General Insurance "Code Ethics" Exam 1 Questions and Answers Rated A+ Guide

A life agent must keep the following records EXCEPT Outline of Coverage According to the CA Insurance Code, an insurance policy must specify all of the following except The financial rating of the insurer A licensee would like to surrender his license. What must he do? Submit document to the Insurance Commissioner for termination request Which of the following is a hazard? A condition that might increase the likelihood of a loss occurring Which of the following requires a reporting company to respond to a consumer's complaint that his file contains inaccurate information about him? Fair Credit Reporting Act Representation may be altered or withdrawn at what point in time? Before insurance is in effect All of the following statements are true about insurance EXCEPT It involves speculative loss All of the following are true regarding aleatory EXCEPT The insurer and the insured exchanged equal values in the insurance contract Which of the following describes a life insurance agent? A person appointed by the life insurance company to act on their behalf Neglecting to communicate that for which a party knows and ought to communicate so that the other party may make a sound decision is known as Concealment What kind of coverage protects an insurance agent for losses due to professional services he or she rendered or failed to render? Errors & Omissions An insurance contract is an aleatory contract. What does that indicate? Performance depends on an uncertain future event Under Adhesion rule all of the following are true EXCEPT The insured creates the contract and any unclear responses will be ruled against the insured When an individual purchases insurance, what is she doing? Transferring the risk When an existing agent is working with an insured to prevent possible replacement of a life insurance policy, what is this known as? Conservation An insurance company that is entitled to transact insurance in this state after complying with all required laws and regulations in this state is referred to as Admitted Company According to the CA Insurance Code, which of the following must be specified in all insurance policies? The risks insured against Insurance companies have several departments handling various responsibilities in the issuance of policies. Which department handles adverse selection? The underwriting unit A company that issues policies which do not grant the owner of the policy the right to receive policy dividends is known as what? A stock insurance company In an insurance policy, the term that allows doubt in the document to be construed against the party that worded the contract is known as what rule? Adhesion Facing a personal risk of loss and holding a lawful and substantial economic interest in the subject of insurance is the definition of what? Insurable interest Facing a personal risk of financial loss, and being restored to the same or approximate condition prior to loss in insurance is the definition of? Principle of indemnity Which of the following would be considered a morale hazard? The insured drives too fast The entity which usually issues participating policies which allow the policy owner a right to receive part of the divisible surplus of the company is known as what? A mutual insurance company If an insurer knowingly allows one of its agents to mislead another member of the public in order to induce the person to change their existing insurance, the Commissioner may... Suspend the insurer's certificate of authority for the class of business involved In an insurance policy, the term that prevents a person to re-assert their rights, after they knowingly waived those rights is known as: Estoppel In an insurance policy document, the term that allows doubt to be construed against the party that worded the contract is known as what rule? Adhesion The type of insurance owned by its policyholders can be described as a: Mutual insurer There are approximately how many classes of insurance? 20 An insurer owned by a parent company that provides insurance to cover the parent company's loss exposure is what? Captive insurer A company that issues policies that grant the owners of the policies the right to receive policy dividends is known as A mutual insurance company CA Insurance Code does not require all of the following to be specified in the policy EXCEPT Causes of loss or perils insured against In regards to representation or warranty, material translates into which of the following? Important enough to influence the decision to enter into a contract Any insurer who provides or uses illustrations must provide which of the following? "This is an illustration only. An illustration is not intended to predict actual performance. Interest rates, dividends, or values that are set forth in the illustration are not guaranteed, except for those items clearly labeled as guaranteed." 2 multiple choice options