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23 Cards in this Set

  • Front
  • Back
What is a statement that is guaranteed to be true, and if not true may breach a contract?

a warranty
To enter into a contract both parties must be ____ ________ ______ and ___________ _____________.
of legal age/ mentally competent
Insurers who meet the state's financial requirements and are approved to transact business in the state are considered?


If an insured could reasonably expect coverage under their policy (even if specifically excluded) the court may hold the insurer responsible; citing ______________ ________________.

reasonable expectations

A person who acts with indifference toward protecting things because they are insured is said to be what kind of hazard?

a morale hazard
If you are a part of this kind of insurance company you may receive a dividend check if all funds are not paid out to cover claims.

mutual insurer

What four things are needed in order for an insurance contract to be legally binding?



-competent parties

-legal purpose

What is a statement made by the applicant that is considered to be true to the best of the applicant's knowledge?

a representation
What is the priority of a highly ethical agent?

the needs of the client
What is concealment?

An intentional act of the insured to leave out a material fact from their application.
What must an insurer obtain in order to legally transact insurance?

A Certificate of Authority
What is an insurer called if they were formed outside the USA but transacting business in Pa?

an Alien insurer
An agent who promptly forwards premiums to the insurer is showing an example of what type of responsibility?

fiduciary responsibility
If an insurer from New York is doing business in Pa they are called a __________ insurer.

What is the most common/ effective way to transfer risk?
purchasing insurance
The person/property subject to insurance and the uncertainty of loss are examples of _________.

What is a hazard?
A specified condition or situation that increases the probability of loss or the severity of loss.
Which method of handling risk involves accepting/ assuming risk and intending to pay it out of pocket?

What is the transfer of risk from one party to another, who for a fee agrees to compensate for certain losses?


What is an insurance company that is owned by its policyholders?

a mutual insurance company
What is implied authority?
Authority given by the insurance company to the agent that is not specific of communicated but necessary for the agent to conduct business.
A stock insurance company is owned by?