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ALL QUIZZES FROM 1 TO 4
1Qz
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In regards to insurance, risk can be defined as
- Uncertainty regarding loss
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A peril is
- The actual cause of the loss.
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For an insurance contract to be enforceable, which of the following parties must be considered competent?
- Applicant
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A hazard that deals with attitudes, behavior, and habits is an example of:
- Moral hazard
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The principle used as the basis for establishing probability of losses occurring in the insurance industry is:
- Law of large number
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For an insurance contract, utmost good faith means:
- Each party relies upon the truthfulness of the other.
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Which of the following statements in regards to representations is false?
- Representations can be altered or withdrawn after issuance of the contract
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Underwriting is a process of:
— Selecting, classifying, rating and determining coverages.
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The law of large numbers is a principal that basically says:
- The larger the amount of information gathered, the more reliable that information will be.
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When large numbers of similar risks are combined in a group future claims become more
-Predictable
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A hazard is best defined as:
- Anything that increases the chance of loss or severity of loss due to a peril.
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Ideally Insurable Risk means:
- the risk is financially within reason and is reasonable to insure.
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Which of the following becomes part of the contract, is guaranteed to be true, and if untrue, may be grounds for rescinding the policy?
- Warranty
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______________ Involves the exchange of a premium for a promise, which means that the insurer is the only party making a legally enforceable
- promise to pay a claim.
- - Unilateral Contract
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What are the four major elements of a contract?
- agreement, competent parties, legal purpose, consideration
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Which of the following statements is incorrect concerning warranties?
- An implied warranty is must be included in the contract or some document signed by the insured and made part of the contract.
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An insurance contract promises to pay benefits based upon a future uncertainty such as death, or illness describes which feature of an
- Aleatory
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A condition that leads to a loss is known as a
- Hazard
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Which of the following describes the situation when one party intentionally gives false information in order to benefit from unlawful gain?
- Fraud
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When can a representation be altered or withdrawn?
- It can be altered or withdrawn before the insurance is issued.
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Insurable interest is best described as:
- The policyowner must expect to suffer a loss when the insured dies or becomes disabled.
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For insurable interest to exist:
- the insured must establish that they actually own something to be insured.
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Which of the following are the main types of risks?
- Speculative and pure
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Insurance is a contract whereby one undertakes to indemnify another against:
- Damage
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Underwriting is a process of:
- Selecting, classifying, rating and determining coverages.
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The law of large numbers is a principal that basically says:
- The larger the amount of information gathered, the more reliable that information will be.
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What is the term that describes balancing preferred risks with poor risks, and average risks in the middle?
- Profitable distribution of exposures
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What is rescission?
Rescission is the revocation of a contract.
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Which of the following is not correct concerning warranties?
- An implied warranty must be included in a document signed by the insured and made part of the contract.
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The price of insurance for each exposure is referred to as:
-Rate
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What is meant by the term adverse selection?
- The tendency of people with greater than average exposure to loss to purchase insurance.
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Risk is:
- the uncertainty or chance of a loss occurring.
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Alcoholism is an example of a:
- Moral hazard
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A relinquishment of a known right is considered to be?
- Waiver
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Regarding the materiality of representations and concealment which is true?
- It is determined by the effect of the facts on each party to the contract in determining his or her estimate of the disadvantages of the contract.
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Balancing poor risk with preferred risk, with the average or standard risk being in the middle is known as what?
- Distribution of exposures
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A representation in an insurance contract qualifies as:
- An implied warranty
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The function of insurance is best described as:
-It spreads financial risk over a large group so as to minimized the loss to any one individual
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Which of the following is NOT part of a contract that is enforced by the law?
- Tort law
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The following information does NOT need to be communicated in a contract EXCEPT:
- Information the other party deems confidential.
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Which of the following is false?
- Materiality of concealment is judged different than materiality of a misrepresentation.
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2 Qz
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If an insurer issues a policy, within how many days must it file a notice of appointment with the Commissioner?
-If the insurer issues a policy, the insurer must forward to the Commissioner a notice of appointment of the agent as the insurer's agent not more than 14 days after the agent submitted the insurance application.
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Which of the following is the best statement about selling without an appointment?
- A licensed agent may offer a proposal for insurance to a client on behalf of an insurer for which the agent is not specifically appointed.
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Which of the following is not a difference in authority between an agent and a solicitor?
- An agent can give insurance quotes, while a solicitor can only process claims.
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Life Settlement Brokers represent
- The seller in the life settlement by finding a buyer for the existing policy.
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It is against the law for an insurance licensee to offer_____________ to anyone as an incentive to acquire some other type of business
- Free insurance
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Upon termination of all appointments or cancellation of the bond required if acting as a broker your permanent license:
- - All of these
- = Does not permit the holder transact any insurance
- =Shall not be cancelled but become inactive
- =May be renewed or reactivated
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Which of the following is NOT covered under errors and omissions?
-Fraud committed by the agent
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When a person gets their life license, without a company appointment their license is considered
- Inactive
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A company has how many days to send an appointment for a new licensed agent to department of insurance?
- 14 days
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All the following are true regarding denial of a license without a hearing except:
- the applicant has been convicted of a misdemeanor
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What is the definition of a life agent?
- - Any person authorized by and on behalf of a life, disability, or life and disability insurer to transact life, disability, or life and disability
- insurance.
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All of the following are incorrect, except:
- Insurance brokers represent the client in purchasing an insurance product
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Every life and accident and health agent is required to keep all records for a minimum of years.
- 5
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All of the following are true concerning a life analyst except:
- Must be employed by a life company
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The following acts are unlawful and are misdemeanors in California except when performed by a surplus line broker, EXCEPT.
- Acting as a representative of an insurance company in soliciting and servicing policyholders in this state.
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Which of the following is the best statement about brokers selling insurance?
- It could be unethical for a broker to accept both a fee from the client and a commission from the insurer.
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Agency law does not encompass which of the following?
- Knowledge of the principal is knowledge of the agent.
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The following are valid reasons for the Commissioner to deny the use of a name EXCEPT.
-The name is not being used by anyone and does not deceive the public.
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A life agent may transact all of the following except:
- Twenty-four care coverage
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Which of the following would be incorrect regarding illustrations?
- All of these are true.
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Which of the following is not a source of information an underwriter may use to find information about an applicant?
- Department of Credit Reporting
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An employee assisting a life agent in acquiring and servicing life insurance applications and policies would need to be licensed as a:
- Life agent license
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Which of the following agents can sell individual and small group health insurance through the exchange?
- A&H age with a valid license and certified by the exchange
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All the following are entitled to a hearing concerning a license denial except:
- Convicted of a misdemeanor involving insurance
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Which of the following is NOT an exception to the free insurance prohibition?
- Insurance provided in connection with medical companies.
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Which of the following is NOT true regarding an agent and broker?
- Brokers can legally bind insurance anytime necessary to do so.
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A producer may ask about all of the following to determine if an applicant qualifies for insurance EXCEPT:
- Religious beliefs
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What is the penalty for transacting insurance without a valid insurance license?
- Jail time up to 1 year and $50,000 fine.
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Which of the following is not considered a loss under errors and omissions?
- An agent steals funds from customers.
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Any time there is a change in a licensees residence address, principal business address, mailing address, and/or email address the licensee must notify the
- Commissioner electronically
- - immediately.
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Which of the following describes someone who offers to advise any person insured under a life or disability insurance contract?
- Life and disability analyst
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Which of the following is correct concerning illustrations?
- - All preprinted illustrations shall contain a specialized notice in 12 point bold print, with space on all four sides that is made part of the
- document itself or as an attached cover sheet.
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What type of policy will protect an agent against liability for failure to use due care and skill?
- Professional liability
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Which of the following is not an action of transacting insurance?
- Receiving compensation for transacting insurance.
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An agent's appointment with an insurer will be discontinued if all of the following circumstances exist, except:
- Another insurer submits another appointment.
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During the transaction of insurance, the following must be included EXCEPT.
- The applicant's sexual preference.
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Insurers that deal directly with insureds without the use of agents through various forms of print, visual and aural media are considered to be:
- Direct response
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An A&H agent may transact all of the following except
- Coverage on human lives
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Agents represent insurers in which of the following:
- All of these
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Transacting without a license would result in which of the following penalties?
- A fine not exceeding $50,000
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3 Qz
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Which of the following statements is true’?
- A person with either a Life only or A&H only, or both a Life and A&H license must complete 24 hours of CE, which includes 3 hours of Ethics prior to license renewal.
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All the following are true concerning altering disability income polices applications except:
- never
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All the following are true concerning penalties of unfair trade practices except:
- Must be intentional
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All the following are true for continuing education requirements except
- A life agent needs 48 hours of continuing education credits for the first and second licensing periods
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An agent who wishes to sell certified Partnership LTC policies in California must complete at least how many hours of special training before marketing any partnership-approved policies?
- 16
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An MGA acts as an agent and produces and underwrites gross direct written premium equal to or more than________ % of the policyholder surplus as reported in the insurers last annual statement
- 5%
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All the following are fiduciary duties except
- Making sure your accounting is done proper in the same account, so you know what is your money and what is the company's money
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What entity has been actively involved in helping insurance remain under the jurisdiction of state government by bringing uniformity through model laws for the
- insurance industry?
- - NAIC
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A managing general agent with a life agent license and a written management agreement with one or more insurers is prohibited from doing which of the
- following?
- - None of these are excluded from the powers and authority given to the managing general agent.
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The difference between the chronic illness rider and long-term care insurance is:
- Both required the insured to incur long-term care expenses
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Which one of the following is not a principal part of the Gramm-Leach-Bliley Act?
- Do not call provisions
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When the insurer reinsurance a contract they are referred to as the:
- Both of these terms
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If someone has a Life Agent Combo and a Property/Casualty license, then how many CE hours would be required in the current license term?
- 24 hours
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Aiding, assisting, or advertising for a nonadmitted is:
- These statements are all correct
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Any person to whom the commissioner has issued a seizure order and who refuses to deliver any books, records, or assets of an insurer faces
- A misdemeanor punishable by a fine up to $1,000, a year in jail, or both.
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An A&H agent is entitled to transact insurance coverage for sickness, bodily injury, or accidental health and may include benefits for disability income and
- Complete 3 hours of CE in ethics and code which will be included in the 24 hours of CE required and pay a fee.
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A licensed producer who appoints and supervises other producers, earns a commission override on the business of those producers and has overall responsibility for producers in a given territory is considered a(n)
- Managing general agent
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An individual who handles premium payments in a trust capacity is considered to be
- Fiduciary
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A surplus lines broker is required to obtain every applicants signature on a statement that provides all of the following information Except
- The policy was denied by insurers licensed by the State of California
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All the following are true except:
- Marketing division handles selling products and the expenses of the company
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All the following statements are true except:
- Nonadmitted insurers cannot write in California
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When a company, an organization or a group of affiliated organizations form a subsidiary for the purpose of having the subsidiary provide all or part of the
- insurance for the parent company or companies, this subsidiary is known as a:
- - A captive insurer
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In order to qualify as a fraternal benefit society, an organization must have:
- All of the above
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All the following are true concerning ethics with senior citizens except:
- Must give an additional 30 days more for a free look period than people who are not senior citizens
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__________ company is an unincorporated company that consists of subscribers managed by an attorney.
- Reciprocal Insurance
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All of the following are not considered an administrator except
- Contracted by an insurance company.
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The accelerated death benefit for chronic illness rider must disclose all of the following except:
- The policy or certificate is a Medicare supplement
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All the following are true concerning conservation of a company except:
- $100,000 is the most that a guaranteed company will pay for a life claim
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All of the following are true concerning code and ethics except:
- Be truthful and inaccurate when you explain your services.
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Which is false concerning the accelerated death benefit for chronic illness rider?
- It requires an A&H license to sell
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An analyst may not receive any fee not based upon a written agreement signed by the party to be charged. This agreement must include all the following, except
- Statement of services to be performed to which no fee will be charged
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All the following are true concerning termination of license except
- licensee can give up their license with a 90 day notice
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All the following are examples of a pretext interview except:
- gathering information for underwriting
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All of the following describe an MGA EXCEPT.
- The legal entity which acts on behalf of, or in place of, it's principal.
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Conservation applies to:
- All of the above.
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The purpose of insurance regulation is to protect the public by all of the following except
- Interpreting policy provisions
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Life only agents selling annuities are required to complete an course before submitting their first application.
- 8 hour
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Which of the following would require a Certificate of Registration to act as an Administrator in connect with collection of premiums and settling claims for life,
- health, or annuity coverages?
- - None of the above.
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"Paid in capital" applies to all companies except:
- foreign mutual
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All the following are true concerning the code except:
- the code is the complete guide to ethical behavior
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A Property and Casualty Agent is required to continue their education by completing
- a total of 24 hours per license term of continuing education courses.
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Which statement is false concerning interpretation of policy provisions?
- Executive branch is headed by the insurance commissioner which enacts the laws.
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How many hours of continuing education are required per renewal for a life-only agent?
- 24 hours, 3 of the hours must be in ethics
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4Qz
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The primary purpose of key person life insurance is to protect:
- A business against the financial loss of an important executive or employee.
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All of the following are false regarding mailing requirements on Life Policy information, except:
- send to owner
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All the following are important reasons why people buy life insurance. Which is the most important reason?
- because someone needs to keep on living
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The CLHIGA provides protection for insolvency of member life and health insurers for which of the following limits?
- $300,000 per one insured life
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Which statement is true concerning definitions for the words "shall and may"?
- neither are true
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Which one of the following is a classification upon which risk and insurability are present?
- Location of the home
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Which of the following would not be a method of how much insurance is needed?
- agent needs approach
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Which of the following statement is true?
- Disclosing results of a genetic test in a manner that provides identifying characteristics is submit to a fine.
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The CLHIGA provides protection against insolvency for all of the following except:
- All are excluded from the guarantee association protection.
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All the following are true concerning conviction of insurance fraud except
- $10,000 fine is the max
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All the following beneficiaries receive the death benefits exempt from probate except
- estate
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All the following can be the insured except
- beneficiary
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Every licensee who receives an inquiry from the DOI concerning a claim must furnish a complete written response, including any documentation and claim files
- requested within
- - Within 21 calendar days
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Under the False and Fraudulent Claims Article, if a person is convicted of insurance fraud, the fine can be up to:
- $150,000
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This is an estimate of the financial loss caused by a person's death using the present value of future earnings:
- Human life value approach to life insurance
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Every insurer must pay the claim within what time period after all the parties are in agreement of the amount of the claim?
- 30 calendar days
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Limit of liability in life insurance is what?
- death benefit
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A life, health, or disability insurer can discriminate based upon:
- Age and sex of the proposed insured
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Which one is the least practical?
- avoidance
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Which of the following Is incorrect regarding any written notice required to be given or mailed to a person by an insurer relating to any insurance in this state may do so by electronic transmission
- Insurer shall keep a retrievable copy of the confirmation and/or signature while the policy is in force and for up to 3 years after.
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All the following are examples of fair discrimination except
- religion
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Which one bests describes key person insurance?
- to protect business in case of death of employee
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Concerning fraud the false statement would be
- Every insurer must maintain their own fraud unit to investigate fraudulent claims from other insurers.
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There are 3 provisions that the code protects people with group life and disability which is not one?
- subrogation
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All the following are true concerning fraud or are examples of fraud except:
- 80% of all claims reported are fraud
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Per the Code, the best definitions of “shall” and "may" are
- Mandatory & permissive
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Any insurer has how many days to accept or deny a claim?
- 40 calendar days.
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All the following are true concerning life and health guarantee association except
- $250,000 max paid for a single health policy
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An insured's consent to receive offers, notices, or disclosures by electronic transmission may be acquired
- all of the answers are correct
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Salary continuation plans:
- The business can set the plan up with a 3rd party
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Any carrier that provides replacement coverage for hospital, medical or surgical benefits within 60 days of discontinuance of a prior policy must
- Cover all employees and dependents that were validly covered under the previous policy at the time of discontinuance.
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All the following are not true concerning mortality tables except:
- deals with life insurance
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All the following are examples of unfair discrimination except
- sex
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The CLHIGA would cover which of the following?
- Life insurance contracts
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California law requires that the insurer provide falsification information to a person filing a claim by:
- Prominently printing the information on the claim form
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