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44 Cards in this Set
- Front
- Back
- 3rd side (hint)
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How does contract law benefit the insurance policy which is a contract? |
It removes subjectivity and human wishful thinking from defining what was agreed upon. |
Removes... And human... |
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What type of contract is an insurance policy? |
Contract of adhesion |
Must agree |
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What is not true about indemnity? |
It allows you to be better off or make a profit on a claim. |
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The characteristics of an insurance policy or contract are: |
Offer/Acceptance, Adhesion, Unilateral, Personal, Utmost Good Faith aka All of the answers are correct. |
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The following is not is not a type of insurance |
Liability and collision |
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Who can be an insurer? |
Person over 18, corporation, company, etc... |
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What are the three principle types of loss? |
Loss of property, Human loss, and Liability loss |
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What is the definition of risk? |
The possibility of losing something. |
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What is peril? |
Fire, flood, collision, theft, earthquake, etc; cause of loss; immediate specific event which is cause of a loss aka All answers are correct. |
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What is the definition of a hazard? |
Hazards increase the possibility of a loss. (Remember peril is a cause of loss) |
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What is warranty? |
Implied, expressed, and guarantee that a statement is true aka all answers are correct. |
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What is true about representation? |
Facts an agent communicates must be true, can be altered or withdrawn prior to the policy being insured, statement of fact by one party in order to induce another to enter into a contract aka all answers are correct. |
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What is the law of large numbers? |
Theory of probability, accurate prediction of loss calculation, predict future loss aka All answers are correct. |
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Which are examples of insurance? |
Life, annuities, health, disability, accident, property, casualty aka all answers are correct. |
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Loss exposure for an insurance company is? |
Asset exposure, cause of loss/peril, financial consequences, insured can't make a profit (current value of Item), calculation of lives/premiums needed to be charged to cover loss aka All answers are correct |
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What are "Ideally Insurable Risk" factors? |
Measurable loss, no catastrophic risk, uncertainty, homogeneous unit, economic hardship aka All answers are correct |
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What is a policy? |
A contract of insurance. |
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What is a rider? |
An addition to the contract usually through the underwriters. |
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What are rates? |
Premium charged to the insured. |
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Why do you have to pay more per month instead of yearly? |
Because the company has less money to invest to get an interest return. |
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What is an insurable event? |
Cloud on past Real estate title, future death of an individual, uncertain event past or future to cause a loss to a person with insurable interest or liability that causes financial injury or loss aka All answers are correct |
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What is an insurable interest? |
Financial interest in a person who's death would cause financial hardship, own a car and have responsibility to repair after collision, financial interest aka All answers are correct |
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What does insurance do to identify adverse selection? |
Rate risk loss to eliminate insureds having a higher risk for loss from the general population of the group being insured. |
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What is reinsurance under risk management? |
Under risk sharing |
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How many classes of insurance are there? |
20 |
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What are we talking about, when we mention the insurance market? |
How insurance is sold to all the people who but insurance. |
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What is an insurance agency? |
Agent selling P&C |
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What is a producer? |
Insurance agent, solicitor, life insurance agent; anyone producing sales, Field underwriter aka all answers are correct |
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What is the difference between a broker and an agent? |
Agent works for company/broker works for insured, agent has appointment with company/broker has $10000 bond, both need license to sell life, accident and health. Aka all answers are correct |
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Who does the insurance broker work for? |
The client |
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What law is Errors & Omissions insurance dealing with? |
Tort law |
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Tort Law deals with: |
Liability under Casualty insurance |
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How many years is your license good for before you have to renew it? |
2 years |
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How many Continuing Education hours do you have to do, each renewal period? |
24 hours |
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How many hours of pre-license training do you have to take prior to taking the state test for your first insurance license? |
52 |
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When do you have to take your state test? |
Prior to applying for your license. |
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What is a fiduciary capacity? |
A relationship of trust, with both the client and insurance company, a position of financial trust aka all answers are correct |
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What course is required every renewal period for agents? |
Ethics |
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When was the McCarran Ferguson Act passed? |
1945 |
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What did the McCarran Ferguson Act establish? |
Each state was required to regulate insurance within their borders. |
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What is a non-admitted insurer? |
Ins Co that have not received a certificate of authority to sell insurance in CA |
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Who can sell the insurance supplied by a non-admitted insurer? |
A surplus insurance broker. |
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What does the Gramm-Leach-Bliley Act regulate? |
The safeguard of information collected by the insurance company. |
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What is the responsibility of the insurance companies regarding client information? |
Enact policies to safeguard all private information. |
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