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32 Cards in this Set
- Front
- Back
Who is the, Insured? |
The person that the insurance company is covering. |
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Who is the insurer? |
The Insurance Company |
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Who is the producer? |
The agent |
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As an Insurance Producer or Agent, who do you represent? The insurer or the insured? |
The insurer |
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What is Insurance? |
Protection against a financial loss. |
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Why do people generally buy insurance? |
Because of potential risk. |
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What is Risk? |
The chance of loss or uncertainty of loss. |
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What are the two types of Risk? |
Pure Risk, and Speculative Risk. |
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What is Pure Risk? |
Chance of loss with no possible of gain. |
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What is Speculative Risk? |
The chance for both loss or gain. |
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What type of risk is not insurable? |
Speculative Risk |
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What are the four ways to manage risk? |
Retain, Avoided, Reduced, or Transferred. |
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In transferring a risk, what are the two options a person can do? |
1. They can purchase insurance. 2. They can sue the negligent party. |
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What does the underwriter use when determining the premium rates for insurance? |
Exposure |
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If a statement is guaranteed to be true, and if untrue, may breach an insurance contract. |
Warranty |
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When doing business in this state an insurance company that is formed under the laws of another state is known as which type of insurer? |
Foreign |
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Events or conditions that increase the chance of an insured loss occurring are referred to as... |
Hazards |
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What must an insurer obtain in order to transact insurance within a given state? |
Certificate of Authority |
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What method do insurers use to protect themselves against catastrophic losses? |
Reinsurance |
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In what way can an agent demonstrate a high standard of ethics? |
Putting the client's best interest before their own |
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When would a misrepresentation on the insurance application be considered fraud? |
If it is intentional and material. |
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The risk of loss may be classified as... |
Pure risk and speculative risk. |
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When must insurable interest exist? |
During the time of the application, and at the time of loss. |
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What type of insurer pays dividends to its stockholders? |
Stock Insurers |
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What type of insurer pays dividends to its policyholders? |
Mutual Insurers |
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What type of insurer is an unauthorized carrier? Example Lloyd's of London. |
Excess and Surplus Lines |
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What type of producer is self employed? (Owns the expiration date of the policy) |
Independent Insurance Producer |
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What type of producer represents only one company? (Does not own the expiration date of the policy) |
Exclusive or Captive Producer
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A producer is a person authorized to act on behalf of another person, who is called the? |
Principal |
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What are the three types of authority of a producer? |
Express, Implied, and Apparent |
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What four essential elements must be present in order to obtain an insurance policy/contract?
(COAL) |
Consideration Offer Acceptance of the Offer Legal Purpose and Legal Capacity |
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What is the Principle of Indemnity? |
To restore the insured back to their financial state before the loss. |