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