CA LIFE AND HEALTH INSURANCE EXAM 3 LATEST
VERSIONS (VERSION A, B AND C) ACTUAL EXAM 350
QUESTIONS AND CORRECT DETAILED ANSWERS WITH
RATIONALES (VERIFIED ANSWERS) |ALREADY GRADED
A
What is meant by referring to an insurance policy as a unilateral contract? -
ANSWER: Only one party makes a legally enforceable promise.
When must insurance records of insurance agents and brokers be made available to
the Insurance Commissioner? - ANSWER: At all times.
Any situation that presents the possibility of a loss is known as - ANSWER: a loss
exposure
Which of the following information is not required to be communicated in a Life
insurance contract? - ANSWER: Personal judgment.
The direct distribution of insurance utilizes all of the following to promote the sale of
insurance EXCEPT - ANSWER: telephone call from an agent.
A contract in which one party promises to indemnify another against loss that arises
from an unknown event is - ANSWER: an insurance policy.
All of the occurrences listed below are examples of an insurable event as defined by
the California Insurance Code EXCEPT - ANSWER: an insured suffers a financial loss in
the state lottery
All of the following statements about aleatory contracts are true EXCEPT - ANSWER:
the insured and insurer contribute equally to the contract.
All of the following would be considered unfair trade practices EXCEPT - ANSWER:
committing any act of discrimination whether it be deemed fair or unfair.
As authorized by the California Insurance Code, the Insurance Commissioner has
provided standards for names used by life insurance agents. Under these standards
which, if any, of the following are automatically acceptable for Mary Brown, a holder
of the CLU designation? - ANSWER: Mary Brown Insurance Services.
A contract of indemnity is one in which - ANSWER: one party is restored to the same
financial position the party was in before the loss occurred.
In insurance terminology, "indemnity" means - ANSWER: make whole.
As defined in the California insurance Code, "insurance" is a - ANSWER: contract.
, What would a person be guilty of who refuses to deliver any books, records, or
assets to the commissioner once a seizure order has been executed? - ANSWER: A
misdemeanor
An agent who is acting as an insurance agent, broker, solicitor, life agent, accident
and health, or bail agent acts in which capacity when handling premiums or return
premiums for an insured? - ANSWER: Fiduciary
Which of the following statements regarding risk is TRUE? - ANSWER: Only pure risks
are insurable.
The purchase of an insurance policy may accomplish all of the following for the
insured EXCEPT - ANSWER: the elimination of risk.
Insureds are entitled to recover an amount NOT greater than the amount of their
loss under the principle of - ANSWER: indemnity.
What rule is used to determine the importance of a representation? - ANSWER: The
materiality of concealment.
The required contents of a policy include all of the following EXCEPT - ANSWER: the
probability of loss
All of the following are characteristics of reinsurance EXCEPT it - ANSWER: increases
the unearned premium reserve.
According to the California Insurance Code, an insurance policy must specify all of
the following EXCEPT the - ANSWER: financial rating of the insurer.
All of the following qualify as "background information" as defined in Section 1729.2
of the California Insurance Code, EXCEPT - ANSWER: misdemeanor charges filed, not
resulting in a conviction.
Loss retention is an effective risk management technique when all of the following
conditions exist EXCEPT the - ANSWER: probability of loss is unknown.
A situation in which there is a possibility of loss or a gain is a - ANSWER: speculative
risk.
Why is having a large number of similar exposure units important to insurers? -
ANSWER: The greater the number insured, the more accurately the insurer can
predict losses and set appropriate premiums.
All of the following are benefits of insurance EXCEPT it - ANSWER: eliminates
fraudulent losses.
VERSIONS (VERSION A, B AND C) ACTUAL EXAM 350
QUESTIONS AND CORRECT DETAILED ANSWERS WITH
RATIONALES (VERIFIED ANSWERS) |ALREADY GRADED
A
What is meant by referring to an insurance policy as a unilateral contract? -
ANSWER: Only one party makes a legally enforceable promise.
When must insurance records of insurance agents and brokers be made available to
the Insurance Commissioner? - ANSWER: At all times.
Any situation that presents the possibility of a loss is known as - ANSWER: a loss
exposure
Which of the following information is not required to be communicated in a Life
insurance contract? - ANSWER: Personal judgment.
The direct distribution of insurance utilizes all of the following to promote the sale of
insurance EXCEPT - ANSWER: telephone call from an agent.
A contract in which one party promises to indemnify another against loss that arises
from an unknown event is - ANSWER: an insurance policy.
All of the occurrences listed below are examples of an insurable event as defined by
the California Insurance Code EXCEPT - ANSWER: an insured suffers a financial loss in
the state lottery
All of the following statements about aleatory contracts are true EXCEPT - ANSWER:
the insured and insurer contribute equally to the contract.
All of the following would be considered unfair trade practices EXCEPT - ANSWER:
committing any act of discrimination whether it be deemed fair or unfair.
As authorized by the California Insurance Code, the Insurance Commissioner has
provided standards for names used by life insurance agents. Under these standards
which, if any, of the following are automatically acceptable for Mary Brown, a holder
of the CLU designation? - ANSWER: Mary Brown Insurance Services.
A contract of indemnity is one in which - ANSWER: one party is restored to the same
financial position the party was in before the loss occurred.
In insurance terminology, "indemnity" means - ANSWER: make whole.
As defined in the California insurance Code, "insurance" is a - ANSWER: contract.
, What would a person be guilty of who refuses to deliver any books, records, or
assets to the commissioner once a seizure order has been executed? - ANSWER: A
misdemeanor
An agent who is acting as an insurance agent, broker, solicitor, life agent, accident
and health, or bail agent acts in which capacity when handling premiums or return
premiums for an insured? - ANSWER: Fiduciary
Which of the following statements regarding risk is TRUE? - ANSWER: Only pure risks
are insurable.
The purchase of an insurance policy may accomplish all of the following for the
insured EXCEPT - ANSWER: the elimination of risk.
Insureds are entitled to recover an amount NOT greater than the amount of their
loss under the principle of - ANSWER: indemnity.
What rule is used to determine the importance of a representation? - ANSWER: The
materiality of concealment.
The required contents of a policy include all of the following EXCEPT - ANSWER: the
probability of loss
All of the following are characteristics of reinsurance EXCEPT it - ANSWER: increases
the unearned premium reserve.
According to the California Insurance Code, an insurance policy must specify all of
the following EXCEPT the - ANSWER: financial rating of the insurer.
All of the following qualify as "background information" as defined in Section 1729.2
of the California Insurance Code, EXCEPT - ANSWER: misdemeanor charges filed, not
resulting in a conviction.
Loss retention is an effective risk management technique when all of the following
conditions exist EXCEPT the - ANSWER: probability of loss is unknown.
A situation in which there is a possibility of loss or a gain is a - ANSWER: speculative
risk.
Why is having a large number of similar exposure units important to insurers? -
ANSWER: The greater the number insured, the more accurately the insurer can
predict losses and set appropriate premiums.
All of the following are benefits of insurance EXCEPT it - ANSWER: eliminates
fraudulent losses.
