UPDATED Idaho Bail Bondsman Insurance License Exam Questions 100% SOLUTION

A domestic insurance companay: - ANSWER is incorporated in the state within which it is located. It is considered foreign in all other states. A captive insurance company exists primarily to: - ANSWER underwrite the risks of the parent owner. What agreement is for laying the legal framework of the insurance business? - ANSWER Insurance agent partnership agreement True or False: An 'arrest' must be accompanied by physical restraint or handcuffs - ANSWER False What process or procedure involves the determination of a person's eligibility for release from custody in exchange for the posting of a set amount of money? - ANSWER This is known as booking Is telling a partial true considered concealment? - ANSWER Yes because part of the truth was intentionally left out True or False: According to the doctrine of representations, a statement is considered as invalid even if the applicant honestly thought they were speaking the truth. - ANSWER False True or False: When forming an insurance contract, an invitation to treat or to make an offer must come from the insurer. - ANSWER False True or False: Counter offer is usually not possible in the process of negotiating an insurance contract. - ANSWER False With an aleatory contract, a party may receive: - ANSWER considerably more in value than what they have given up With a _________ contract, only one party can draw up the contract in it's entirety. - ANSWER Adhesion With a ______ contract the covenants to the contract may remain partially or completely unfulfilled. - ANSWER Executory Insurance contracts are ______, meaning the promise of a party is exchanged for a specific act of another party. - ANSWER Unilateral True or False: All insurance contracts are conditional - ANSWER True What refers to an event that can cancel a right? - ANSWER A condition precedent True or False: A breach of warranty can usually provide sufficient ground for voiding the contract - ANSWER True In the context of insurance, the major elements of a contract include: - ANSWER Offer, acceptance, consideration, competent parties and legal purpose To void a contract due to misrepresented information provided by the insured, the information involved must be _________. - ANSWER Oral or written Impersonation is _________. - ANSWER false pretenses Material misrepresentation always involves_________. - ANSWER A misstatement made during the insurance application. True or False: Policy cancellation and rescission are the same thing - ANSWER False A criminal suspect may be granted ____ release such that no bail money needs to be paid and that no bond needs to be posted. - ANSWER Own recognizance An insurance policy that does not constitute insurable interest would be considered as _______. - ANSWER Void and illegal Adverse selection is said to exist when ____. - ANSWER A risk insured is more likely than average in experiencing losses Insurance underwriting is all about _______. - ANSWER Classifying, rating and selecting risks An insurance risk class is usually based on a large group of people with _____. - ANSWER Similar characteristics True or False: It is always expected that an underwriter foresees all the possible circumstances - ANSWER False True or False: A warranty will never become an actual part of the insurance contract. - ANSWER False Insurance underwriting involves ______. - ANSWER Classifying, rating and selecting risks What describes the failure to act as a reasonable third person would in the exact same situation? - ANSWER Negligence Generally, the degree of error in the predicting the losses will decrease when ______. - ANSWER the number of the individuals is increased Who compiles statistical data about the exposure units and the relevant risks? - ANSWER Actuaries From the perspective of the insurance companies, expected losses are always based on: - ANSWER past experience of the average risk True or false: In theory, the congress can regulate those insurance transactions that are of a nature of interstate commerce - ANSWER True True or False: The Sherman act is applicable to the insurance business to the extent that it is not regulated by state law - ANSWER True True or False: The Clayton act is applicable to the insurance business to the extent that is not regulated by the state law - ANSWER True