Fundamentals of Insurance 70 Exams
Questions and Answers (2026) | Fully
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• Insurance . Answer: Manages financial risk through risk spreading.
• Indemnity . Answer: Compensation limited to actual loss amount.
• Independent brokers . Answer: Non-employee agents representing
multiple insurers.
• Risk transfer . Answer: Shifting risk to another party, often via
insurance.
• Pure risk . Answer: Only chance of financial loss, no gain.
• Consideration . Answer: Exchange of value required in contracts.
• Legal capacity . Answer: Ability to enter into a binding contract.
• Binder . Answer: Temporary insurance coverage pending policy
issuance.
• Endorsement . Answer: Written document modifying an existing
insurance policy.
• A rider . Answer: Additional coverage attached to an insurance policy.
• Loss prevention . Answer: Strategies to reduce the likelihood of loss.
• Loss reduction . Answer: Minimizing the impact of a loss when it
occurs.
, • Financial stability monitoring . Answer: Assessing insurers' financial
health by regulators.
• Regulatory functions . Answer: Government oversight of insurance
industry practices.
• Insurance Act . Answer: Legislation defining insurance terms and
conditions.
• Deliberate loss . Answer: Intentional damage not covered by insurance.
• Commission . Answer: Payment to brokers for selling insurance
policies.
• Peril . Answer: Specific risk or cause of loss covered by insurance.
• Mortgage . Answer: Loan secured by real estate property.
• Speculative risk . Answer: Risk with potential for both loss and gain.
• Employment and investment capital . Answer: Financial resources
generated by the insurance industry.
• Insurance policy . Answer: Contract outlining terms between insurer
and insured.
• Financial Solvency . Answer: Ability to pay all insured losses.
• Fiduciary Responsibility . Answer: Broker must remit collected
premiums to insurers.
• Insurance Policy Commencement . Answer: Coverage starts at 12:01
am Named Insured's address.
Questions and Answers (2026) | Fully
Solved with Verified Answers | A+
Verified
• Insurance . Answer: Manages financial risk through risk spreading.
• Indemnity . Answer: Compensation limited to actual loss amount.
• Independent brokers . Answer: Non-employee agents representing
multiple insurers.
• Risk transfer . Answer: Shifting risk to another party, often via
insurance.
• Pure risk . Answer: Only chance of financial loss, no gain.
• Consideration . Answer: Exchange of value required in contracts.
• Legal capacity . Answer: Ability to enter into a binding contract.
• Binder . Answer: Temporary insurance coverage pending policy
issuance.
• Endorsement . Answer: Written document modifying an existing
insurance policy.
• A rider . Answer: Additional coverage attached to an insurance policy.
• Loss prevention . Answer: Strategies to reduce the likelihood of loss.
• Loss reduction . Answer: Minimizing the impact of a loss when it
occurs.
, • Financial stability monitoring . Answer: Assessing insurers' financial
health by regulators.
• Regulatory functions . Answer: Government oversight of insurance
industry practices.
• Insurance Act . Answer: Legislation defining insurance terms and
conditions.
• Deliberate loss . Answer: Intentional damage not covered by insurance.
• Commission . Answer: Payment to brokers for selling insurance
policies.
• Peril . Answer: Specific risk or cause of loss covered by insurance.
• Mortgage . Answer: Loan secured by real estate property.
• Speculative risk . Answer: Risk with potential for both loss and gain.
• Employment and investment capital . Answer: Financial resources
generated by the insurance industry.
• Insurance policy . Answer: Contract outlining terms between insurer
and insured.
• Financial Solvency . Answer: Ability to pay all insured losses.
• Fiduciary Responsibility . Answer: Broker must remit collected
premiums to insurers.
• Insurance Policy Commencement . Answer: Coverage starts at 12:01
am Named Insured's address.
