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87 Cards in this Set
- Front
- Back
in order to be insured an induvidual has to have a resource that he may lose if an even occurs. What term describes this concept?
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insurable interest
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What is the legal concept in which an individual is responsible for the harm that occurred because the individual failed to perform the actions that a reasonable person in a similar situation would take to ensure the safety of other individuals
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negligence
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A legal concept in which an indivudal must COMPENSATE an individual for the harm that he or she caused
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liability
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a legal concept in which an individual is responsible for the harm that occurred because the individual was performing an extremely hazardous activity, which caused harm even though the individual took all of the necessary precautions
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absolute liability
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a legal concept in which an individual is responsible for the harm that occurred due to the actions of another individual because the individual is responsible for the SUPERVISION OR CARE of the individual who caused the harm
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vicarious liability
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The declarations section of an insurance policy that identifies the specific resources and/or perils that the policy covers
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insuring agreement
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the declarations section of an insurance policy that identifies the specific resources/perils that the policy does not cover
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exclusions
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The declarations section of an insurance policy that identifies what key items
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-who is covered
-name of insurer -amount of coverage -phone # & address -cost of premium -specific property covered |
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an individual who is covered by an insurance policy that he or she does now own but is listed on the policy
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additional insured
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an individual or organization that is covered by the policy because the individual or organization owns the policy
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named insured
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individual or organization that is covered by the policy because the individual or organization is considered to be the PRIMARY owner
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first named insured
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covered by the policy because the individual or organization owns the policy but the individual or organization is not considered to be the primary owner
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an additional named insured
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a provision that allows an insurer to acquire the rights to a piece of damaged property in exchange for a payment equal to the amount necessary to replace the property
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salvage provision
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a provision that prohibits the policyholder from transferring the policy to another individual or organization during his lifetime unless the insurer has agreed to the transfer in writing
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assignment provision
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provision that allows an insured individual or organization to collect the benefits of the policy even if the individual or or organization decides to abandon the property
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abandonment provision
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a provision allows an insurer to seek the amount that it paid for a claim from the individual who caused the harm if the insurer is required to pay a claim related to an incident for which the insured individual(s) are not responsible
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subrogation provision
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The Dwelling policy Broad form (DP-1) will only cover damage to a dwelling that occurs as a result of
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a fire, internal explosion, and/or lightning
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The Dwelling policy Broad form (DP-2) will only cover damage to a dwelling that occurs as a result of (COVERS THE MOST!!)
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-accidental dischararge or overflow of liquids
-an aircraft; burglary; civil commotion; an explision; falling objects; a fire; freezing pipes; hail; lightning; smoke; sudden and accidental damage from electrical current; cracking; a sprinkler system; vandalism |
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Dwelling policy Broad form with extended coverage will cover
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an aircraft, civil commotion, an explosion, hail, smoke, vehicles, and/or wind
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The Dwelling policy Broad form (DP-3) will only cover damage to a dwelling that occurs as a result of
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any even that is not specifically excluded in the policy
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A type of dwelling coverage in which an insurer agrees to pay an amount equal to the income that a landlord would lose if the landlord's rental property is damaged and a tenant is no longer able to occupy the property
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Fair Rental Value
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A type of dwelling coverage in which an insurer agrees to pay an amount equal to the value of an individual's personal property if the individual's property is stolen
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Broad Theft Coverage
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A type of dwelling coverage in which an insurer agrees to pay an amount equal to the amount that an individual would need to pay to LIVE in another location if the individual's property is damaged
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Coverage E - Additional Living Expense
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A type of dwelling coverage in which an insurer agrees to pay some of the MEDICAL expenses for an individual other than the insured if an individual is injured on the insured individual's property
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Coverage M - Medical Payments to others
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an exclusion that states that an insurer will not pay any claim in which an individual's property is damaged as a result of A LAW OR ORDINANCE THAT COMPELS AN INDIVIDUAL TO MODIFY OR REMOVE THE STRUCTURES
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Building Law exclusion
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an exclusion that states that an insurer will not pay any claim in which an individual's property is damaged or seized by the government
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Governmental Action exclusion
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an exclusion that states that an insurer will not pay any claim in which an individual's property is damaged as a result of an earthquake, mudslide. landslide, sinkhole
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An Earth Movement exclusion
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an exclusion that states that an insurer will not pay any claim in which an individual's property is damaged as a result of the fact that the individual did not maintain the property
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A Neglect exclusion
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Which Home Owners form covers damage to a condo owner's PROPERTY that occurs as the result of any event that is not specifically excluded in the policy
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HO-6 Unit Owner's form
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Which Home Owner's form covers damage to a tenant's PROPERTY that occurs as the result of an aircraft, civil commotion, an explosion, fire, hail, lightning, smoke, theft, vandalism, vehicles, and/or wind
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HO-4 Contents Broad form
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Which Home Owner's form covers damage to the DWELLING that occurs as the result of any event that is not specifically excluded in the policy and damage to the PROPERTY inside the dwelling that occurs as the result of an aircraft, civil commotion, an explosion, fire, hail, lightning, smoke, theft, vandalism, vehicles, and/or wind
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HO-3 Special form
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Which Home Owners form covers damage to the DWELLING and PROPERTY inside the dwelling that occurs as the result of any event that is not specifically excluded in the policy
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HO-5 Comprehensive form
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What means conducting business in accordance with current rules and laws set by government regulatory agencies and the courts
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compliance
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standards of conduct and moral judgement
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ethics
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legal term that describes the relationship between two parties
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agency
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what is the term to describe how an insurer appoints an individual to act on its behalf
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agency contract
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an individdual whose position and responsibilities involve a high degree of trust and confidence (trustees, guardians & executors)
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fiduciary
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the name for the fact that a producer must sell the kind of policies that best fit the prospect's needs and in amounts that the prospect can afford
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needs selling
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what is given when the applicant pays the initial premium at the time the application for a policy is signed
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conditional receipt
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what is the term for informing the prospect or client of all facts involving a specific policy or plan so that an informed decision can be made
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full disclosure
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what is the name for the watchdog group whose member companies agree to adhere to and enforce ethical principles
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Insurance marketplace Standards Association (IMSA)
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what act deals with the inappropriate use of advertising
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Unfair Trade Practices Act
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any written or oral statement that does not accurately describe a policy's features, benefits, or coverage
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misrepresentation
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any false, maliciously critical, or derogatory communication that injures another's reputation, fame or character
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defamation
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what is the term if the buyer of an insurance policy receives any part of the producer's commission or anything else of significant value as an inducement to purchase a policy
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rebating
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the unethical act of persuading a policyowner to drop a policy solely for the purpose of selling another policy without regard to possible disadvantages to the policy owner
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twisting
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a resident producer license must meet what two requirements
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may either reside in PA or have their principal place of business in this state
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in what two situations is it not required to be licensed as a manager or exclusive general agent
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-a licensee who has limited underwriting authority
-a manager or agent who started before Dec 22, 1965 |
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Which of the following can not be issued a temporary license:
-surviving spouse of a decesed producer in order to sell the business -a deceased producer's personal representative until new personnel is trained to run the business -a person holding a power of attorney for a producer in the armed forces -a person selling insurance for the estate of a deceased producer |
a person selling insurance for the estate of a deceased producer
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which of the following is not a reason for a license to be suspended or revoked
-making a factual but subjective comparison of two policies -intentionally violating a cease and desist order -making false statement in a license application -violating an insurance regulation |
making a factual but subjective comparison of two policies
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increases the chance of loss
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hazard (leaving the door unlocked)
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the chance of loss
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risk
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a means of transferring the risk of loss
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insurance
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the cause of loss
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peril (types of peril - fire; flood; collision; theft)
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states that there must be an adequate spread of risk for insurance to be effective
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law of large numbers - more examples used, more reliable the statistic (predict the number of losses; predict the charge for premium)
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installing an automatic sprinkler system is an example of what
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reduction (can not avoid risk but can reduce risk)
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deciding not to produce a product due to serious potential side effects
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avoidance (avoid the risk of being sued)
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person in good health cancels health insurance policy - what risk management method
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retention (retaining risk)
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under what regulation in PA does it state that insurers must maintain specified minimum levels of capital stock and surplus
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Regulation of insurer solvency
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Who regulates insurance rates to avoid excessive, inadequate, or unfairly discriminatory rates
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Casualty and Surety Rate Regulatory Act
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who must an insurer notify when they terminate a producer's appointment
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the Commissioner and the producer
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which of the following is not a power and duty of the Insurance Commissioner
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-issuing cease and desist orders
-prosecuting producers who violate state insurance laws -conducting complaint hearings -appointing examiners |
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what unfiar practices is when a producer offers, promises, allows, gives, sets off or pays a rebate on the contract of insurance
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rebating
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what unfair insurance practice is the purchase of insurance from a financial institution or from a designated insurer or producer as a condition of any loan or deposit transaction
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Tie-in sales
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what unfair insurance practive occurs when a producer makes, issues, circulates, or uses any written or oral statement misrepresenting the terms of a policy or contract of insurance
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misrepresentation
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what unair insurance policy occurs when a producer misrepresents or provides an icomplete comparison of policies to induce the policyholder to lapse, forfeit or surrender his insurance to take out a similar policy in another company
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twisting
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nonpublic personal financial information about individuals
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Privacy of Consumer Financial Information
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what is the term for an instruction by the consumer to the licensee not to disclose nonpublic personal financial informationabout that consumer to a nonaffiliated third party
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Opt out
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When can a producer share a commission with an unlicensed person
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-if licensee was held at time of sale
-referring person can receive a one time nominal set fee |
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when a personal fire insurance policy is cancelled because the insured's acts increase the hazard insured against, how many days' notice must be provided to the insured
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30 days
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When an automobile policy is cancelled for a reason other than non payment of premium, how many days' notice must be provided to the insured
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60
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If an insured's driver's license has been suspended, the insurer may cancel the automobile insurance policy by giving how many days' notice?
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15
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what are the minimum limits of liability any individual must provide for bodily injury and property damage?
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15/30/5
$15000 per person bodily injury $30000 per accident for body injury $5000 per accident property damage |
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purchased in the normal or standard market
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Pennsylvania Fair Plan Act
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After an accident, what is the waiting period before the insured can apply for income loss benefits
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5 work days
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what must occur in order for funeral expenses to be paid
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death within 24 hours of accident
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When an automobile policy is cancelled for a reason other than non payment of premium, how many days' notice must be provided to the insured
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60
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If an insured's driver's license has been suspended, the insurer may cancel the automobile insurance policy by giving how many days' notice?
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15
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what are the minimum limits of liability any individual must provide for bodily injury and property damage?
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15/30/5
$15000 per person bodily injury $30000 per accident for body injury $500 per accident property damage |
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What act is intended to provide property owners with fire, extended coverages, vandalism and malicious mischief coverage when insurance is unable to be purchased in the normal or standard market
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Pennsylvania Fair Trade Ace
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After an accident, what is the waiting period before the insured can apply for income loss benefits
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5 work days
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an insurer must notify an insured at least how many days before increasing the premium on a commercial casualty insurance policy?
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30
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Which agency provides motor vehicle insurance to those applicants who would otherwise by uninsurable?
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Pennsylvania Auto Assigned Risk Plan
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When an employer must provide workers' compensation insurance but is unable to do so through normal channels, which organization can provide the required coverage?
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State Workers Insurance fund
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What term describes a producer who converts premiums for his own use
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Breach of fiduciary duty
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What insurance option lets the insured seek recovery for all medical and other out-of-pocket damages, pain and suffering, and other nonmonetary damages as a result of injuries caused by other drivers
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Full Tort option
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With Crop insurance, at what percent can crops be insured of their expected value?
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75%
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