RMI 4420 Exam One Questions With
Correct Answers
Doctrine of Stare Decisis - ANSWER Lower courts must follow precedents set by
higher courts
Equity - ANSWER Fairness, or a body of principles constituting what is fair and
right
Criminal Law - ANSWER The branch of law that imposes penalties for wrongs
against society
ex: burn house for insurance money or faking death to get life insurance
Civil Law - ANSWER A classification of law that applies to legal matters not
governed by criminal law and that protects rights and provides remedies for
breaches of duties owed to others
"preponderance of evidence"
Substantive Law - ANSWER Classification of law that creates, defines, and
regulates parties' rights, duties, and powers
Procedural Law - ANSWER Classification of law that prescribes the steps, or
processes, for enforcing the rights and duties defined by substantive law
ex: insured takes 6 years to file claim and insurance company files motion to
dismiss
Constitutional Principles Relevant to Insurance - ANSWER 1. Supremacy Clause
(U.S. Constitution is "supreme of the land")
2. Commerce Clause (gives Congress power to regulate commerce)
3. Due Process Clause (gurantees notice and hearing before federal
government)
4. Equal Protection Clause (prohibits state laws that discriminate unfarily or
arbitrarily)
National Association of Insurance Commissioners (NAIC) - ANSWER Association
of insurance commissioners from the 50 states, DC, and 5 U.S. territories and
possessions, whose purpose is to coordinate insurance regulation activities
among the various state insurance departments
Conflicts of Law - ANSWER Body of legal principles used to determine the
appropriate law to apply to a litigated case when more than one state is involved
, Torts Conflicts Rule - ANSWER Typically law of where the incident happens is
the law that is applied
Contracts Conflicts Rule - ANSWER Most states use "center of gravity rule",
applying the law of the state with the most significant relationship to the case.
HOWEVER businesses and individuals may contract around the default rule and
agree on which state's law will apply if a dispute arises under the contract
District Courts - ANSWER Trial courts of the federal system
Criminal Actions - ANSWER Have original jurisdiction over all federal crimes;
accused is entitled to trial by jury in the state in which crime is commited
Civil Actions - ANSWER District courts have jurisdiction ONLY when the matter
in controversy involves either diversity of citizenship that meets the
jurisdictional amount (more than $75,000) or involves a FEDERAL QUESTION
Original Jurisdiction - ANSWER Power of a court in which cases are initiated to
hear those cases
Diversity Jurisdiction - ANSWER Authority of federal district courts to hear
cases involving parties from different states that involve amounts in controversy
over a legal minimum and must exceed $75,000 (has to meet both of these
requirements)
Writ of Certiorari - ANSWER An appellate court's order directing a lower court to
deliver its record in a case for appellate review (request for Supreme Court to
consider case)
Defendent's Right to Removal - ANSWER Where diversity jurisdiction exists, the
defendent has a right to "remove" the case from state to federal court; the
burden would then shift to the Plantiff to "remand" the case back to the state
court
Corporations and Diversity Jurisdiction - ANSWER Corporation is considered
both "citizen" of the state where it is incorporated and the state in which it has
its principal place of business
Federal Question Jurisdiction - ANSWER No jurisdictional amount; federal
question cases involve cases arising out of the U.S. Constitution or federal laws
or tort cases involving citizens and officers/agents of the federal government
Resolution of Insurance Prior to Trial - ANSWER Done to avoid bad publicity, is
much cheaper, and Florida rules in favor of insured typically
Correct Answers
Doctrine of Stare Decisis - ANSWER Lower courts must follow precedents set by
higher courts
Equity - ANSWER Fairness, or a body of principles constituting what is fair and
right
Criminal Law - ANSWER The branch of law that imposes penalties for wrongs
against society
ex: burn house for insurance money or faking death to get life insurance
Civil Law - ANSWER A classification of law that applies to legal matters not
governed by criminal law and that protects rights and provides remedies for
breaches of duties owed to others
"preponderance of evidence"
Substantive Law - ANSWER Classification of law that creates, defines, and
regulates parties' rights, duties, and powers
Procedural Law - ANSWER Classification of law that prescribes the steps, or
processes, for enforcing the rights and duties defined by substantive law
ex: insured takes 6 years to file claim and insurance company files motion to
dismiss
Constitutional Principles Relevant to Insurance - ANSWER 1. Supremacy Clause
(U.S. Constitution is "supreme of the land")
2. Commerce Clause (gives Congress power to regulate commerce)
3. Due Process Clause (gurantees notice and hearing before federal
government)
4. Equal Protection Clause (prohibits state laws that discriminate unfarily or
arbitrarily)
National Association of Insurance Commissioners (NAIC) - ANSWER Association
of insurance commissioners from the 50 states, DC, and 5 U.S. territories and
possessions, whose purpose is to coordinate insurance regulation activities
among the various state insurance departments
Conflicts of Law - ANSWER Body of legal principles used to determine the
appropriate law to apply to a litigated case when more than one state is involved
, Torts Conflicts Rule - ANSWER Typically law of where the incident happens is
the law that is applied
Contracts Conflicts Rule - ANSWER Most states use "center of gravity rule",
applying the law of the state with the most significant relationship to the case.
HOWEVER businesses and individuals may contract around the default rule and
agree on which state's law will apply if a dispute arises under the contract
District Courts - ANSWER Trial courts of the federal system
Criminal Actions - ANSWER Have original jurisdiction over all federal crimes;
accused is entitled to trial by jury in the state in which crime is commited
Civil Actions - ANSWER District courts have jurisdiction ONLY when the matter
in controversy involves either diversity of citizenship that meets the
jurisdictional amount (more than $75,000) or involves a FEDERAL QUESTION
Original Jurisdiction - ANSWER Power of a court in which cases are initiated to
hear those cases
Diversity Jurisdiction - ANSWER Authority of federal district courts to hear
cases involving parties from different states that involve amounts in controversy
over a legal minimum and must exceed $75,000 (has to meet both of these
requirements)
Writ of Certiorari - ANSWER An appellate court's order directing a lower court to
deliver its record in a case for appellate review (request for Supreme Court to
consider case)
Defendent's Right to Removal - ANSWER Where diversity jurisdiction exists, the
defendent has a right to "remove" the case from state to federal court; the
burden would then shift to the Plantiff to "remand" the case back to the state
court
Corporations and Diversity Jurisdiction - ANSWER Corporation is considered
both "citizen" of the state where it is incorporated and the state in which it has
its principal place of business
Federal Question Jurisdiction - ANSWER No jurisdictional amount; federal
question cases involve cases arising out of the U.S. Constitution or federal laws
or tort cases involving citizens and officers/agents of the federal government
Resolution of Insurance Prior to Trial - ANSWER Done to avoid bad publicity, is
much cheaper, and Florida rules in favor of insured typically
