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87 Cards in this Set

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in order to be insured an induvidual has to have a resource that he may lose if an even occurs. What term describes this concept?
insurable interest
What is the legal concept in which an individual is responsible for the harm that occurred because the individual failed to perform the actions that a reasonable person in a similar situation would take to ensure the safety of other individuals
negligence
A legal concept in which an indivudal must COMPENSATE an individual for the harm that he or she caused
liability
a legal concept in which an individual is responsible for the harm that occurred because the individual was performing an extremely hazardous activity, which caused harm even though the individual took all of the necessary precautions
absolute liability
a legal concept in which an individual is responsible for the harm that occurred due to the actions of another individual because the individual is responsible for the SUPERVISION OR CARE of the individual who caused the harm
vicarious liability
The declarations section of an insurance policy that identifies the specific resources and/or perils that the policy covers
insuring agreement
the declarations section of an insurance policy that identifies the specific resources/perils that the policy does not cover
exclusions
The declarations section of an insurance policy that identifies what key items
-who is covered
-name of insurer
-amount of coverage
-phone # & address
-cost of premium
-specific property covered
an individual who is covered by an insurance policy that he or she does now own but is listed on the policy
additional insured
an individual or organization that is covered by the policy because the individual or organization owns the policy
named insured
individual or organization that is covered by the policy because the individual or organization is considered to be the PRIMARY owner
first named insured
covered by the policy because the individual or organization owns the policy but the individual or organization is not considered to be the primary owner
an additional named insured
a provision that allows an insurer to acquire the rights to a piece of damaged property in exchange for a payment equal to the amount necessary to replace the property
salvage provision
a provision that prohibits the policyholder from transferring the policy to another individual or organization during his lifetime unless the insurer has agreed to the transfer in writing
assignment provision
provision that allows an insured individual or organization to collect the benefits of the policy even if the individual or or organization decides to abandon the property
abandonment provision
a provision allows an insurer to seek the amount that it paid for a claim from the individual who caused the harm if the insurer is required to pay a claim related to an incident for which the insured individual(s) are not responsible
subrogation provision
The Dwelling policy Broad form (DP-1) will only cover damage to a dwelling that occurs as a result of
a fire, internal explosion, and/or lightning
The Dwelling policy Broad form (DP-2) will only cover damage to a dwelling that occurs as a result of (COVERS THE MOST!!)
-accidental dischararge or overflow of liquids
-an aircraft; burglary; civil commotion; an explision; falling objects; a fire; freezing pipes; hail; lightning; smoke; sudden and accidental damage from electrical current; cracking; a sprinkler system; vandalism
Dwelling policy Broad form with extended coverage will cover
an aircraft, civil commotion, an explosion, hail, smoke, vehicles, and/or wind
The Dwelling policy Broad form (DP-3) will only cover damage to a dwelling that occurs as a result of
any even that is not specifically excluded in the policy
A type of dwelling coverage in which an insurer agrees to pay an amount equal to the income that a landlord would lose if the landlord's rental property is damaged and a tenant is no longer able to occupy the property
Fair Rental Value
A type of dwelling coverage in which an insurer agrees to pay an amount equal to the value of an individual's personal property if the individual's property is stolen
Broad Theft Coverage
A type of dwelling coverage in which an insurer agrees to pay an amount equal to the amount that an individual would need to pay to LIVE in another location if the individual's property is damaged
Coverage E - Additional Living Expense
A type of dwelling coverage in which an insurer agrees to pay some of the MEDICAL expenses for an individual other than the insured if an individual is injured on the insured individual's property
Coverage M - Medical Payments to others
an exclusion that states that an insurer will not pay any claim in which an individual's property is damaged as a result of A LAW OR ORDINANCE THAT COMPELS AN INDIVIDUAL TO MODIFY OR REMOVE THE STRUCTURES
Building Law exclusion
an exclusion that states that an insurer will not pay any claim in which an individual's property is damaged or seized by the government
Governmental Action exclusion
an exclusion that states that an insurer will not pay any claim in which an individual's property is damaged as a result of an earthquake, mudslide. landslide, sinkhole
An Earth Movement exclusion
an exclusion that states that an insurer will not pay any claim in which an individual's property is damaged as a result of the fact that the individual did not maintain the property
A Neglect exclusion
Which Home Owners form covers damage to a condo owner's PROPERTY that occurs as the result of any event that is not specifically excluded in the policy
HO-6 Unit Owner's form
Which Home Owner's form covers damage to a tenant's PROPERTY that occurs as the result of an aircraft, civil commotion, an explosion, fire, hail, lightning, smoke, theft, vandalism, vehicles, and/or wind
HO-4 Contents Broad form
Which Home Owner's form covers damage to the DWELLING that occurs as the result of any event that is not specifically excluded in the policy and damage to the PROPERTY inside the dwelling that occurs as the result of an aircraft, civil commotion, an explosion, fire, hail, lightning, smoke, theft, vandalism, vehicles, and/or wind
HO-3 Special form
Which Home Owners form covers damage to the DWELLING and PROPERTY inside the dwelling that occurs as the result of any event that is not specifically excluded in the policy
HO-5 Comprehensive form
What means conducting business in accordance with current rules and laws set by government regulatory agencies and the courts
compliance
standards of conduct and moral judgement
ethics
legal term that describes the relationship between two parties
agency
what is the term to describe how an insurer appoints an individual to act on its behalf
agency contract
an individdual whose position and responsibilities involve a high degree of trust and confidence (trustees, guardians & executors)
fiduciary
the name for the fact that a producer must sell the kind of policies that best fit the prospect's needs and in amounts that the prospect can afford
needs selling
what is given when the applicant pays the initial premium at the time the application for a policy is signed
conditional receipt
what is the term for informing the prospect or client of all facts involving a specific policy or plan so that an informed decision can be made
full disclosure
what is the name for the watchdog group whose member companies agree to adhere to and enforce ethical principles
Insurance marketplace Standards Association (IMSA)
what act deals with the inappropriate use of advertising
Unfair Trade Practices Act
any written or oral statement that does not accurately describe a policy's features, benefits, or coverage
misrepresentation
any false, maliciously critical, or derogatory communication that injures another's reputation, fame or character
defamation
what is the term if the buyer of an insurance policy receives any part of the producer's commission or anything else of significant value as an inducement to purchase a policy
rebating
the unethical act of persuading a policyowner to drop a policy solely for the purpose of selling another policy without regard to possible disadvantages to the policy owner
twisting
a resident producer license must meet what two requirements
may either reside in PA or have their principal place of business in this state
in what two situations is it not required to be licensed as a manager or exclusive general agent
-a licensee who has limited underwriting authority
-a manager or agent who started before Dec 22, 1965
Which of the following can not be issued a temporary license:
-surviving spouse of a decesed producer in order to sell the business
-a deceased producer's personal representative until new personnel is trained to run the business
-a person holding a power of attorney for a producer in the armed forces
-a person selling insurance for the estate of a deceased producer
a person selling insurance for the estate of a deceased producer
which of the following is not a reason for a license to be suspended or revoked
-making a factual but subjective comparison of two policies
-intentionally violating a cease and desist order
-making false statement in a license application
-violating an insurance regulation
making a factual but subjective comparison of two policies
increases the chance of loss
hazard (leaving the door unlocked)
the chance of loss
risk
a means of transferring the risk of loss
insurance
the cause of loss
peril (types of peril - fire; flood; collision; theft)
states that there must be an adequate spread of risk for insurance to be effective
law of large numbers - more examples used, more reliable the statistic (predict the number of losses; predict the charge for premium)
installing an automatic sprinkler system is an example of what
reduction (can not avoid risk but can reduce risk)
deciding not to produce a product due to serious potential side effects
avoidance (avoid the risk of being sued)
person in good health cancels health insurance policy - what risk management method
retention (retaining risk)
under what regulation in PA does it state that insurers must maintain specified minimum levels of capital stock and surplus
Regulation of insurer solvency
Who regulates insurance rates to avoid excessive, inadequate, or unfairly discriminatory rates
Casualty and Surety Rate Regulatory Act
who must an insurer notify when they terminate a producer's appointment
the Commissioner and the producer
which of the following is not a power and duty of the Insurance Commissioner
-issuing cease and desist orders
-prosecuting producers who violate state insurance laws
-conducting complaint hearings
-appointing examiners
what unfiar practices is when a producer offers, promises, allows, gives, sets off or pays a rebate on the contract of insurance
rebating
what unfair insurance practice is the purchase of insurance from a financial institution or from a designated insurer or producer as a condition of any loan or deposit transaction
Tie-in sales
what unfair insurance practive occurs when a producer makes, issues, circulates, or uses any written or oral statement misrepresenting the terms of a policy or contract of insurance
misrepresentation
what unair insurance policy occurs when a producer misrepresents or provides an icomplete comparison of policies to induce the policyholder to lapse, forfeit or surrender his insurance to take out a similar policy in another company
twisting
nonpublic personal financial information about individuals
Privacy of Consumer Financial Information
what is the term for an instruction by the consumer to the licensee not to disclose nonpublic personal financial informationabout that consumer to a nonaffiliated third party
Opt out
When can a producer share a commission with an unlicensed person
-if licensee was held at time of sale
-referring person can receive a one time nominal set fee
when a personal fire insurance policy is cancelled because the insured's acts increase the hazard insured against, how many days' notice must be provided to the insured
30 days
When an automobile policy is cancelled for a reason other than non payment of premium, how many days' notice must be provided to the insured
60
If an insured's driver's license has been suspended, the insurer may cancel the automobile insurance policy by giving how many days' notice?
15
what are the minimum limits of liability any individual must provide for bodily injury and property damage?
15/30/5
$15000 per person bodily injury
$30000 per accident for body injury
$5000 per accident property damage
purchased in the normal or standard market
Pennsylvania Fair Plan Act
After an accident, what is the waiting period before the insured can apply for income loss benefits
5 work days
what must occur in order for funeral expenses to be paid
death within 24 hours of accident
When an automobile policy is cancelled for a reason other than non payment of premium, how many days' notice must be provided to the insured
60
If an insured's driver's license has been suspended, the insurer may cancel the automobile insurance policy by giving how many days' notice?
15
what are the minimum limits of liability any individual must provide for bodily injury and property damage?
15/30/5
$15000 per person bodily injury
$30000 per accident for body injury
$500 per accident property damage
What act is intended to provide property owners with fire, extended coverages, vandalism and malicious mischief coverage when insurance is unable to be purchased in the normal or standard market
Pennsylvania Fair Trade Ace
After an accident, what is the waiting period before the insured can apply for income loss benefits
5 work days
an insurer must notify an insured at least how many days before increasing the premium on a commercial casualty insurance policy?
30
Which agency provides motor vehicle insurance to those applicants who would otherwise by uninsurable?
Pennsylvania Auto Assigned Risk Plan
When an employer must provide workers' compensation insurance but is unable to do so through normal channels, which organization can provide the required coverage?
State Workers Insurance fund
What term describes a producer who converts premiums for his own use
Breach of fiduciary duty
What insurance option lets the insured seek recovery for all medical and other out-of-pocket damages, pain and suffering, and other nonmonetary damages as a result of injuries caused by other drivers
Full Tort option
With Crop insurance, at what percent can crops be insured of their expected value?
75%