This quiz focuses on property and casualty insurance, exploring pure risks, the law of large numbers, insurable interests, and risk management methods. It assesses understanding of insurance principles and decision-making in risk scenarios, valuable for professionals in finance and insurance sectors.
Prohibits insurance with extremely high premiums.
States that there must be a narrow spread of risk for insurance to be effective.
States that the more examples used to develop a statistic, the more reliable the statistic will be.
Requires all members of society with insurance exposures to purchase insurance.
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LaTonya
John
LaTonya's son, who would like to inherit the home some day
First City Bank
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Avoidance
Reduction
Retention
Transfer
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Transfer
Retention
Avoidance
Reduction
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Retention
Control
Avoidance
Transfer
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Physical
Moral
Morale
Obvious
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Fire
Lightning
Wet pavement
Flood
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Consideration
Offer and acceptance
Competent parties
Signatures of the parties involved
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Both parties are required to provide services for the other.
One party draws up the contract provisions, and the other party adheres to the terms.
The contract can be revoked by any party at any time for any reason.
A contract that is formed without any consideration by either party.
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After a loss, an insured should be restored to approximately the same condition that existed before the loss.
Every insured will receive full compensation for all losses in all cases.
When property is damaged or destroyed, the insurance company must pay the full replacement cost.
In the case of bodily injuries, liability coverage must be available without regard to any policy exclusions.
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Definitions
Exclusions
Insuring agreement
Conditions
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Stated benefits and the dates on which they are to be paid
The premium
A promise to pay for certain losses if they occur
A promise to be conscientious about the customer's situation
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Unilateral
Aleatory
Conditional
Utmost good faith
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Definitions
Exclusions
Insuring agreement
Conditions
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Is managed by an attorney-in-fact.
Pays dividends to its stockholders.
Is owned by its insureds.
Is a voluntary association of individuals that shares in writing insurance contracts for a variety of risks.
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Represents a single insurance company.
Works for a direct writer.
Is an independent businessperson.
Does not collect commissions.
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Issue or countersign policies.
Sell insurance.
Collect premiums.
Sign an application.
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Captive
Independent
Direct writer
Direct response
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Underwriting
Loss Control
Claims
Agency
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Audit
Claims
Underwriting
Reinsurance
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Lloyd's Associations
State insurance department
Interstate Commerce Commission
Insurance Services Office
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Rebating.
Twisting.
Misrepresentation.
Failure of fiduciary responsibility.
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Fraternal insurance.
Self-insurance.
Reinsurance.
Government insurance.
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The insurance industry is regulated exclusively by the federal government.
The insurance industry is very loosely regulated.
The state insurance department is responsible for controlling insurance matters within the state.
The state insurance department serves only the interests of the insurance industry.
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Making appropriate coverage recommendations to prospective customers
Writing the provisions of a customer's policy
Helping prospective customers complete the application
Assuring that customers understand the coverage they are purchasing
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Express authority.
Implied authority.
Assertive authority.
Apparent authority.
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Alien
Foreign
Domestic
Non-admitted
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No, that would be a violation of the principle of open competition.
No, they can only require that forms and rates be subject to prior approval.
No, insurers can always begin using forms and rates as soon as they are properly filed with the state.
Yes, some states have mandatory forms or rates for certain coverages.
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They guarantee that a policy will be issued.
They can be issued by insurance companies, but not agents.
They expire on the effective date of the policy to which they apply, or on the expiration date of the binder if the policy is not issued.
They show an intent to consider issuing insurance, but do not include any commitment to provide coverage.
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An evaluation of the characteristics of the individual risk
Manual rates developed from statistical data
Calculation and evaluation of the insured's past loss experience
Loss information reported by other states
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Judgment
Merit
Certification
Manual
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Concern material facts.
Be intentional.
Both A and B are correct.
Neither A nor B are correct.
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Misrepresentation
Warranty
Estoppel
Certificate of insurance
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Flat basis
Pro rata basis
Short rate basis
Negotiated basis
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Prenotification is required for both regular and investigative reports.
Postnotification is required when insurance coverage is denied because of adverse information in a credit report.
An agent who obtains information from a reporting agency under false pretenses can be sent to jail and fined.
Consumers have the right to challenge information in investigative reports and to have incorrect information removed.
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Flat cancellation
Nonrenewal
Pro rata cancellation
Unearned renewal
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Walt only
Joanna only
Both Walt and Joanna
First State Bank
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Liberalization
Subrogation
Abandonment
Salvage
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Assignment
No benefit to bailee
Coinsurance
Other insurance
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Appraisal
Arbitration
Duties after loss
Subrogation
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$26,640
$40,000
$13.280
$60,000
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Catastrophic losses
Nonaccidental losses
Losses to personal property
Extra-hazardous perils
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The cause of a direct loss
A type of loss that results from a direct loss
An insignificant property loss
Not a type of property loss
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$125,000
$100,000
$80,000
$75,000
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The mortgagee might have to pay the premium if the insured doesn't.
The mortgagee can file a proof of loss when the insured fails to do so to protect its rights under the policy.
The mortgagee might have coverage under the policy even if something the insured does causes a claim to be denied.
The mortgagee has no insurable interest in the covered property.
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Concurrent causation
Fraud
Concurrent coverage
Double indemnity
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$400
$3,000
$17,000
$20,000
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Attorney-in-fact
Judge
Super-appraiser
Umpire
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