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Questions and Answers (Latest Update 2024)
Dividends from a stock company are normally sent to: Beneficiaries Shareholders Policy holders Insureds - Correct Answer ✅Shareholders Which of the following financial products creates an instant estate, no matter when the date of death? Mutual funds Life insurance Certificate of deposit Deferred annuity - Correct Answer ✅Life insurance Which of the following outlines the authority given to the producer on behalf of the insurer? Rebating arrangement Commingling contract Controlled business clause
Questions and Answers (Latest Update 2024)
Producer contract - Correct Answer ✅Producer contract Dividends from a mutual insurance company are paid to whom? Policyholders Beneficiaries Preferred stockholders Stockholders - Correct Answer ✅Policyholders A stock insurance company is owned by its Officers Board directors Policyowners Shareholders - Correct Answer ✅Policyowners A reciprocal insurer typically has an administrator who manages the premiums collected from the group's members. This administrator is called a(n) Reciprocal commissioner
Questions and Answers (Latest Update 2024)
Which group is the Do not Registry designed to protect against? Telemarketers Charities Political organizations Relatives - Correct Answer ✅Telemarketers who regulates an insurer's claim settlement practices? National Association of Claim Adjusters State attorney general National Association of insurance Commissioners State insurance departments - Correct Answer ✅State insurance departments Which of the following is Not an example of risk retention? Becoming aware of a risk and taking no action Self-insuring a given risk Deciding a business deal is risky but going through with it anyways
Questions and Answers (Latest Update 2024)
Not doing a business deal after deciding it would be too risky - Correct Answer ✅Not doing a business deal after deciding it would be too risky Which of the following describes the act of insuring a risk against possible loss? Risk avoidance Risk transfer Hazard reduction Loss management - Correct Answer ✅Risk transfer ABC Company is attempting to minimize the severity of potential losses within its company. The company is engaged in risk Transference Retention Reduction Avoidance - Correct Answer ✅Reduction Which of these statements regarding insurance is false? One way insurers deal with catastrophic loss is through reinsurance
Questions and Answers (Latest Update 2024)
Risk concealing Reinsuring risks Reissuance Risk assumption - Correct Answer ✅Reinsuring risks An insurable risk requires That the chance for both a loss or gain exists The loss must be catastrophic That the chance of loss be calculated that the loss must be incalculable - Correct Answer ✅That the chance of loss be calculated which of the following can be defined as "the potential for loss"? Hazard Risk Transference Peril - Correct Answer ✅Risk
Questions and Answers (Latest Update 2024)
Which term describes the elimination of a hazard? Risk avoidance Risk retention Risk transference Risk pooling - Correct Answer ✅Risk avoidance which one of these is Not considered to be an element of an insurable risk? Speculative risk Pure risk Loss cannot be catastrophic Loss must be due to chance - Correct Answer ✅Speculative risk An insurer has a contractual agreement which transfers a portion of its risk exposure to another insurer. What type of contractual arrangement is this? Coinsurance contract Mutuality agreement Reinsurance contract Reciprocity arrangement - Correct Answer ✅Reinsurance contract
Questions and Answers (Latest Update 2024)
What qualifies as acceptance of an insurance contract offer? A declined policy An issued policy The application an initial premium The initial premium only - Correct Answer ✅An issued policy XYZ Insurance Company gives direct authority to its producers to sell insurance through an agency contract, but nothing is stated regarding the collection of premiums. Which authority grants the producer the right to collect premiums? Implied authority Apparent authority Express authority Assumed authority - Correct Answer ✅Implied authority The power directly given to a producer in an agency contract are called Express Apparent
Questions and Answers (Latest Update 2024)
Implied Assumed - Correct Answer ✅Express In what way are insurance policies said to be aleatory? Only one party makes any kind of enforceable promise Involves the potential for the unequal exchange of value Contract is prepared by only one party Vagueness in a contract's wording is resolved in favor of the policyowner - Correct Answer ✅Involves the potential for the unequal exchange of value An insurance company can be liable for a producer's unauthorized acts Only when a felony is involved When the agency contract is unclear concerning the authority given At anytime Only if the agency contract is unilateral - Correct Answer ✅When the agency contract is unclear concerning the authority given An agreement is reached when an insurance contract is formed. Which of the following is NOT considered to be an element of an agreement?
Questions and Answers (Latest Update 2024)
Intentional - Correct Answer ✅Material A contract is considered void in all of the following situations EXCEPT When one party is a minor When consideration is unequal When consideration is incomplete When agreement cannot be reached between parties - Correct Answer ✅When consideration is unequal An insured is entitled to coverage under a policy that a prudent person would expect it to provide. This principle is called Adhesion Reasonable sensibility Reasonable expectations Insurable interest - Correct Answer ✅Reasonable expectations Use of XYZ Insurance Company brochures, business cards, and rating guides is an example of Expresses authority
Questions and Answers (Latest Update 2024)
Implied authority Apparent authority Fiduciary duty - Correct Answer ✅Apparent authority Ambiguities in insurance contracts are typically interpreted in favor of the insured. This rule is referred to as Subrogation Reasonable expectations Insurable interest Adhesion - Correct Answer ✅Reasonable expectations An appointed producer's implied authority is derived from The NAIC Express authority The insurer's Certificate of Authority Evident authority - Correct Answer ✅Express authority
Questions and Answers (Latest Update 2024)
Representations Warranties Conditional Aleatory - Correct Answer ✅Representations Which of the following would NOT have a restricted ability to enter into a contract? Mentally ill person Minor Person under the influence of alcohol Small employer - Correct Answer ✅Small employer A producer working for an insurance company may be personally liable for Acts performed which are expressed in the agency contract Acts performed which are prohibited in the agency contract
Questions and Answers (Latest Update 2024)
All actions taken on behalf of the insurer Nothing - Correct Answer ✅Acts performed which are prohibited in the agency contract What action can an insurer take to discourage malingering and false disability claims? The insurer can selectively refuse a disability claim for specific diseases The probation period can be increased for specific injuries Limit the amount of benefits an insured can receive from two disability policies with the same insurer A premium rating can be given to an insured with more than one policy with the same insurer - Correct Answer ✅Limit the amount of benefits an insured can receive from two disability policies with the same insurer The health insurance premiums paid for by each partner in a partnership is considered to be Non-deductible
Questions and Answers (Latest Update 2024)
Where the insurer's home office is located - Correct Answer ✅Where the master contract was issued Accident and health insurance claim handling is made more convenient to the insured by utilizing Inspection reports Attending physician statements Medical Information Bureau (MIB) statements Assignment of benefits - Correct Answer ✅Assignment of benefits Which of these is NOT a factor that influences group health insurance underwriting? Physical exams of group members Number of individuals in the group Group's claims experience Type of occupation group is involved in - Correct Answer ✅Physical exams of group members
Questions and Answers (Latest Update 2024)
Under which circumstance can an insurance company offer group Health insurance? The sponsoring group is composed of totally unrelated members The sponsoring group was formed for illegal purposes The sponsoring group provides an employer employee relationship The sponsoring group was formed to purchase group insurance at reduced rates - Correct Answer ✅The sponsoring group provides an employer employee relationship Which of the following statements BEST describes a double indemnity provision in travel accident insurance? Benefits are doubled under certain circumstances stated in the policy If the claim is disputed in court and the insurer loses, the face amount will be doubled Benefits cover two people when traveling
