ALABAMA LIFE AND HEALTH INSURANCE EXAM, Exams of Advanced Education

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ALABAMA LIFE AND HEALTH INSURANCE EXAM

The Fair Credit Reporting Act - what law protects consumers from the circulation of inaccurate or obsolete information? domestic, foreign, and alien - Insurers are classified according to their domicile. What are the 3 types of insurers? Fraternal insurer - what type of insurer is a voluntarily formed organization that provides religious organizations with a representative form of government? mutual company - the type of insurance company organized to return any surplus money to its policyholders is known as what? Insurer - when agents act within the scope of their contract, their actions will be assumed to be the actions of whom? underwriting - what is the name of the process that insurance companies use to determine if an applicant is insurable? provide the aplicant with a Disclosure Authorization Notice - if an insurer needs to obtain information about the applicant from investigators, what is the insurer required to do? Alien - what type of insurer is formed under the laws of another country? adverse selection - when risks with higher probability of loss are seeking insurance more often than other risks, is known as what? when to policy is delivered and the premium is paid. - when does an insurance policy go into effect? an agent or producer - according to the Law of Agency, a principal is represented by whom? pure - what type of risk is insurable? stockholders - who owns stock companies? Insurers - what entities make up the Medical Information Bureau? complete a new application of ask the applicant to initial the correction on the original application - when a change needs to be made on the application for insurance, which is the best method for correcting the information?

Certificate of Authority - in order to transact insurance within a given sate, an alien insurer must first obtain what? Loss - Insurance is a contract that protects the insured from what? when the application is submitted - in insurance, when is the offer usually made on a contract? stock company - the insurer organized to return a profit to the stockholders is what type of insurer? when the insurer approves a prepaid application - in forming an insurance contract, when does an acceptance usually occur? Foreign - an insurance company that is formed under the laws of another state is known as what type of insurer? financial responsibility for loss - insurance is used to transfer what to the company? inspection report - what type of report provided information about the applicants hobbies, habits, and financial status? Certificate of Authority - what document is required for an insurance company to transact insurance? Certificate of Authority - a state issued document empowering an insurance company to become an admitted insurer is called what? Insurance - what do individuals use to transfer their risk of loss to a larger group? Insurer - in the agent/insurer relationship, who is considered the principal? insurance company - whom does an insurance agent represent? express, implied and apparent - what are the three types of agent authority? moral - what type of hazard does an applicant present when they conceal health information? mutual - an insurance policy paid a nontaxable dividend to the insured one year, and nothing the next. From what type of insurer did the insured purchase the policy? Loss - the reduction, decrease, or disappearance of value of the person or property insured is a policy is known as what? physical moral, and morale - what are the 3 types of hazards?

send it back to the applicant to get the signature - if an agent fails to obtain the applicants signature on the application, what must an insurer do? insurable interest and consent - what two elements are necessary for a life insurance contract to have a legal purpose when it is intentional and material - when would a misrepresentation on an insurance application be considered fraud? uncertainty of loss - for the purpose of insurance, what is risk? the agent's - whose responsibility is it to determine that all the questions on an application are answered? restriction of coverage; refusal to accept risk; accepting a risk at a higher rate - what are the strategies used by underwriters to prevent adverse selection? foreign - an insurance company is domiciled in California and transacts business in Nevada. what is the insurer's classification in Nevada? speculative - wagering on a sporting event is known as what type of risk? loss must be: due to chance, definite and measurable, statistically predictable, not catastrophic, coverage cannot be mandatory - what are the 5 characteristics of an ideally insurable risk? morale - a person who does not lock the doors to his or her house shows an indifferent attitude. This person presents what type of hazard? pure risk - a situation in which a person can only experience a loss and no gain presents what type of risk? agreement (offer and acceptance), consideration, competent parties, and legal purpose

• what are the 4 elements of an insurance contract? peril - what is the term for the causes of loss insured against an insurance policy? hazards - conditions that increase the chance of loss are known as what? the agent - if an applicant does not receive his policy, who would be held responsible?

Law of Large Numbers - what law is the foundation of the statistical prediction of loss upon which rates for insurance is calculated? return it to the applicant for completion - what is the best way to handle incomplete insurance applications?