COP 102 General Insurance Practice Exam: Questions and Answers, Exams of Nursing

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COP 102 GENERAL INSURANCE PRACTICE EXAM

QUESTIONS AND ANSWERS| PRACTICE EXAM

QUESTIONS AND ANSWERS ACTUAL VERIFIED

ANSWERS| LATEST UPDATED 2024

When can a representation be altered or withdrawn? It can be altered or withdraw BEFORE the insurance is issued An example of a fiduciary duty is: The trust that your client places in you in regard to handling premiums An appointment as an agent of an insurer becomes effective on the date it is: Signed by the insurer All of the following are ways to reduce risk EXCEPT Buying Insurance Your license will be considered to be inactive when you: No longer have any appointments As specified by the California Insurance Code (CIC), every person must have insurable interest in the person insured at the time of application. Every person has an insurable interest in the life or health of all of the following persons EXCEPT: Their best friend An insurer organized under the laws of another state who is legally transacting insurance in this state is known as: A foreign insurer Making an insured whole again after a loss is known as: To indemnify Explanation: The principle of indemnity states that the purpose of insurance is to restore a person financially to the position they were in before the claim occurred. To make a person whole again financially is to indemnify that person. An individual who assists consumers with enrollment into the programs administered by the California Health Benefit Exchange is known as a(n)?

Certified insurance agent All of the following definitions are correct EXCEPT: A hazard is a cause of loss The chance of loss without any possibility for gain is known as: Pure risk The Insurance Commissioner may deny an insurance license application without a hearing: If the applicant has a final conviction of a felony All of the following are true regarding representations EXCEPT: A hazard is a cause of loss The Department within an insurer that is responsible for the evaluation, selection and classification of insurable risks in a manner that is equitable for insureds and profitable for the insurer is known as the ________ Department: Underwriting Explanation: It is the insurer's underwriting department that is responsible for the evaluation, selection and classification of risks. All of the following are true regarding representations EXCEPT: They must be in writing Which of the following must be printed on every licensee's business cards, written price quotations and printed advertisements: Their insurance license number A cause of loss is also known as a(n): Peril All of the following must be specified in an insurance policy EXCEPT: The financial rating of the insurer Any licensee who diverts fiduciary funds to his or her own use is guilty of: Theft The California Life and Health Insurance Guarantee Association will provide coverage for which of the following types of insurance?

Universal life All of the following are true regarding warranties in an insurance contract EXCEPT: A particular form of words is necessary to create a warranty The neglect to communicate that which a party knows, and ought to communicate, is concealment. Concealment entitles the injured party to rescind the insurance if it is: Intentional or unintentional The uncertainty about loss that exists whenever more than one outcome is possible is called: Risk When an insurer voids an insurance contract due to an intentionally fraudulent omission by the insured of a material fact, it is known as: Rescission Acting as an agent for a nonadmitted insurer in the transaction of insurance in this state is considered to be a misdemeanor unless acting as a: Surplus lines broker Transacting insurance includes all of the following activities EXCEPT: Compiling a list of prospects It shall be the obligation of each agent to preserve and maintain all applicable records in their possession, in addition to those records transmitted to the insurer, at their principal place of business for a minimum of ____ years: 5 When must a licensee notify the Insurance Commissioner of a change of address? Immediately Every licensee shall file with the Commissioner his or her truename and also all fictitious names under which he or she conducts business. The Commissioner may disapprove the use of any true or fictitious name for all of the following reasons EXCEPT: It is the bona fide natural name of an individual When an insurer can no longer meet its financial obligations when they are due, the insurer is considered to be Insolvent

The purchase of insurance does all of the following EXCEPT: Eliminates risk A person shall not solicit, negotiate, or effect contracts of insurance unless the person holds a valid license from the Commissioner authorizing them to act in that capacity. Any person who transacts insurance without a valid license to do so is guilty of a misdemeanor punishable by: Both a fine not exceeding $50,000 and up to 1 year in a county jail A representation that fails to correspond with its assertions or stipulations is: False All are true about transacting insurance EXCEPT: Transacting without a license is felony If a Life insurer issues a policy based upon an application submitted by an agent who is not their appointee, the insurer must send a Notice of Appointment to the Commissioner within: 14 days Under the California Insurance Code (CIC), neither party to a contract of insurance is bound to communicate any of the following EXCEPT: Information known to be material Explanation: Each party of a contract of insurance shall communicate to the other, in good faith, all facts within their knowledge which are or which they believe to be material to the contract. A Life settlement broker represents a life insurance: Policyowner A hazard is defined as something that increases the risk. Which of the following is considered to be a morale hazard? Driving recklessly The primary regulator of all Health Maintenance Organizations (HMOs) in this state is the: California Department of Managed Health Care Explanation: Although the California Department of Insurance is the primary regulator of issuers of most

Preferred Provider Organization (PPO) health plans, HMOs are primarily regulated by the California Department of Managed Health Care. All of the following are required to be included in all insurance policies EXCEPT: The financial rating of the insurance company