Crash Course Q's

The McCarran Ferguson Act

Gave the states the right to regulate at the state level

Which of the following terms is mandatory

Shall

The commissioner of insurance may serve:

2 consecutive terms (8 yrs)

Any person capable of making a contract of insurance subject to the restrictions of insurance code is:

An insurer

Which of the following describes a broker

A person who is not appointed by any insurer, but may receive compensation for any policy he/she places through the insurer and may charge client a fee

Which described an exclusive agent

An agent who transacts for one insurer or a group of related insurers

An insurance agent with a Life license can transact

Any but health or p&c

Which describes an agent

One who is appointed by any number of insurers, receives commissions from them

An agent's relationship with a direct writer is describes as

Employee to employer

According to the California Insurance Code an insurance agent is defined as

Agent selling any line of insurance other than life insurance

An agent who only sells for only one company as opposed to an agent who represents several companies is considered as

Captive agent

A person who offers to advise for a fee, any insured having interest in life or disability insurance contract is a

Life and disability analyst

Which of the following describes an express authority

Authority of an agent that is specifically granted by the insurer

When an agent is authorized to do business on behalf of the insurer, it is considered as

Express authority

Implied authority is

Authority given to an agent other than in the agents contract

A stock insurance contract is

An insurance company with a stated amount of capital stock owned by the stockholders who compose the company and direct it by many means of officers and directors

Which of the following is owned by its policy holders and was formed for their benefit

Mutual insurer

Which of the following best describes a mutual insurance company

An corporation owned by individuals who contribute capital through the purchase of policies

Which of these is a correct statement about an admitted insurer

Any insurer approved to transact insurance in California is an admitted one, without regard to location

The purpose of CLHIGA is

To protect life and health policy holders and/or insureds when member insurers become insolvent

Which is not covered by CLHIGA

Employer self fund plan

What classes of insurance are exempt from the CIGA

Life an Annuity

Which of the following describes an insurance who has enough financial resources only to provide for all its liabilities and reinsurance of its outstanding risks?

Insolvent

An insurer must have money in reserves to cover its liabilities and reinsure its outstanding risks. In addition a company should have:

Assets equivalent to paid in capital

According to the Insurance code, the penalty for failure to comply with a Notice of Seizure order is

$1,000 fine and/or imprisonment for up to one year

The Insurance code defines domestic insurer as an insurer organized under the laws of

The state of california, whether or not admitted

An insurer organized under the laws of any state outside CA is

Foreign insurer

An insurer organized in Great Britain is an

Alien insurer

Which could be an admitted insurer

Domestic, foreign, or alien

The retention limit is

The maximum risk a company would will accept on a policy

When an insurance company works with another insurer because it has exceeded its retention limit on a risk, this would be an example of

Reinsurance

If someone were transporting animals from Africa where might he obtain insurance

Surplus line broker

A person who acts in a capacity that requires an active license without having a valid license is guilty of a

Misdemeanor

An applicant for an insurance license had another professional license revoked. What would the commissioner do?

Deny the application without a hearing

Record to an agent or broker must be available to the commissioner

At all times

How long must an agent maintain records for transactions in CA

5yrs

A representation can be considered as an

Implied warranty

Any transaction that involves a purchasing of life insurance policy and terminating an existing policy is

Replacing

The purpose of replacement rules regarding life insurance is

To protect the interests of life insurance purchases by establishing standards of conduct to be observed in replacement transactions

When an agent accepts premium from the insured and uses the money for personal gain

Theft

A risk management technique that eliminates a loss exposure and reduces the chance of loss to zero is

Avoidance

Loss retention is a risk management technique when all of the following conditions exist except

The probability of loss is unknown

The MIB reporte contain

Disabilities and health conditions discovered during examination affecting insurability

What is the process called whereby insurers decide which customers to insure and what coverage to offer

Underwriting

A policy is cancelled. The policy is exactly halfway through its term. The insurer keeps 50% of the premium and returns the other 50% to the insured. Cancellation is a

Pro-Rata Cancellation