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General Insurance Flashcards

(79 cards)

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1
Q

Agent/Producer

A

A legal representative of an insurance company. Producer includes agents and brokers. Agents are agents of the insurer

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2
Q

Applicant or proposed insured

A

Someone applying for insurance

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3
Q

Broker

A

An insurance producer not appointed by the insurer and is deemed to represent the client.

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4
Q

Insurance policy

A

A contract between a policyowner and an insurance company which agrees to pay the insured or the beneficiary for loss caused by specific events

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5
Q

Insured

A

The person covered by the insurance policy. This person may or may not be the policy owner.

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6
Q

Insurer/Principal

A

The company that issues the policy

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7
Q

Policyowner

A

The person entitled to exercise the rights and privileges in the policy.

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8
Q

Premium

A

The money paid to the company for the policy

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9
Q

Reciprocity/reciprocal

A

A mutual interchange of rights and privileges

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10
Q

What costs less Term or Whole life?

A

Term

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11
Q

What can you take a loan from term or whole life?

A

Whole life

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12
Q

When does an insurance policy go into effect?

A

When the policy is delivered and the premium is paid

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13
Q

What document is required for an insurance company to transact insurance?

A

Certificate of authority

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14
Q

What is the term for the causes of loss insured against in an insurance policy?

A

Peril

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15
Q

What type of insurer is formed under the laws of another country?

A

Alien

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16
Q

What entities make up the medical information bureau?

A

Insurers

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17
Q

An insurance policy paid a non taxable dividend to the insured one year, and then nothing the next. From what type of insurer did the insured purchase the policy?

A

Mutual

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18
Q

When would a misrepresentation on an insurance application be considered fraud?

A

When it’s intentional and material

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19
Q

Wagering on a sporting event is known as what type of risk?

A

Speculative

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20
Q

If an applicant does not receive his or her insurance policy, who would be held responsible?

A

The agent

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21
Q

An insurance co is domiciled in California and transacts insurance in Nevada. What is the insurers classification in Nevada?

A

Foreign

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22
Q

An applicant conceals relevant health information on the application. The applicant presents what type of hazard?

A

Moral

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23
Q

Whose responsibility is it to determine that all the questions on an insurance application are answered?

A

The agents

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24
Q

The requirement that agents must account for and promptly remit all insurance funds collected is known as what type of agent responsibility?

A

Fiduciary

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25
In insurance, when is the offer usually made on the contract?
When the application is submitted
26
An insurance company formed under the laws of another state is known as what type of co?
Foreign
27
What type of risk is insurable?
Pure
28
Who owns stock companies?
Stockholders
29
What do individuals use to transfer their risk of loss to a larger group?
Insurance
30
The insurer organized to return a profit to the stockholders is what type of insurer?
Stock company
31
The type of co that is organized to return surplus $ to the policyholders?
Mutual company
32
4 elements of an ins contract
Agreement (offer and acceptance), consideration, competent parties, and legal purpose
33
LACC
Legal purpose Agreement (offer and acceptance) Consideration Competent parties
34
What type of report provides info about the applicants hobbies habits and financial status?
Inspection report
35
2 elements necessary for a life ins policy to have legal purpose
Insurable interest and consent
36
If an insurer meets the states financial requirements and is approved to transact business in the state it is considered what type of insurer?
Authorized
37
Five characteristics of an ideally insurable risk
Loss must be 1. Due to chance 2. Definite and measurable 3. Statistically predictable 4. Not catastrophic 5. Coverage cannot be mandatory
38
What is the best way to handle incomplete applications?
Send it back to the applicant to finish it
39
Situation where the person can only experience loss and no gain is what type of risk?
Pure
40
What is a warranty in an insurance contract?
An absolutely true statement upon which the validity of the insurance contract is based
41
The reduction, decrease or disappearance of value of the person or property insured in a policy is known as what
Loss
42
What are the three type of hazards?
Physical, moral, and morale
43
3 types of agent authority
Express, implied and apparent
44
When agents act within the scope of their contract, their actions will be assumed to be the actions of whom?
Insurer
45
Conditions that increase the chance of loss are known as what?
Hazards
46
For the purpose of insurance, what is risk?
Uncertainty of loss
47
If the agent fails to obtain a signature on the application what should he do?
Send it back for a signature
48
When risks with higher probability of loss are seeking insurance more often than the other risks this is known as what?
Adverse selection
49
What is the term for causes of loss?
Peril
50
Strategies used by underwriters to prevent adverse selection
Restriction of coverage, refusal to accept risk, accepting a risk at a higher rate
51
When a change needs to be made on an application what should be done?
Start a new application or initial where the changes are
52
When is the offer usually made on the contract?
When the application is submitted
53
What are the three types of insurers by domicile?
Domestic, foreign, and alien
54
In the agent/insurer relationship, who is considered the principal?
The insurer
55
Whom does an insurance agent represent?
The company
56
According to the law of agency, a principal is represented by whom?
Agent or producer
57
Insurance is a contract that protects the insured from what?
Loss
58
An applicant conceals relevant health information on the application, this is what type of hazard?
Moral
59
A person who doesn’t lock their doors and shows an indifferent attitude is what type of hazard?
Morale
60
Who manages a reciprocal insurance company?
Attorney in fact
61
Can a producer be personally viable if they violate the producers contract?
Yes
62
Are independent producers insurance company employees?
No
63
What authority does the producer have that is written into their contract?
Express authority
64
Does consideration on a policy need to be equal?
No
65
Principle of indemnity
Purpose of insurance is to restore the insured to the same position before the loss occurred
66
Warranty
sworn statement guaranteed to be true
67
What 2 Perils does health insurance cover?
Accident and sickness
68
Nonoccupational vs Occupational
Occupational covers on and off the job. Non is off the job only
69
Hospital indemnity pays a stated or variable amount?
Stated amount
70
Blanket disability policy written for
passengers on common carrier, employee group, student group, debtor group, sports team
71
What increases the chance of loss?
Hazard
72
What is a cause of loss?
Peril such as a fire
73
Law of large numbers allows insurers to predict claims
More accurately
74
Will insurers buy insurance to protect themselves?
Yes
75
Are insurance laws uniform from one state to the next?
No
76
Are dividends from stock insurers guaranteed?
No
77
An unincorporated association of individuals who insure each other
Reciprocal insurer
78
The government offers insurance based on
Social needs like flood insurance and workers comp but not for the purpose of preventing fraud
79
A foreign company has their office where
Another state

Insurance (17 decks)

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