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13 Cards in this Set
- Front
- Back
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What are the most common penalties for violations of insurance statutes? |
A cease and desist order, a fine, a license suspension or revocation |
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When does an insurance policy go into effect? |
When the policy is delivered and the premium is paid |
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What is the name of the process that insurance companies use to determine whether or not an applicant is insurable? |
Underwriting |
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What are the three types of agent authority? |
Express, implied, and apparent |
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If an insurer needs to obtain information about the applicant from investigators, what is the insurer required to do? |
Provide the applicant a Disclosure Authorization Notice |
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In order to transact insurance within a given state, an alien insurer must first obtain what? |
Certificate of Authority |
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What two elements are necessary for a life insurance contract to have a legal purpose? |
Insurable interest and content |
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What type of report provides information about the applicant's hobbies, habits, and financial status? |
Inspection Report |
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What law is the foundation of the statistical prediction of loss upon which rates for insurance are calculated? |
Law of Large Numbers |
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For the purpose of insurance, what is risk? |
Uncertainty of Loss |
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What are the strategies used by underwriters to prevent adverse selection? |
Restriction of coverage, refusal to accept a risk, and accepting a risk at a higher rate |
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Insurance is used to transfer what to the insurance company? |
Financial responsibility for loss |
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When risks with higher probability of loss are seeking insurance more often than other risks, this is known as what? |
Adverse selection |
