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Key Terms Flashcards

(68 cards)

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1
Q

A company that is domiciled in this state

A

Domestic

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2
Q

The failure to disclose a material fact

A

Concealment

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3
Q

To be insurable, a risk must be

A

Calculable (measurable)

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4
Q

Exclusions (such as self inflicted injury) are designed to prevent

A

Adverse Selection

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5
Q

A form of insurance between insurers, designed to reduce the risk of catastrophic loss

A

Reinsurance

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6
Q

Surplus lines is hard to place insurance written by _____________ insurers

A

Unauthorized

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7
Q

And insurer that has their home office in another country, such as Canada

A

Alien

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8
Q

Temporary insurance containing all the terms of the policy to be issued

A

Binders

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9
Q

Conditional or “binding” receipts are used in L&H. Binders are used in

A

P&C

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10
Q

Type of authority that is written down in the producers contract with the insurer.

A

Express

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11
Q

Authority that a producer has that is necessary to the transaction of business

A

Implied

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12
Q

Authority that a client believes a producer has

A

Apparent

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13
Q

When an insurer is responsible for the actions of their producers

A

Law of Agency

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14
Q

A type of duty or responsibility that a producer has when handling premiums for the client for the insurer

A

Fiduciary

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15
Q

If a producer discovers negative information regarding a client they should notify the _____________

A

Insurer

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16
Q

Telling the truth to the best of our knowledge

A

Representation

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17
Q

Insurance contracts are considered unilateral meaning___________

A

One sided

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18
Q

A deliberate attempt to deceive

A

Fraud

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19
Q

Insurance contracts are conditional, with conditions that apply to both the _____________ and the ___________

A

Insured and insurer

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20
Q

Insurance contracts are based on this Doctrine which means that it is reasonable for the average person to believe that coverage applies

A

Doctrine of a reasonable expectations

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21
Q

States the insured’s duties in the event of a claim ( notice of claim )

A

Conditions

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22
Q

Type of insurance that protects professional person’s such as insurance producers in case they are sued for negligent performance of their duties

A

Errors and omissions

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23
Q

A representation is defined as the truth to the best of your knowledge, a ______________ is a sworn statement of truth, guaranteed to be true

A

Warranty

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24
Q

Collecting premiums and handling claims

A

Transacting insurance

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25
Stock insurance companies may pay____________ to stockholders and is referred to as a ______________ policy.
Dividens | Non participating
26
Unincorporated insurance company managed by a attorney- in- fact
Reciprocal
27
Mutual insurers pay may pay dividends to policy holders, these dividends are guaranteed, True or False?
False
28
An insurer must fill out a financial statement and rates and policy form to obtain a____________
Certificate of authority
29
How may a policy be modified?
Only in writing by a company officer (an endorsement or rider)
30
An insurance company incorporated in a different state is a ___________ insurance company
Foreign
31
Authority in the producers contract that allows coverage to start
Binding authority
32
Producers that own their own accounts and are not employed by a company
Independent producer
33
States that both parties of the contract rely on honesty with one another
Doctrine of utmost good faith
34
Insurance laws are required to be uniform from state to state, True or False?
False
35
It is not legal to advertise honest differences in insurance contracts, True or False?
False, it is Legal
36
When replacing one policy with another producers have
E&O exposure
37
What risk has the possibility of loss or gain and is not insurable?
Speculative
38
Allows insurers to predict claims more accurately
Law of large numbers
39
__________ ___________ insurance companies use salaried or "exclusive" producers
Direct writing
40
A producers ___________ authority is contained in their producers contract
Express
41
The chance of loss without any chance of gain is called
Pure risk
42
The failure to disclose a material fact
Concealment
43
In court if a policy language is vague the favor lies with the client because of
Doctrine of adhesion
44
Voluntarily giving up a legal right is known as a_________
Waiver
45
Once a legal right is waived in can no longer be asserted under
The doctrine of estoppel
46
Something that increases risk
Hazard
47
Smoking is known as which type of hazard for L&H insurance
Physical hazard
48
A careless person represents a __________ hazard
Morale
49
A dishonest person represents a ___________ hazard
Moral
50
The main purpose of insurance is based on the _______________ (make whole again)
Principle of indemnity
51
Chance or uncertainty of loss
Risk
52
Insurance does ______________ in consideration for premium pain
Transfers risk
53
Exchange of values
Consideration
54
Consideration need not be equal, True or False?
True
55
4 ways risk is managed
Transfer Avoidance Retention Reduction
56
Claims are made more predictable through
Law of large numbers
57
On L&H insurance ___________ ____________ must exist at time of application, not at the time of claim
Insurable interest
58
By continuing to live a person has a ___________ ___________ in another person
Insurable interest
59
When the outcome of a contract depends on chance
Aleotory
60
A type of agreement where liability may be avoided
Hold harmless
61
An agent (producer) may not modify a policy, True or False?
True
62
Group insurance with participation requirements helps avoid
Adverse selection
63
Condition that could result in a loss
Exposure
64
Clients assume coverage exists through what doctrine?
Reasonable expectations
65
A client must sign any changes a producer makes on a application, True or False?
False, initials are ok
66
A syndicate formed to underwrite risk in a residual market
Loyds association
67
Agents (producers) are also known as field underwriters, True or False?
True
68
Is defined as the transfer of pure risk to the insurance company for a premium.
Insurance

Insurance Exam (1 decks)

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