1. The authority that an insurer gives to its agent by means of the agent's contract is known as
C. express authority
2. Which of the following statements about authority is NOT correct?
D) b. Express authority is determined by a principal's conduct.
3. An insurance company has how many years to challenge the validity of a life insurance contract?
4. Bob and Tom enter into a contract in which Bob agrees to fraudulently induce sick people to sell theirinsurance contracts to Tom's company. Bob and Tom's contract can best be described as
5. An insurer is considered competent if it
B) b. is licensed or authorized by the state
6. Which of the following statements describes an insurable interest?
B. The policyowner must expect to suffer a loss when the insured dies or becomes disabled
7. Which of the following terms is used for the voluntary relinquishment of a known right?
8. "An insurance contract is prepared by one party, the insurer, rather than by negotiation between thecontracting parties." Which of the following statements explains this characteristic of insurance contracts?
B. The insurance contract is a contract of adhesion.
9. With life and health contracts, when must an insurable interest exist?
A. At the inception of the policy
10. Which of the following statements describe the parol evidence rule?
B. A written contract cannot be changed by oral evidence.
11. Which of the following is a distinguishing element of an insurance contract?
12. Which of the following statements regarding the utmost good faith in insurance contracts is CORRECT?
B. Most state insurance laws consider statements made in an application for an insurance policy to be representations, not warranties.
13. Which of the following is an example of legal consideration?
B. Initial premium
14. Competent parties who can enter into insurance contracts are
D. all of the above
15. Which of the following statements regarding insurable interest is NOT correct?
C. A policy obtained by a person without an insurable interest in the insured can be enforced.