Bubba Brooks Final Examination

4 years

Risk is the uncertainty of loss. Loss is a reduction in quality, quantity, or value. Peril is the cause of loss. Hazard is anything that increases the chance of loss due to a peril.

<p>Physical, Moral, Morale, and Legal hazards.</p> Signup and view all the answers

<p>The Law of Large Numbers states that as the number of exposures increases, the predictability of losses also increases. A Homogeneous Exposure Unit is a group of individuals or objects with similar risks.</p> Signup and view all the answers

<p>The tornado</p> Signup and view all the answers

<p>Life insurance is based upon policy Effective Dates. P&amp;C is time of Loss.</p> Signup and view all the answers

<p>Fiduciary means trust and confidence, especially in the handling of money. Utmost Good Faith means that when entering a contract, both parties will act honestly and disclose all material facts.</p> Signup and view all the answers

<p>Sharing Losses and transferring risk.</p> Signup and view all the answers

<p>Indemnity is the promise to pay proceeds; Indemnify is the act of paying; Indemnification is making whole without a gain, essentially the same as Indemnity.</p> Signup and view all the answers

<p>Controlled Business refers to insurance policies purchased by family members, co-workers, and employees. The percentage of controlled business in an insurer's book of business cannot exceed 25%. This rule helps to prevent insurers from being too reliant on a small group of individuals for their revenue.</p> Signup and view all the answers

<p>The Georgia FAIR Plan provides insurance to individuals who have been denied coverage through traditional insurance markets due to high risk.</p> Signup and view all the answers

<p>These elements include Agreement (also called Offer and Acceptance), Consideration (an exchange of value), Conditions (terms and restrictions), and Legal Purpose (ensuring the contract serves a valid purpose).</p> Signup and view all the answers

<p>Aleatory</p> Signup and view all the answers

<p>Unilateral</p> Signup and view all the answers

<p>A representation is a statement believed to be true, a warranty is a guarantee that is true. Misrepresentation is a false statement delivered with the intention to deceive. It is not always a lie, but it always involves a false statement, which is important in underwriting.</p> Signup and view all the answers

<p>The insured (policyholder). This is known as the Adhesion contract.</p> Signup and view all the answers

<p>A material fact is information that the insurer needs to know to underwrite the policy properly. Concealment is the failure to disclose known material facts.</p> Signup and view all the answers

<p>During the agreement stage, when the insurer rejects the original offer but makes a counter offer.</p> Signup and view all the answers

<p>Waiver is a relinquishment of a known right. Oral evidence is not admissible in court if a contract is clear, unambiguous, and complete. Parol evidence similarly cannot be used to contradict a written contract. Estoppel prevents a party from denying a claim based on their prior actions. The entire contract rule states that the policy document itself, along with any attached application, represents the complete and final agreement between the parties.</p> Signup and view all the answers

<p>The Guaranty Association is a safety net that protects policyholders when an insurer becomes insolvent (unable to pay claims). It also specifies how compensation should be paid when an insured files a claim.</p> Signup and view all the answers

<p>The penalties include a Cease and Desist order, a fine of $1,000 for unknown violations, $5,000 for known violations, and probation for one year.</p> Signup and view all the answers

<p>The additional penalties include a fine of up to $10,000 and suspension or revocation of the license.</p> Signup and view all the answers

<p>Any Felony</p> Signup and view all the answers

<p>A revoked license means that the license is permanently canceled, and the individual cannot write insurance for the specified period (typically 5 years). A suspended license means that the individual cannot write insurance for a shorter period (typically 3 months to a year). Probation means that the license is still active, but the individual is monitored closely by the regulator and may face further penalties if they violate the rules.</p> Signup and view all the answers

<p>An insurance license needs to be renewed every two years, typically on the month of the licensee's birth. The license will display the licensee's name, address, type of license, expiration date, and any other conditions attached to the license.</p> Signup and view all the answers

<p>Most P&amp;C agents can bind coverage, but not all agents. This ability is typically limited to a period of 90 days.</p> Signup and view all the answers

<p>The main purpose of rate regulation is to ensure that insurance rates are fair and reasonable. This means that they are neither excessive (too high) nor inadequate (too low), and they must be applied in a non-discriminatory manner.</p> Signup and view all the answers

<p>The first procedure the Commissioner will take is to issue a Cease and Desist order.</p> Signup and view all the answers

<p>The requirements to be able to get a premium reduction for defensive driving include completing a defensive driving school program, being on the honor roll or dean's list, being single, and being under the age of 25.</p> Signup and view all the answers

<p>A resident license is issued to someone who resides in the state for more than 6 months and has made the state their home of record. A nonresident license is issued to someone who does not consider the state their primary residence but conducts business there.</p> Signup and view all the answers

<p>Reciprocal licenses recognize the validity of licenses issued in other states. This means that states agree to treat each other's licenses as valid, allowing individuals to operate in multiple jurisdictions despite holding a license from a specific state.</p> Signup and view all the answers

<p>Insurer's Capacity refers to the maximum amount of insurance that a particular insurer is legally authorized to write in a given state.</p> Signup and view all the answers

<p>A physical hazard.</p> Signup and view all the answers

<p>The fines for violating the Fair Credit Reporting Act (FCRA) vary depending on the nature of the violation. For example, a violation that involves providing false information to a consumer reporting agency (CRA) could result in a fine of up to $7,000, while a violation that involves knowingly reporting false information about a consumer could result in a fine of up to $10,000. The penalty for a violation that involves disclosing a consumer's credit information without their consent could be a fine of up to $50,000. Finally, a violation that involves a knowing violation of the FCRA for the purpose of obtaining a job or credit could be a fine of up to $50,000. Individuals found guilty of such violations could also face up to 2 years in federal prison.</p> Signup and view all the answers

<p>Consumers have the right to be notified within three days of any request for an investigative consumer report and they must be provided with the report within 5 days of the request or when first requested.</p> Signup and view all the answers

<p>The bank providing the mortgage loan.</p> Signup and view all the answers

<p>A Special Multi-Peril Policy (SMP) is a type of insurance that provides coverage for various perils, often called a Commercial Package Policy.</p> Signup and view all the answers

<p>Any property policy that provides coverage for more than one peril is a Multi-Peril Policy.</p> Signup and view all the answers

<p>A licensed resident insurance agent signs the counter signature, confirming their involvement and approval of the policy.</p> Signup and view all the answers

<p>The theft loss of credit cards is covered up to $500 with a zero deductible under a Homeowners or Farm Property policy.</p> Signup and view all the answers

<p>The standard procedure is for the employee to be terminated.</p> Signup and view all the answers

<p>Individuals can qualify for an insurance license by fulfilling the following criteria: being a resident of the state for at least six months, and being at least 18 years of age.</p> Signup and view all the answers

<p>Individuals seeking a temporary license can obtain one for a period of 6 months and it can be renewed three times, extending coverage to a maximum of 15 months. Individuals relocating from another state can apply for a temporary license and receive one for 90 days.</p> Signup and view all the answers

<p>Individuals seeking to become self-insured must demonstrate that they have enough financial resources to cover potential claims and must be capable of complying with the law of large numbers.</p> Signup and view all the answers

<p>Surplus lines brokers specialize in placing insurance coverage for risks that traditional insurance markets are unwilling to insure, often for higher values or specialized scenarios. Typical examples include flood insurance exceeding the limits of the National Flood Insurance Program (NFIP). Surplus lines brokers often use a network of non-admitted insurers, operating outside of traditional insurance regulations.</p> Signup and view all the answers

<p>The insured has 60 days to make corrections to their records after receiving a notice from the state.</p> Signup and view all the answers

<p>The state will pay the expenses if an insured is examined by the Insurance Department after an allegation but is not at fault.</p> Signup and view all the answers

<p>The person can appeal the proposed report within 30 days.</p> Signup and view all the answers

<p>Yes, a Commissioner's order can be appealed in the superior court of Fulton County. The person who filed the initial case or any interested party (known as an intervenor) can appeal the decision.</p> Signup and view all the answers

<p>The three major landmark court cases are <em>Paul v. Virginia</em>, <em>Southeastern Underwriters Association (S.E.U.A.)</em>, and <em>McCarran-Ferguson Act</em>. These court cases impacted the legal landscape of the insurance industry by defining the scope of state versus federal authority in regulating the insurance business.</p> Signup and view all the answers

<p>These prohibited combinations of insurance include <em>Lloyd's of London</em>, <em>Title Insurers</em>, and <em>Reciprocals</em>.</p> Signup and view all the answers

<p>Limited subagents are typically required to hold a license and complete a 20-hour training course. The exam requirement is typically waived.</p> Signup and view all the answers

<p>Agents generally have Errors &amp; Omissions (E&amp;O) coverage to protect themselves from liability for honest mistakes or errors made in providing insurance advice or services.</p> Signup and view all the answers

<p>The Directors &amp; Officers (D&amp;O) liability insurance policy provides coverage for directors and officers of a company to protect them from lawsuits that might arise from their decisions made while acting in their role within the company.</p> Signup and view all the answers

<p>True</p> Signup and view all the answers

<p>Assessment Issuers use an open end contract which allows them to adjust the premium charged for the policy, typically to make up for any shortfalls in revenue or to account for increased claims costs.</p> Signup and view all the answers

<p>An Attorney-in-Fact manages a reciprocal insurance exchange. They are responsible for overseeing the day-to-day operations of the reciprocal, including claims handling, underwriting, and financial management.</p> Signup and view all the answers

<p>Reciprocal</p> Signup and view all the answers

<p>This acronym is a mnemonic device for remembering various types of coverage commonly offered under commercial general liability (CGL) policies. The letters represent: A - Automobile, B - Boiler and Machinery, C - Crime, P - Property, I - Inland Marine, G - General Liability, F - Farm coverages.</p> Signup and view all the answers

<p>These concepts are related to insurance contracts. A transfer of rights refers to transferring ownership of the policy or the policy benefits to a third party. This typically involves a change in ownership or beneficiary designation. A transfer of rights of recovery involves transferring the right to pursue legal action or collect compensation from a third party, which is often seen in subrogation. The insurer may choose to sue the at-fault party who caused the initial loss, even though they paid out to their insured.</p> Signup and view all the answers

<p>The four components of a Commercial Package Policy (CPP) are Declarations, Conditions, Coverages, and Endorsements.</p> Signup and view all the answers

<p>The two major sub-lines for Commercial General Liability (CGL) policies are Premises/Operations and Products/Completed Operations. A CGL policy can provide coverage for losses that arise out of these various operations.</p> Signup and view all the answers

<p>The Retroactive Date rule in a CGL policy specifies that a claim may be advanced for an insured who wasn't covered under the policy before, but only with their written consent. This rule is designed to prevent retroactive coverage that is not intended. The policyholder must also make the request officially, and the changes are typically tied to a clear reason, such as a change in carriers, change in coverage for the insured's business, or a failure to disclose material facts. The policyholder must also ensure the current insurer is informed about any critical changes in the insured's operations.</p> Signup and view all the answers

<p>False</p> Signup and view all the answers

<p>Mini Tail coverage provides limited coverage for claims reported within 60 days after the policy's expiration date; Midi Tail coverage provides extended coverage for claims reported within 5 years of the policy's expiration date; Full Tail coverage provides unlimited coverage for any claims reported after the policy expires, regardless of when the incident occurred. It's important to note that these coverage options can be applied to both Claims Made and Occurrence forms of coverage. The choice depends on the specific needs of the policyholder and the type of insurance being purchased.</p> Signup and view all the answers

<p>Coverage provided under a Commercial General Liability (CGL) policy typically extends to all territories within the United States.</p> Signup and view all the answers

<p>False</p> Signup and view all the answers

<p>In a CGL (Commercial General Liability) policy, &quot;Other Insured&quot; is typically used to describe individuals or entities, such as spouses, directors, or stockholders who are not named insureds but are covered by the policy under certain conditions. This can be beneficial for business owners who wish to expand coverage to additional parties beyond the direct named insured.</p> Signup and view all the answers