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50 Cards in this Set
- Front
- Back
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The concept of spreading the financial loss which was created by one person's death among a large number of people, thus minimizing the cost for each individual in the group refers to:
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The principle of life insurance
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Regarding an insurer's domicile, an alien insurer insurer is one organized under the laws of:
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Any jurisdiction other than a state of the United States.
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A person purchases a life insurance policy on his own life. In this case the law does not require that the beneficiary have an insurable interest.
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True
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Which of the following is the most correct when considering a reinsurance contract.
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It is used to allow an insurance company to write insurance in excess of its retention limits.
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Of the following, all do not allow a policyowner's entitlement to declared divisible surplus of the insurer by means of "participating policy" except:
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A mutual company
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Which of the descriptions below would best describe "insurable interest" in reference to life insurance.
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Having a financial interest in the insured's life to continue
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Which of the following is not an example of what an insurance policy can provide an insured.
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Eliminate the risk of sickness
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Select from the choices below the best description of a speculative risk.
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Involving the possibility of a gain in addition to the uncertainty of loss
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The best description of a hazzard is a/an.
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condition that may increase the chance that a loss may occur
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Intentionally submitting false information on a life application is an example of a moral hazzard. T/F
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TRUE
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The owner of an office building recognizes the hazzards of the building because of its age. He decides to finally get insurance to protect him from a possible legal suit. This would be an example of avoidance of risk. T/F
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False
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Choose from the following descriptions the best description of a premium.
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The amount the insured pays for each unit of coverage. $7.oo for each unit of coverage is an example.
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Which of these is the best way to define the concept of indemnity
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an insured cannot receive more than an actual economic loss in the event of a claim.
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The principle of indemnification is best described below as
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restoring an individual to a condition they enjoyed in the past, thus making them whole.
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When is insurable interest required to exist with a life insurance policy
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at the time the policy is written but not at the time of death.
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all of the following statements regarding policy dividends are true except
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non-participating policies generally pay large dividends
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Sam's insurance policy pays a dividend. The agent that sold Sam the policy calls the company "participating", therefore it is a/an -------- insurer
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mutual
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which of the following would be considered an alien insurer
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a company located in England and doing business in California
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Julie is a licensed insurance salesperson who represents the Silver Dollar Insurance Company. If you were to look at the front of her office you would see a sign that reads: SILVER DOLLAR INSURANCE COMPANY, Julie Insurance Agancy
If Julie performs acts that are not specifically named in the written contract she has with Silver Dollar she is exercising her ------- authority |
implied
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Agents must act on behalf of their clients in such a way that uphold their "fiduciary duty". Select the best example of this duty from the choices below
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quickly sending an insureds premium to the home office
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The Fair Credit Reporting Act mandates that a credit reporting company responds to a consumer complaint when that company's credit report inaccurately reflects information about the consumer. T/F
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true
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In the process of applying for insurance an applicant is asked questions that do not relate to underwriting but are clearly meant for attaining marketing information. Under the code this practice is allowable assuming the person applying for coverage is informed of such practice. T/F
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true
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The term "consideration" applies to the issuance of an insurance policy. Choose the best description of this term from the choices below.
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none of the above, (something of value given from one party in exchange for something else of value from the other party)
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The doctrine of "utmost good faith" applies to the business of transacting insurance. Which of the following is an example of its application.
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each party is entitled to rely upon the representations of the other party
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Fraud is an intentional act to deceive and induce another party to part with something of value. Which of the following would describe fraud in the process of applying for insurance.
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intentionaly distorting the truth to get an insurance policy
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Choose the correct answer. The California Insurance Code:
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is basically the body of laws governing insurance business in this state
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The Commissioner has numerous responsibilities and wide-ranging authority concerning the California Insurance Code. Should he deem it necessary, he can rewrite certain sections of the code to better serve the insuring public. T/F
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False
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Which of the following is required to be included in the writing of an insurance contract
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all of the above, (the parties between whom the contract is made, the risk insured against, the period in which the insurance is to continue.)
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Neglecting to communicate that which a party knows, and ought to communicate, so that the other party may make a sound decision is known as
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concealment
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From the following, identify that which applies to an applicant's misstatement on an application for insurance.
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both, (should the misstatement be made with express intent to mislead the insurer it is considered fraud, Should the misstatement not be material to the company's decision it may not affect the application)
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All of the following statements are correct regarding a "warranty" except
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It is a statement merely made to the best of one's knowledge, and can only be express.
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Which of the following is correct about the term "transact" as it applies to the field of insurance and the various penalties for insurance transactions in violation of the code
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all of the above (solicitation is a part of transacting insurance, Negotiations preliminary to the executation of a policy falls within the definition of transacting insurance, Shouls a person transact insurance without a valid liscence he/she is guilty of a misdemeanor
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According to the code, "transact" as it applies to insurance does not include negotiations preliminary to the execution of a contract of insurance. T/F
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Fasle
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The California Code sites a specific definition for a "life agent." A life agent is
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all are false, (an insurance agent authorized by and on behalf of an admitted life and/or disability insurer to transact LIFE and/or DISABILITY INSURANCE as well as FIXED ANNUITIES)
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In the California Insurance Code there is a definition that reads, in short,"...a person who, for a fee, offers to advise any insured having any interest in life or disability insurance contracts..." This is the definition of
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a life and disability analyst
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Of the items listed below, which are requirements for a life and disability insurance analyst licence
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all of the above (The applicant must have a good general reputation and good business reputation, The applicant must be 18 years of age, minimum, The applicant must have a thorough knowledge of life and disability insurances.)
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To protect (subject to statutory limitations) life and health owners and insureds in the event of impairment or insolvency of a member insurer. This is a description of
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The California Life and Health Insurance Guarantee Association
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An agent mostly sells long-term care insurance to individuals. He obtained his insurance liscence (life and health) in January of 1998. In 1998 he must
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complete 25 hours of life and health continuing education, 8 of which are LTC specific
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The license of an agent is considered inactive when
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all renewal fees are paid but there is a termination of all appointments
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Ben is a life agent who would like to do business with the Rock Solid Insurance Company but he doesn't have an appointment to sell their policies. Assuming Rock Solis does not require exclusive representation, can Ben submit an application to them for a prospect
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Yes, and if the insurer approves the application they must appoint Ben within 14 days
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How is the life agent's licence renewed
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pay the renewal billing notice the Department sends out about 60 days before the renewal date
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Chuck Harris has earned a Chartered Life Underwriter designation. From the selections below choose the one that the California Code would find acceptable when publishing his name
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Harris Insurance Services
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Every licensee must indicate on which of the following documents his or her licence number
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all of the above (print advertisements, business cards, written price quotations)
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When any change in residence address occurs, every licensee and every applicant for a license must notify the Commissioner -------. (select the most correct response)
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immediately
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An agent makes a misleading comparison of a policy he is selling in order to convince a prospect to lapse an old insurance policy. What is this called
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twisting
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An agent makes a misleading comparison of a policy he is selling in order to convince a prospect to lapse an old insurance policy. What is this called
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twisting
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An agent makes a misleading comparison of a policy he is selling in order to convince a prospect to lapse an old insurance policy. What is this called
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twisting
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An agent makes a misleading comparison of a policy he is selling in order to convince a prospect to lapse an old insurance policy. What is this called
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twisting
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An agent makes a misleading comparison of a policy he is selling in order to convince a prospect to lapse an old insurance policy. What is this called
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twisting
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An agent makes a misleading comparison of a policy he is selling in order to convince a prospect to lapse an old insurance policy. What is this called
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twisting
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