Podcast
Questions and Answers
In insurance transactions, fiduciary responsibility means?
An insurance producer who by contract is bound to write insurance for only one company is classified as a/an?
What is the definition of a unilateral contract?
What term best describes the act of withholding material information that would be crucial to an underwriting decision?
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What documentation grants express authority to an agent?
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Peril is most easily defined as?
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Which of the following is NOT a characteristic of an insurable risk?
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Because an agent is using stationery with the logo of an insurance company, applicants for insurance assume that the agent is authorized to transact on behalf of that insurer. What type of agent authority does this describe?
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Which of the following best describes rescission?
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Which of the following produces evaluations of insurers' financial status often used by the state departments of insurance?
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The reduction, decrease, or disappearance of value of the person or property insured in a policy by a peril insured against is known as?
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Which of the following insurance options would be considered a risk-sharing arrangement?
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Study Notes
Fiduciary Responsibility in Insurance
- Fiduciary responsibility involves handling insurer funds in a trust capacity, ensuring integrity in financial management.
Types of Insurance Producers
- A captive agent is bound by contract to write insurance for only one company, distinguishing them from independent producers and brokers.
Unilateral Contracts
- A unilateral contract is one-sided, where only one party, typically the insurer, makes an enforceable promise, contrasting with bilateral contracts.
Concealment in Insurance
- Concealment refers to the act of withholding material information that is crucial for underwriting decisions, impacting the integrity of the insurance process.
Agent Authority
- Authority granted to an agent comes explicitly through the agent's contract with the principal, which defines the scope of the agent's power.
Definition of Peril
- Peril is defined as the cause of loss insured against within an insurance policy, identifying risks covered by the policy.
Insurable Risk Characteristics
- Insurable risks are characterized by being due to chance, definite, measurable, and predictable; they should not be catastrophic.
Apparent Authority of Agents
- Apparent authority exists when an agent appears to have authority based on their actions or the principal’s representations, influencing client perceptions.
Rescission in Insurance
- Rescission occurs when an insurer cancels a policy after issuance and refunds all premiums paid, reflecting a significant change in circumstances or underwriting conditions.
Evaluating Insurers' Financial Status
- AM Best is the primary agency that assigns financial ratings to insurance companies, aiding in assessing their stability and reliability for consumers and regulators.
Definition and Types of Loss
- Loss refers to the reduction, decrease, or disappearance of insured property’s value due to a covered peril, highlighting its significance in insurance claims.
Risk-Sharing Arrangements
- A reciprocal insurance arrangement is a risk-sharing model where members exchange risks among each other, differing from stock or mutual insurance types.
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Description
Test your knowledge with flashcards covering key concepts from Chapter 1 of the Life and Health ExamFX. This quiz includes critical terms and definitions related to insurance transactions and fiduciary responsibilities. Perfect for students preparing for their insurance licensing exam.
