MPJE PHARMACY LAW EXAM: FEDERAL LAW
QUESTIONS & CORRECT ANSWERS
Calculates rates and creates policy forms such as homeowners and auto for
property and casualty insurers. - ANSWER-Insurance Services Office
governing org. for all state insurance commissioners, directors. Works towards
standardization of insurance codes in various states. All legislation passed is non-
binding on the states until passed by the state legislative. - ANSWER-National
Association of Insurance Commissioners (NAIC)
organized under the laws of the same state in which they are domiciled. -
ANSWER-Domestic Insurers
Formed under the laws of a different state from the one in which they are doing
business. - ANSWER-Foreign Insurers
Formed under the laws of another country from the one in which they are doing
business in. - ANSWER-Alien Insurers
Contract type that promises to pay an amount equal to the loss covered under the
policy. - ANSWER-Indemnity Contract
Is a contract type which reimburses expenses. - ANSWER-Reimbursement
Contract
, A contract type in which the insurer agrees to pay a specific sum of money no
matter what the amount of loss may be. Ex. Life Insurance - ANSWER-Valued
Contract
Selection of such a risk has a greater than average chance of producing a loss. -
ANSWER-Adverse Selection
Legal impediment to one party denying the consequences of its own actions. -
ANSWER-Estoppel
Insurance company must return any advanced unused premium paid by the policy
owner if the insurance company terminates the contract before policy ends. -
ANSWER-Pro-Rata
Uncertainty of a financial loss - ANSWER-Risk
Uncertain prospect of a financial gain or loss and are uninsurable. Ex. Lottery -
ANSWER-Speculative Risk
Involving a chance of loss or no loss, but no gain, and are insurable. - ANSWER-
Pure Risk
Ensures that an individual or business does not get involved in an activity leading
to a potential financial loss. - ANSWER-Risk Avoidance
Is a method in which the individual or business assumes the expected losses from
its own financial resources. - ANSWER-Risk Assumption
Transfer of risk to an insurance company. - ANSWER-Risk Transference
QUESTIONS & CORRECT ANSWERS
Calculates rates and creates policy forms such as homeowners and auto for
property and casualty insurers. - ANSWER-Insurance Services Office
governing org. for all state insurance commissioners, directors. Works towards
standardization of insurance codes in various states. All legislation passed is non-
binding on the states until passed by the state legislative. - ANSWER-National
Association of Insurance Commissioners (NAIC)
organized under the laws of the same state in which they are domiciled. -
ANSWER-Domestic Insurers
Formed under the laws of a different state from the one in which they are doing
business. - ANSWER-Foreign Insurers
Formed under the laws of another country from the one in which they are doing
business in. - ANSWER-Alien Insurers
Contract type that promises to pay an amount equal to the loss covered under the
policy. - ANSWER-Indemnity Contract
Is a contract type which reimburses expenses. - ANSWER-Reimbursement
Contract
, A contract type in which the insurer agrees to pay a specific sum of money no
matter what the amount of loss may be. Ex. Life Insurance - ANSWER-Valued
Contract
Selection of such a risk has a greater than average chance of producing a loss. -
ANSWER-Adverse Selection
Legal impediment to one party denying the consequences of its own actions. -
ANSWER-Estoppel
Insurance company must return any advanced unused premium paid by the policy
owner if the insurance company terminates the contract before policy ends. -
ANSWER-Pro-Rata
Uncertainty of a financial loss - ANSWER-Risk
Uncertain prospect of a financial gain or loss and are uninsurable. Ex. Lottery -
ANSWER-Speculative Risk
Involving a chance of loss or no loss, but no gain, and are insurable. - ANSWER-
Pure Risk
Ensures that an individual or business does not get involved in an activity leading
to a potential financial loss. - ANSWER-Risk Avoidance
Is a method in which the individual or business assumes the expected losses from
its own financial resources. - ANSWER-Risk Assumption
Transfer of risk to an insurance company. - ANSWER-Risk Transference
