of a policy are in the hands of the insurer, insurance policies are said to be

Answer 30

contracts of adhesion

Question 31

Which type of licensee represents insureds or prospective insureds and does not represent an insurance company?

Answer 31

An insurance broker