Insurance Concepts and Terminology, Exams of Insurance law

Download Insurance Concepts and Terminology and more Exams Insurance law in PDF only on Docsity!

Personal Lines Insurance Midterm Exam

100% Well Answered.

Risk _________ is when one takes action to prevent or reduce potential loss. - Answer Reduction When the number of similar units increases, the predictability of the loss improves according to the rule of _____ ________. - Answer Large Numbers The insuring of risks that are more prone to losses than average risks is known as? - Answer Adverse Selection A ___________ contract is an arrangement where one insurer transfers or shares risks with another insurer. - Answer Reinsurance _____________ Reinsurance is accepted or rejected by a case by case basis. - Answer Facultative The fact that an insured would profit from a loss, would be a violation of the principle of ___________. - Answer Indemnity The determination of acceptable risks is the primary function of the ___________. - Answer Underwriter Underwriters like to select insureds who's actual losses will be similar to expected losses. True or False? - Answer True When rates cannot be used until they are improved by the department or division of insurance, they are called ____ ________ rates. - Answer Prior Approval The termination of a policy by either the insured or insurer before its expiration date is known as ___________. - Answer Cancellation

When the insurer cancels a property policy, the unearned premium is returned ___ ____. - Answer Pro Rata When an insured requests cancellation of a policy, the unearned premium is refunded to the insured on a _____ _____. - Answer Short Rate A fire is considered to be a _____ of a potential loss. - Answer Cause A document that provides temporary insurance coverage until a policy is issued is known as a ______. - Answer Binder The process by which a disputed claim is decided by a neutral third party is known as ___________. - Answer Arbitration _________ _________ is a situation where there are two causes resulting in a loss, with one of the causes excluded and the other cause of loss not excluded. - Answer Concurrent Causation If two or more policies provide identical coverage for the same risk, the policies are deemed to be __________. - Answer Concurrent Policy A is written for $100,000, and an excess Policy B is written for $200,000 on the same property. In the event of a $20,000 loss, how much will each policy pay? - Answer A= $20,000 ; B= $ A building that has neither occupants nor personal property is ______. - Answer Vacant When property is damaged by fire, the loss is said to be a(n) ______ loss. - Answer Direct If a fire on a premises caused a power outage, which caused meat in the freezer to spoil, would the meat spoilage be considered a direct loss or indirect loss? - Answer Indirect Loss Open peril policies include losses caused by theft. True or False? - Answer True

If a property owner does not desire any deduction for depreciation following a covered loss, he/she should purchase a ___________ ____ policy. - Answer Replacement Cost For replacement cost coverage to apply in dwelling policies, the insured must carry insurance at least equal to ____% of the cost of replacement of the building. - Answer 80 Would a stated amount method of valuation likely be used when insuring gold bullion? - Answer No An ____ policy is one that the value of the subject matter is not agreed upon, but is left to be ascertained in case of loss. - Answer Open A valued policy is one that expresses on it's face an agreement that the thing insured is valued at a specific sum. True or False? - Answer True Insuring more than one property on one policy for a single amount of insurance that applies to all properties covered under the policy is known as _______ coverage. - Answer Blanket The name of the insured is found on the declarations page of the policy. True or False? - Answer True What part or portion of a property policy contains the effective or expiration dates of the policy? - Answer Declarations Are the insurer's limits of insurance amount stated in the conditions part or portion part of the policy? - Answer No The __________ part or portion of a property policy sets forth the rights, rules, duties, and obligations of the insurer and insured to be followed throughout the policy period. - Answer Conditions The ______________ Clause allows insurers to automatically broaden coverage without endorsement on existing policies with no increase in premium. - Answer Liberalization

When a property policy has been in effect less than 60 days and the insurer cancels for the nonpayment of premium, the insurer must give the insured ____ days written notice. - Answer 10 Could an order to vacate the property possibly cause an insurer to cancel a commercial property policy?

• Answer Yes An insurer may nonrenew a homeowners policy with oral notice to the insured. True or False? - Answer False The insured's transfer of right of ownership or interest in an insurance policy to another party with the insurer's written consent is known as an __________. - Answer Assignment ___________ transfers an insured's legal right of recovery to the insurer that paid the claim. - Answer Subrogation When an insured suffers a loss, they are required to prepare an inventory of the damaged property at the ________ request. - Answer Insurers In the event of a loss under a homeowners policy, a proof of loss must be signed and sworn by the _______. - Answer Insured Company A has issued a policy in the amount of $200,000, and company B has issued a policy in the amount of $300,000. under the other insurance or pro rata liability condition or provision, how much will company A pay of a $100,000 loss? - Answer $40, The _________ portion of the policy specifies the causes of loss perils not covered, or property not covered. - Answer Exclusions An amendment that is attached to a property insurance policy to broaden or restrict coverage, or further define certain policy provisions is known as a(n) ___________. - Answer Endorsement Under a commercial lines property policy, who is responsible for making the premium payments in a timely manner? - Answer First Named Insured

Under a commercial lines property policy, who has the right to request changes to the policy, and the right to recieve any return of premium? - Answer First Named Insured Essentially, the higher the deductible that the insured chooses, the higher the premium will be. True or False? - Answer False Whenever a personal property policy is cancelled or surrendered the unearned premium is to be tendered to the insured, or insurance agent of record for the transmittal to the insured, within ____ days of the cancellation or surrender. - Answer 25 A dwelling containing 5 apartment units would be eligible for coverage under a dwelling policy. True or False? - Answer False Losses to the dwelling, other structures, and contents are paid on an actual cash value basis under a DP-

1. • Answer True Smoke damaged caused from nearby industrial operations is or is not covered under a DP-2 broad form.

• Answer Is Not In the event of a loss, the DP-2 broad form pays for damage to the dwelling on a ___________ ____ basis. - Answer Replacement Cost Under a DP-3 special form, fixtures that are apart of a dwelling which is not under construction or that has not been vacant for more than 30 days are covered for theft. True or False? - Answer True The covered causes of loss constitute the major differences between the dwelling forms. True or False? - Answer True The land under a dwelling is not covered as a part of coverage A (dwelling) under the dwelling forms. True or False? - Answer True

Does a detached garage that is used to store commercial equipment qualify for coverage under coverage B other structures of the dwelling forms? - Answer No At the insured's request, coverage C ________ ________ will cover personal property of a guest or servant while on described premises. - Answer Personal Property Coverage C under the dwelling forms extends to include personal property of a tenant or boarder of the insured. True or False? - Answer False The DP-1 basic form applies coverage to property that is removed because it is endangered by a covered peril. True or False? - Answer True Under the DP-2, and DP-3, endangered property removed to another location is covered for 30 days while at the removed location. True or False? - Answer True Collapse of a structure due to hidden decay is covered under all dwelling forms. True or False? - Answer False The earth movement exclusion does not exclude damage by an explosion that ensues from the earth movement. True or False? - Answer True Water that backs up through sewers and drains causing damage is covered under a DP-3. True or False? - Answer False Under the HO-2, would the explosion of a hot water heater that causes major damage to the house be covered? - Answer Yes Under a homeowners policy, for a claim of more than $2,500 on the dwelling to be paid on a replacement cost basis, the repairs must ____ __________. - Answer Be Completed Does an HO-3 policy provide coverage against damage caused by falling objects? - Answer Yes

The perils included in the HO-3 policy for coverages A and B are the special _____ perils. - Answer Open The HO-4 policy provides _____ ____ peril coverage on the personal property. - Answer Broad Form Does the HO-4 provide coverage for real property? - Answer No A client desires open peril coverage on both their dwelling and personal property under their homeowners policy. which homeowners form would give them this coverage? - Answer Form 5 The main difference between an HO-3 and an HO-5 is that the HO-3 insures personal property for broad form perils and the HO-5 insures personal properties for open perils. - Answer True The HO-6 provides _____ ____ _____ peril coverage on personal property. - Answer Broad Form Named The HO-6 condominium unit-owners form provides coverage for common grounds which are next to the insured's property. True or False? - Answer False A homeowner has an insured loss of $10,000 damage to the home, $2,000 damage to personal property and $2,000 additional living expenses. the policy carries a $100 deductible. how much will the policy pay? - Answer $13, The HO-3 policy provides theft coverage for building supplies that are next to the house which are to be used in construction. True or False? - Answer False Under the homeowners policy, vandalism and malicious mischief coverage is excluded if the property is ______ for more than 60 days. - Answer Vacant A homeowners policy that is written for $100,000, has the detached garage completely destroyed by fire. what is the most the policy will pay? - Answer $10,

What percentage of coverage A is allowed for coverage B (other structures) under a homeowners policy?

• Answer 10 The territorial limits for personal property under the homeowners policy is _________. - Answer Worldwide Under section 1 of a homeowners policy, there is a special limit under coverage C on watercraft of _____.
• Answer $1, Under section 1 of a homeowners policy, there is a special limit for the theft of firearms. True or False? - Answer True Is there coverage for windstorm damage under a homeowners policy on personal property contained in the building unless an opening is caused by a covered peril? - Answer No An insured's camera that is stolen by a visitor would be covered under the homeowners policy. True or False? - Answer True Additional living expense under a homeowners policy is found in coverage ___. - Answer D An insured has a homeowners policy and suffers a direct loss causing the insured to seek other living arrangements. the insured's normal househould expense is $500 per month. however the new arrangements cost is $700 per month. how much will the insured collect monthly from the homeowners policy? - Answer $ Do payments under coverage D of the homeowners policy affect the policies liability limits? - Answer No When a covered loss exhausts the applicable coverage limit, debris removal coverage will pay up to an additional % of coverage A. - Answer 5 Under a HO-3 policy, the maximum amount for any one tree, shrub or plant is $. - Answer 500

when an insured removes insured property from the premises because it is endangered by a covered peril, the homeowners policy provides coverage for ____ days at the location the property is removed to.

• Answer 30 The HO-2 policy will cover the collapse of a patio that is caused by the weight of water that has collected on the roof. True Or False? - Answer False Under a homeowners policy, landslides would be covered. True or False? - Answer False Ensuing loss by fire, explosion or glass breakage resulting from earth movement is covered under a homeowners policy even though the earth movement itself is excluded. True or False? - Answer False Is the backing up of sewers covered under a homeowners policy? - Answer No If an insured has maintained heat in an unoccupied dwelling, damaged caused by freezing of the plumbing system would be covered under the HO-3 policy. True or False? - Answer True Would a television set be covered on a replacement cost basis under the replacement cost endorsement? - Answer Yes Under the homeowners policy, the personal property replacement cost endorsement would provide replacement cost on an insured's pet. True or False? - Answer False Under the scheduled personal property endorsement, newly aquired fine arts need to be reported to the insurer within ____ days. - Answer 90 The california residential property insurance disclosure form is required by california law and becomes an actual part of an insured's homeowners policy. True or False? - Answer False ____ insurance includes physical damage to machinery and fitting of the vessel. - Answer Hull

Ocean marine hull insurance is typically written to cover a particular voyage or for one year. True or False? - Answer True If cargo is shipped FOB point of destination, the seller retains the cost of transportation and insurance during shipping. True or False? - Answer True What basis of valuation is typically used when writing hull and cargo insurance? - Answer Valued The fine arts floater provides automatic coverage for ____ days for newly acquired items. - Answer 90 Under a musical instrument floater, how many days is there automatic coverage for newly acquired musical instruments? - Answer 30 Most boat owners policies provide physical damage coverage on an open peril basis. True or False? - Answer True A yacht policy is an inland marine form and provides property hull coverage only. True or False? - Answer False Individuals who own property in participating communities are eligible to purchase flood insurance. True or False? - Answer True Mudslides caused by accumulation of water are considered a covered peril under the national flood insurance program. True or False - Answer True Are kitchen appliances covered under the national flood insurance program? - Answer Yes Wharves, piers and docks are, or are not covered under a national flood insurance program. - Answer Are Not The national flood insurance policy covers water damage from a sewer. True or False? - Answer False

The national flood insurance program is available for private dwellings only. True or False? - Answer False Would the flood policy cover a flood that is confined to the insured's premises? - Answer No Attached structures and utility tanks are insured as a part of coverage ____(mobile home) under a mobile home owners policy. - Answer A The transportation / permission to move endorsement provides coverage for the collision,upset, stranding or sinking of a mobile home that is being moved to a new location for up to ____ days. - Answer 30 A tort is a _____ or _______ wrong commited by one person against another. - Answer Civil Private Libel, slander and false arrest are categorized as ___________ torts. - Answer Intentional An unendorsed liability policy provides coverage for _____________ torts. - Answer Unintentional In establishing negligence in liability insurance, it helps if the claimant can prove the act was intentional. True or False? - Answer False _________ liability establishes that one can be held legally liable for the acts of another, such as a principal for the acts of its agents. - Answer Vicarious A willful, wanton or reckless disregard of the consequences affecting the life or property of another is the definition of _____ negligence. - Answer Gross Do specific damages include pain and suffering? - Answer No _________ damages are damages awarded as punishment for extreme objectional conduct by a negligent party. - Answer Punitive

Would bodily injury coverage also include a breach of contract? - Answer No Bodily injury claims may include loss of earnings. True or False? - Answer True Personal injury includes bodily injury. True or False? - Answer False The dissemination of any written or printed material tending to unjustly injure a person's reputation , defines _____. - Answer Libel A person is obligated to a certain standard of conduct for the protection of others by legal duty. True or False? - Answer True When a stairway does not contain enough lighting, the owner has not fufilled the required standard of care. True or False? - Answer True _________ ______ is defined as an unbroken, natural and continuous sequence that produced injury and without which the result would not have occured. - Answer Proximate Cause ____________ negligence, under common law, denies recovery for damages caused by a negligent party if the claimant was also negligent. - Answer Contributory _________ defense in liability insurance are determined by the legislature. - Answer Statutory under __________ negligence, damages are reduced in proportion to the degree of negligence. - Answer Comparative Under comparative negligence, damages awarded vary depending on each states statues. True or False?

• Answer True Employers are __________ liable for employees work-related injuries. - Answer Absolutely

______ liability is a legal doctrine that holds a manufacturer legally liable for injuries to a customer whether or not the manufacturer's product was defective. - Answer Strict The two types of no fault systems are _____ and ________. - Answer Pure Modified Under pure no fault, the tort system is completely abolished for bodily injuries caused by auto accidents. True or False? - Answer True Supplementary payments are not paid in addition to other limits of liability. True or False? - Answer False Exclusions may deny coverage for certain locations as well as certain persons. True or False? - Answer True When the limits of bodily injury and property damage are specified separately, they are known as _____ limits. - Answer Split When the limit of the policy can be applied to either bodily injury or property damage, wherever needed, or in any combination, this is a ________ ______ limit. - Answer Combined single Under a liability policy, an assignment of interest takes effect after the _______ consents. - Answer Insurer The process whereby an insurer seeks to recover against a third party that has caused it to pay a claimed to insured is known as ___________. - Answer Subrogation A household employee who is purchasing something for the insured would be considered a _________ employee. - Answer Residence Under the homeowners policy, medical payments to others applies to expenses that are incurred within ___ years of an accident. - Answer 3

Would the medical payments under section 2 of a homeowners policy cover loss of income of an injured person? - Answer No Would an insured's overnight guest be covered for medical payments under a homeowners policy? - Answer Yes Claims payed under section 2 of a homeowners policy are subject to a standard $250 deductible. - Answer False First aid expenses under section 2 of a homeowners policy would cover a neighbor that gets injured while helping the insured install a carpet. True or False? - Answer True Under section 2 of a homeowners policy, damage to property of others (additional coverages) duplicates coverage that is included in section 1. True or False? - Answer False Damages caused intentionally by an insured who is 12 years of age would be covered under damage to property of others (additional coverages). True or False? - Answer True Section 2 of a homeowners policy covers damage to property of the insured. True or False? - Answer False A motorized golf cart used by a retired homeowner to make trips to the corner grocery would meet the definition of covered vehicle under section 2 of a homeowners policy. True or False? - Answer False Would a 12 foot kayak be considered automatically as covered watercraft under section 2 of a homeowners policy? - Answer Yes Section 2 of a homeowners policy excludes payment for bodily injury or property damage arising out of the use, sale, manufacture, delivery, or possession of a controlled substance. True or False? - Answer True Under the business pursuits endorsement, must the business be named on the endorsement? - Answer Yes

Malicious prosecution would meet the definition of personal injury and be a covered act under the personal injury endorsement. True or False? - Answer True A liability loss arising out of the use of a sailboat in a racing competition would be covered under the watercraft liability endorsement to the homeowners policy. True or False? - Answer True The home business endorsement provides coverage for the professional liability for services rendered by the insured for a business conducted form, the dwelling. True or False? - Answer False Under the personal auto policy, a motorcycle would be included in the definition of newly acquired auto. True or False? - Answer False Part A- liability coverage of a personal auto policy includes both bodily injury and ________ ______ coverage. - Answer Property Damage Auto _________ coverage would provide coverage when the insured is involved in an at-fault accident. - Answer Liability Part A- liability coverage of a personal auto policy would provide both property damage and bodily injury liability in the event that the insured's 16 year old son was driving the car. True or False? - Answer True A personal auto policy is written with a single limit of $100,000 for liability. there are six people injured for a total of $150,000. how much will the policy pay? - Answer $100, The personal auto policy is excess in respect to liability coverage when the insured leaves their vehicle at a garage and the vehicle is involved in an accident. True or False? - Answer True The coverage B medical payments limit is the maximum the insurer will pay for ___ person injured in any ___ accident. - Answer One One _________ ________ laws are designed to protect an insured when involved in an accident with drivers who have no insurance. - Answer Uninsured Motorists

Would an insured's uninsured motorists coverage proetect the driver of the uninsured vehicle? - Answer No Is a vehicle owned by a self insurer considered to be an uninsured motor vehicle? - Answer No Underinsured motorists coverage protects the insured when the other driver's car has inadequate bodily injury coverage. True or False? - Answer True In california, if a vehicle is not insured for collision, uninsured motorists property damage coverage pays up to $3,500 of the actual cash of the damage to the insured vehicle. True or False? - Answer True If an insured has an auto policy that provides for physical damage, hits a tree while driving a borrowed car, the damage would probably be covered under the _________ part of coverage for damage to your auto. - Answer Collision The upset or overturn of a vehicle is covered under _________. - Answer Collision Damage to a covered vehicle caused by earth movement is payable under collision coverage. True or False? - Answer False Flood is a cause of loss covered by other than collision (comprehensive). True or False? - Answer True Deductibles in auto insurance tend to _____ premiums. - Answer Lower If an insured does not have collision coverage on an existing vehicle, the collision coverages on a newly acquired auto begins on the date the insured becomes the owner, provided the insured requests the coverage within ___ days of becoming the owner. - Answer 4 The personal auto policy will pay up to $___ per day up to $____ for transportation expenses incurred because of a collision loss as long as collision coverage is provided in the declaration. - Answer $ $

Collision damage that occurs when a covered auto is being used in a share- the- expense car pool would be covered. True or False? - Answer True Part D of the personal auto policy will pay for loss of tapes, records, and discs used with electronic equipment designed for the reproduction of sound. True or False? - Answer False The standard basis of valuation under part D coverage for damage to your auto, is the lesser of the ______ ____ ____ of the vehicle, or the amount necessary to repair, or replace the vehicle. - Answer Actual Cash Value After an accident, the insured is required to obtain a complete physical examination at the insured's expense. True or False? - Answer False When an insured is involved with a hit and run driver, he / she must promptly notify the ______. - Answer Police A non endorsed personal auto policy provides coverage in mexico. True or False? - Answer False In california an auto insurer may cancel the policy by giving at least ____ days notice for nonpayment of premium, and at least ____ days in all other cases. - Answer 10 20 _________ coverage applies when the extended non owned coverage for a named individual is used. - Answer Liability The towing and labor endorsement limit applies per __________. - Answer Occurrence The miscellaneous type vehicle endorsement is not intended to be used for snowmobiles. True or False?

• Answer True The miscellaneous type vehicle endorsement amends the definition of covered auto to include recreational type vehicles such as motor homes. True or False? - Answer True

The named non owner endorsement may be used to provide liabilty, _______ ________, and _________ motorists coverages. - Answer Medical Payments and Uninsured The type of insurance offered by most auto dealerships and lessors that insures for the difference between what the insured owes on the vehicle and what the insurer says the vehicles actual cash value is in the event of a loss is known as ___ insurance. - Answer GAP Minimum financial responsibility requirements in california for auto insurance is $15,000 per person for BI, $30,000 per accident for BI, and $_____ per accident for PD. - Answer $5, Any broker-agent licensed to transact auto insurance in california and certified by the manager, may submit applications to the california automobile assigned risk plan. True or False? - Answer True Any person who qualifies for a good driver discount policy will be charged at a rate at least ____% below the rate an insured would otherwise be charged for the same coverage. - Answer 20 Low cost auto insurance is a pilot auto insurance program available to residents of certain counties who live in a household that gross annual income does not exceed ___% of the federal poverty level. - Answer 250 The purpose for a personal umbrella policy is to cover large and catastrophic losses. True or False? - Answer True Umbrella policies may cover losses excluded by the underlying policy. True or False? - Answer True Umbrella liability policys typically only cover losses insured by the primary insurance. True or False? - Answer False Would a personal umbrella policy cover libel and slander? - Answer Yes Failure of the insured to maintain required underlying insurance would likely result in an umbrella loss being ________. - Answer Excluded

Commercial umbrella policies are not ____________ within the industry. - Answer Standardized A commercial umbrella policy does not include workers compensation benefits. True or False? - Answer True The physicians, surgeons, and dentists professional liability policy covers injuries which result from the lack of professional skill or judgement. True or False? - Answer True The consent to settle a loss provision, may appear in some _______ professional policies. - Answer Medical If an insurance producer were to fail to renew a policy, it could be covered under his / her errors and omissions liability policy. True or false? - Answer True Lawyers professional liability covers bodily injury and property damages losses. True or False? - Answer False What type of liability policy would a realtor purchase to protect him / herself professionally? - Answer Errors and Omissions Would a directors and officers liability policy include coverage for errors in preparing a financial statement? - Answer Yes _________ liability insurance is needed to protect employers from claims which arise from their duties under the employee retirement income security act of 1974 (ERISA). - Answer Fiduciary In surety bonding, the party whose obligation is guaranteed is the _________. - Answer Principal In surety bonding, the third party to whom the surety is answerable is the _______. - Answer Obligee In bonding,the party for whose benefit the bond is written is the obligee. True or False? - Answer True

the insurer under a surety bond is called the ______ or guarantor. - Answer Surety In comparing an insurance contract to a bond, the insurer/insured relationship in insurance is similar to the ______ / _______ relationship in a bond. - Answer Surety/Obligee Generally surety bonds are written for the duration of the contract. True or False? - Answer True A labor and material bond is a type of ________ bond. - Answer Contract Farm liability policies include liability arising from the sale of farm products, provided that the products have not been processed. True or False? - Answer True The type of insurance in ocean marine operations that cover legal liability imposed on the insured for damages arising out of the operation of the insured vessel is called __________ and __________ insurance. - Answer Protection Indemnity Protection and indemnity insurance would cover damage or loss to cargo arising out of the insured's negligence. True or False? - Answer True Liability coverage under a boat owners policy includes operations liability, passenger liability,and flotilla liability. True or False? - Answer True A stock insurance company is owned by its ____________. - Answer Shareholders A mutual insurance company is owned by its _____________. - Answer Policyholders In this state,when an insurer becomes licensed to do business here, it is a(n) ________ insurer. - Answer Admitted An agent or broker, other than a surplus lines broker, who solicits or negotiates insurance with a nonadmitted insurer is guilty of a ___________ by california law. - Answer Misdemeanor

Independent agents are actually employees of the insurer. True or False? - Answer False The ________ division of an insurance company gathers and interprets information to aid in rate- making / setting. - Answer Actuarial When a producer / agent violates the power expressed in his / her agency contract, can he / she be held personally liable? - Answer Yes Does a producer / agent have the responsibility to promote profitable policies? - Answer No A producer's / agent's powers that are stated in his / her agency contract are called _______ powers. - Answer Express A producer's / agent's binding authority is stated in his / her contract with the insurer. True or False? - Answer True When a producer / agent compares benefits of several policies he / she is guilty of misrepresentation. True or False? - Answer False Tort law pertains to the formation and enforcement of contracts. True or False? - Answer False The value that each party gives the other in an insurance contract is said to be the _____________. - Answer Consideration The insurers promise to pay a covered loss, and the insureds payment of the premium, are examples of _____________. - Answer Consideration Can one purchase an insurance policy to cover losses which result from an operation of drug smuggling?

• Answer No Under aleatory contracts, the consideration may be _______. - Answer Unequal

A contract whereby only one party is bound to future performance is said to be a(n) __________ contract. - Answer Unilateral When an insurance policy is not clear, the court will usually interpret in favor of the insured, because the policy is a contract of ________. - Answer Adhesion The insurance contract is a contract of ______ ____ _____ because each party is entitled to rely upon the representations of the other, and to rely upon the assumption that there has been full, fair, and honest disclosure. - Answer Utmost Good Faith A representation can be altered or withdrawn only before policy issuance. True or False? - Answer True When someone provides misleading or false information to the insurer on the application, it is considered _________________. - Answer Misrepresentation A breach of a warranty under an insurance contract may ____ the contract. - Answer Void When an applicant intentionally fails to make known a material fact, this is known as ___________. - Answer Concealment an insurers failure to enforce a provision in an insurance contract is called a(n) ______. - Answer Waiver A legal doctrine that prevents the denial of a fact if the fact was admitted to be true by a previous action is known as an ________. - Answer Estoppel Risk retention groups are covered by insurance insolvency guaranty funds. True or False? - Answer False The McCarran-ferguson act, a.k.a public law 15, returned responsibilty for insurance regulation to the federal level in 1945. True or False? - Answer False

Willful violation of the requirement for a certificate of authority is a public offense, punishable by ____________or by fine, or both. - Answer Imprisonment It is prohibited to charge a different rate for males and females based on separate distinct mortality tables. True or False - Answer False Every insurer admitted to do business in this state must maintain a unit to investigate possible fraudulent claims by insured. True or False? - Answer True If an insured signs a claim form for a claim which is fraudulent, the insured may be found guilty of _______. - Answer Perjury The california _________ ____ presents the laws of the state of california that relate to insurance principles and practices. - Answer Insurance Code Does the comissioner have the authority to change the california insurance code? - Answer Yes The california insurance code identifies many unethical practices and serves as a complete guide to ethical behavior. True or False? - Answer False An insurer can not escape the condition of insolvency by being able to provide for all its liabilities and reinsurance of all outstanding risks. True or False? - Answer True The purpose of the california insurance guaranty association is to establish a mechanism to pay claims that are unpaid as a result of __________ of a member insurer. - Answer Insolvency Insurers and agents may use the existence of the california insurance guaranty association to induce prospects to purchase insurance policies. True or False? - Answer False A person appointed and authorized by an insurer to act as its representative and to receive commissions from the sale of insurance, other than life insurance, is known as an _________ _____. - Answer Insurance Agent

In this state a ____ and ________ broker-agent may transact health insurance, property insurance, and automobile insurance. - Answer Fire Casualty An insurance solicitor may be employed by only one agent / broker at any one time. True or False? - Answer True Surplus line brokers transact business with ___________ insurers. - Answer Nonadmitted __________ is the termination of a contract from the beginning. as if it never existed. - Answer Rescission A standard market insurer is an insurer that offers rates for insurance coverage to insureds who have an average, or better than average loss experience. True or False? - Answer True Materiality of representation is determined by the same rule as materiality of a concealment. True or False? - Answer True The making of claim payments by an insurer that are not accompanied by statements containing the coverage, under by which payments are being made is an unfair claim settlement practice. True or False?

• Answer True An auto insurer may require that an automobile be repaired at a specific repair shop. True or False? - Answer False Agents are required to keep records of any compensation they accept for their services involving premium financing. True or False? - Answer True It is permissible for a person engaged in the business of financing the purchase of real or personal property to require the purchaser to obtain insurance for such property through a particular agent or broker. True or False? - Answer False

Applicants for a fire and casualty broker / agent license must obtain ___ hours of classroom instruction on fire and casualty topics, and ___ hours of instruction on ethics and code. - Answer 40 12 A personal lines licensee may write umbrella or excess liability coverage over one or more underlying auto or residential property insurance policies. True or False? - Answer True The insurance department may deny any agents license application without a hearing if the applicant has had a previous license application denied for cause within ___ years. - Answer 5 A licensee's appointment becomes effective on the date it is signed by the _______. - Answer Insurer An agents license is considered ________ when he / she has paid renewal fees but no insurer appointment is in force. - Answer Inactive An individual licensed as both a fire and casualty agent / broker and life and / or accident and health agent can satisfy the continuing education requirement by completing courses approved for either license. True or False? - Answer True The commissioner may not disapprove of the use of any name that a licensee may use if that name is their true name. True or False? - Answer False Every licensee must __________ notify the commissioner, in writing, of any change of address. - Answer Immediately A person advertising on the internet and providing an insurance premium quote to a california resident is deemed to be transacting the business of insurance in california. True or False? - Answer True The california insurance code states that any person may be insured, except a ______ _____. - Answer Public Enemy Market conduct regulations are state laws that regulate insurer practices regarding, underwriting, sales, rate making, and claims handling. True or False? - Answer True