Brooks Exam QUESTIONS AND ANSWERS
The commissioner is elected/appointed for how long?
Elected/4 years
Define Risk, Loss, Peril, & Hazard
Risk - Uncertainty of Loss
Loss - Reduction in quality, quantity, or value
Hazard - Anything that increases the chance of loss due to a peril
Peril- any event that may damage something
Name the Assigned Risk Pools
Workers Compensation - NCCI National Council of Compensation Insurance
Homeowners - Ga FAIR Act Fair access to insurance requirements
Automobile - Georgia AIP
What are the 4 Hazards
Physical, Moral, Morale, Legal
Define the Law of Large Numbers & a Homogeneous Exposure Unit
Large Numbers predictability increases/Larger numbers are more accurate to predict
When is insurance measured in Life and Health vs. P & C?
Life insurance is based on the policy Effective Date
P & C is measured at time of loss
Explain the difference between Fiduciary and Utmost Good Faith
Fiduciary - Trust and Confidence... Handling Money
Utmost Good Faith - when you enter into a contract you will act UGF and be honest
Insurance is defined as:
Sharing Losses and transferring risk
Explain Indemnify, Indemnity and Indemnification.
Indemnity-The promise to pay proceeds
Indemnify- The act of paying
Indemnification- To make whole without a gain. Same as Indemnity.
,Define Controlled Business. What percentage?
Controlled business like family, co workers and employees buying insurance can
not be equal to 25% or more. Ex's and Friends are not Controlled Business.
What is the purpose of the Georgia FAIR Plan?
To give people insurance that cant get it and are high risk
Explain the Essential Elements of an Insurance Contract.
Agreement, Consideration, Conditions, Legal Purpose
What is the contract named that is one of chance?
Aleatory
What is the contract named that is an act for a promise?
Unilateral
Representation vs. Warranty vs. Misrepresentation.
Representation statements believed to be true
Warranty guaranteed to be true
Misrepresentation always a false statement but not always a lie
Any ambiguity between an insured and an insurer, in court, would usually favor
which part? What is the contract called? (aka) Unclear Contract Provisions.
Insured
Adhesion
What is the difference between material facts and concealment?
Material fact is things Under writer needs to know
Concealment-Failure to disclose known material Fact
When would counter offer and invitation to make an offer occur?
During the agreement stage when the insurer rejects the original offer but makes a
counter offer.
Explain the difference between a license being revoked, suspended and put on
probation?
Revoke cancel for 5 years and cannot do anything
Suspended can't write insurance from 3months to a year
Probation can still write insurance but is being watched and has been fined.
When does a license have to be renewed? What is shown on a license?
, 2 years on your birth month
Name, Address, Type of License, Expiration, other conditions,
Who can bind coverage?
Most P&C agent but not all agents. Up to 90 Days
What is the purpose of rate regulation?
to be certain rates are not excessive, inadequate or unfairly discriminatory.
If the Commissioner believes you are guilty of an Unfair trade practice, what is
the first procedure he takes?
Cease and desists
Name the requirements to be able to get a premium reduction for defensive
driving?
Defensive driving school, Honor roll or deans list, Single, UNDER AGE 25.
What's the difference between a resident and a nonresident license?
Residence lives in state and live here more than 6 months
Nonresident writes in other states that's not home of record
What's a reciprocal liscense?
States treat each other the same
Define "Insurer's Capacity".
The Most the state allows to be written by one insurer
What kind of hazard is it when Hot Wires are exposed and hanging from a
ceiling?
Physical
Who is a mortgagee, a mortgagor, an oblige and obligor?
Mortgagee is bank, Mortgagor is person, Oblige person who receives the bond money if
the Principal defaults, Obligor is Company and/or Principal.
What's a multi peril policy?
Any property policy that write more than one peril insured against
HO and Farm Property: How much for Theft loss of credit cards?
$500 with zero deductible.
Who qualifies for a license?
Resident for 6 months, age 18.
The commissioner is elected/appointed for how long?
Elected/4 years
Define Risk, Loss, Peril, & Hazard
Risk - Uncertainty of Loss
Loss - Reduction in quality, quantity, or value
Hazard - Anything that increases the chance of loss due to a peril
Peril- any event that may damage something
Name the Assigned Risk Pools
Workers Compensation - NCCI National Council of Compensation Insurance
Homeowners - Ga FAIR Act Fair access to insurance requirements
Automobile - Georgia AIP
What are the 4 Hazards
Physical, Moral, Morale, Legal
Define the Law of Large Numbers & a Homogeneous Exposure Unit
Large Numbers predictability increases/Larger numbers are more accurate to predict
When is insurance measured in Life and Health vs. P & C?
Life insurance is based on the policy Effective Date
P & C is measured at time of loss
Explain the difference between Fiduciary and Utmost Good Faith
Fiduciary - Trust and Confidence... Handling Money
Utmost Good Faith - when you enter into a contract you will act UGF and be honest
Insurance is defined as:
Sharing Losses and transferring risk
Explain Indemnify, Indemnity and Indemnification.
Indemnity-The promise to pay proceeds
Indemnify- The act of paying
Indemnification- To make whole without a gain. Same as Indemnity.
,Define Controlled Business. What percentage?
Controlled business like family, co workers and employees buying insurance can
not be equal to 25% or more. Ex's and Friends are not Controlled Business.
What is the purpose of the Georgia FAIR Plan?
To give people insurance that cant get it and are high risk
Explain the Essential Elements of an Insurance Contract.
Agreement, Consideration, Conditions, Legal Purpose
What is the contract named that is one of chance?
Aleatory
What is the contract named that is an act for a promise?
Unilateral
Representation vs. Warranty vs. Misrepresentation.
Representation statements believed to be true
Warranty guaranteed to be true
Misrepresentation always a false statement but not always a lie
Any ambiguity between an insured and an insurer, in court, would usually favor
which part? What is the contract called? (aka) Unclear Contract Provisions.
Insured
Adhesion
What is the difference between material facts and concealment?
Material fact is things Under writer needs to know
Concealment-Failure to disclose known material Fact
When would counter offer and invitation to make an offer occur?
During the agreement stage when the insurer rejects the original offer but makes a
counter offer.
Explain the difference between a license being revoked, suspended and put on
probation?
Revoke cancel for 5 years and cannot do anything
Suspended can't write insurance from 3months to a year
Probation can still write insurance but is being watched and has been fined.
When does a license have to be renewed? What is shown on a license?
, 2 years on your birth month
Name, Address, Type of License, Expiration, other conditions,
Who can bind coverage?
Most P&C agent but not all agents. Up to 90 Days
What is the purpose of rate regulation?
to be certain rates are not excessive, inadequate or unfairly discriminatory.
If the Commissioner believes you are guilty of an Unfair trade practice, what is
the first procedure he takes?
Cease and desists
Name the requirements to be able to get a premium reduction for defensive
driving?
Defensive driving school, Honor roll or deans list, Single, UNDER AGE 25.
What's the difference between a resident and a nonresident license?
Residence lives in state and live here more than 6 months
Nonresident writes in other states that's not home of record
What's a reciprocal liscense?
States treat each other the same
Define "Insurer's Capacity".
The Most the state allows to be written by one insurer
What kind of hazard is it when Hot Wires are exposed and hanging from a
ceiling?
Physical
Who is a mortgagee, a mortgagor, an oblige and obligor?
Mortgagee is bank, Mortgagor is person, Oblige person who receives the bond money if
the Principal defaults, Obligor is Company and/or Principal.
What's a multi peril policy?
Any property policy that write more than one peril insured against
HO and Farm Property: How much for Theft loss of credit cards?
$500 with zero deductible.
Who qualifies for a license?
Resident for 6 months, age 18.
