Insurance Law Review PDF

Review: C9 Understand Agency and the importance of waiver and estoppels Agency is the relationship between agent for company and the policy holder Waiver is what u get If he racing car example and then the agent/ company will have to pay the estoppel Distinguish between binding authority and a...

Review: C9 Understand Agency and the importance of waiver and estoppels Agency is the relationship between agent for company and the policy holder Waiver is what u get If he racing car example and then the agent/ company will have to pay the estoppel Distinguish between binding authority and a conditional binder Binding is instant coverage as agent can approve right there Conditional is temporary coverage, contigent on underwriting approval What are the requirements of a legally enforceable contract? Offer and acceptance Consideration - determination of price to do.. Cometannt parties Legal purpose and legal form What are the distinguishing characteristics of insurance contracts? Good faith – accurate information, if material and lie can cause contract to be redacted Personal – covers person from loss not property Why are utmost-good-faith and the principal of indemnity important? Princial of indemnity is that people gain gain from a loss, What enforces the doctrine of indemnity? What provisions violate the indemnity doctrine? doctrine of indemnity is a fundamental insurance principle that aims to restore an insured to their pre-loss financial position without allowing them to profit from the loss ACV= RC - DEP C10 Distinguish between a conditional and binding receipt. Which applies to property? Life? Binding receipt is immediate coverage, conditional is temporary depending on the underwriting What are the five major parts of an insurance policy and what is important about the parts? Decloration – statement of fact Insuring agreement – something agreed in writing Exclusions- what is not covered Conditions – requirement under contract Endorsements and riders – enable modifications to be made What is the difference between an open and named perils policy? Open perils covers loss caused by all perils except … Named perils – just named perils - used in buldings usually as appreciates What must you do to modify a personal insurance contract? C11 Physical property is consists of? Real and personal property How and when is property valued? Property valued at the time of loss, valued at Actual cash value = RC- DEP What are the common forms of deductibles and which is most common in personal property insurance? a deductible is the amount a policyholder must pay out of pocket before the insurance company begins to cover the remaining costs of a claim. Straight deductable – requires payment for all value less than specific dolar amount What is a coinsurance clause and what is the replacement cost requirement in a homeowner’s policy? Requires to cover a certain amount of coverage in order to be payed In full at time of loss AMT carried / AMT required  - =1 paid in full, 1 PD partial What is the difference between admitted and nonadmitted insurance coverage? Principal financial and stat farm admitted to do buis in Iwoa loyds of londan aiint C12 What is legal liability and what are the three tests that must be shown in court? Legal liability to right someone if you wronged them Negligience If there was loss or damage Proximate cause What are the three types of compensable damages? Special or specific – Money amounts easily quantifiable General – not quantifiable like disfigurement etc Punitive – Sex offender warning What are the parties to litigation and which party has the “burden of proof”? Parties are the plaintif files a complain and has burdon of proof to show that there was negligence that was proximate cause What are torts and what is the difference between statutory/common law? Statutory law comes into effect thru litegation – eg speed limits Common law from old English law You should be familiar with the defenses against liability and how effective they are. What are the modifications to traditional negligence/legal liability and burden of proof? Burdon of proof shifted to defendant and must prove inoocence What is the responsibility of property owner to persons on the property? What is an attractive nuisance and who does the doctrine typically apply to? Something artificial that attracts children that could cause har, What are the common sources of liability arising out of the ownership of an auto? You should be knowledgeable about other sources of liability such as product and liquor liability. Product liability is responsibility for manufacuteers to sell safe products Liquor is responsibility of estabilishment from harm caused by the serving of alcohol C8 What are the various ways that insurer solvency is monitored? Solvency is whether company makes enough revenue and net income to cover all its operating expenses How does supply and demand impact insurance price and what is a hard/soft market? Hard market is limited supply often after an even which causes upward pressure on price as increased demand Soft is when theres low demand abundance of supply and capital What is the combined ratio and how is it calculated? Measure of market and operational profit Losses/ premiums + expenses/premiums = Combined ratio What are the motivations for a property liability insurer to cash flow underwrite? Underwriting is where insurers increase income by writing a large sum of policies potentially at lower price or narrower profit margins Why is the area of insurance regulated at the state level when the transaction is interstate? Paul v virgina said its intraste, then …v gov said interstate but fed gov didn’t want to manage so said states manage only if do good job Understand the purpose and importance of the NAIC. Forming model laws, consumer protection, facilitate interstate insurance, datat and collection Who manages an insolvent insurance company and how are unpaid, but owed, claims paid? Would be responsible in state ganetee fund and state insruacne commissioner. You should be able to differentiate between domestic, foreign and alien insurers. You should understand accounting compliance and the difference between GAP and SAP GAP generally accepted acoiunting principals, public traded transparent, SEC SAP, doesn’t include all of assest reduces profile, NAIC accounting systems and the impact to the insurers’ financial statements. What is the difference between prior approval and file/use rate regulation? Prior approval is different as have to wait for the claim to be approved, file/use is where you can use once claim was sent until its rejected or accepted Why are twisting and rebating unfair agent practices in most states? Twisting is where get person to change insurance to another by misleading the facts to cancel and purahce a different plan Rebating provifing substantial value to induce someone to purchase insuranc