General Insurance Concepts Flashcards
Misappropriation of funds
The intentional use of funds for a purpose other than that for which they were intended is:
Intimidation
Forcing someone to buy insurance by inducing fear is:
Mutual insurance company
An insurance company which is owned by policyholders is a:
Mutual insurer
An insurance company which shares dividends with policyholders is called:
The larger the group, the more accurate statistical assumptions will become.
Why is it important to have a large group of individuals insured?
They are owned by policyholders.
Which of the following is NOT correct about stock insurance companies?
Reciprocal insurers
Groups that exchange insurance on each other are called:
Adverse Selection
The tendency of poorer risks to continue and for better risks to drop or seek coverage elsewhere is called:
Reinsurers
Insurance companies that insure other insurers against catastrophic losses are called:
Require the agent to maintain separate accounts for business expanses and premium monies.
A primary purpose of Premium Fund Trust Accounts is to:
Rebating
Susan is an agent in a rural area who believes in doing business with those who do business with her. She makes a practice of buying a side of beef from farmers when they buy a policy from her. This is an example of:
Law of Agency
Which of the following explains that nay act by an insurance agent is the same as if the insurance company did the act?
Fraternal Benefit Society
An insurer that can only sell insurance to it's members or their families is a:
Indemnification
The concept of restoring individuals to the same financial position they were in before a loss occurred is called:
Foreign insurer
An insurer chartered under the laws of one of the states other than the one in which it is transacting business is a(n):
A company that offers insurance not offered by admitted insurers
Which of the following is an example of a surplus lines insurer?
Redlining
The refusal of an insurer to insure individuals in a certain part of town because of a non-actuarial belief that that part of town is bad insurance risk is:
Fraternal Benefit Society
Insurers in which membership is based on religious, ethnic, or national lines is a:
Encourage the standardization of insurance laws around the country.
The principal role of the National Association of Insurance Commissioners is to:
Frank no longer had insurable interest.
Frank sold his car to Jill but did not cancel his auto insurance policy. Jill had an accident one month later, and Frank reported the accident to his insurance company. Frank was not able to collect money for damages to the car, even though his policy was still in force because:
Express directive
An agent's ability to solicit insurance applications and accept premiums is an example of:
Pass legislation regarding insurance business in their state.
The role of the state insurance commissioners consists of all of the following EXCEPT:
Speculative
All of the following risks are insurable EXCEPT those that are: