AD BANKER AL P&C CH 1 GENERAL INSURANCE EXAM
2025-2026 \NEWEST VERSION \COMPLETE
QUESTIONS AND ACCURATE DETAILED ANSWERS
\GRADED A+ \BRAND NEW !!!
In a particular state, an D.
insurance company must file Prior approval states require that the state review the
policy forms and rates with rates and give the insurer prior approval before they
the state insurance may begin using the rates. File and use states may
department and wait for begin using the rates immediately upon filing them with
official approval before the state. Some states have mandatory rates that must
using the new forms and be used for certain lines of insurance and competition
rates. This is an example of rate states rely on insurance companies to compete
a/an: for rates considered to be fair and adequate.
A. Mandatory rates state
B. File and use state
C. Open competition state
D. Prior approval state
A peril is: C.
A peril is a cause of a loss. Example: Fire, Lightning,
A. Also called a hazard Wind, Hail, etc. Risk is the chance of a loss. Intentional
B. An intentional loss loss is not a peril and a hazard increases the chance
C. The cause of a loss
of a loss occurring.
D. The chance of a loss
All of the following are D.
Elements of Insurable The Elements that determine if a risk is an Insurable
Risk, except: are: Accidental, Measureable, Calculable, Hardship
(must cause financial hardship), Exclude Catastrophic
A. Loss is accidental Perils, Affordable (cost of insurance) and
B. Loss is calculable Predictable.
C. Loss is predictable
D. Loss in indeterminable
,A company established in D.
England doing business in An insurance company operating in any country other
Alabama would be than the one where its home office is located would be
considered by Alabama considered to be an 'Alien' company in that country.
residents to be a(n):
A. Domestic company
B. Foreign company
C. All of the answers listed
D. Alien company
Which of the following B.
principles states The Doctrine of Utmost Good Faith is where both parties bargain
that in forming an insurance in good faith
contract, both parties have a making full, fair and honest disclosure. The applicant is
responsibility to the other? honest on the application and the insurer is providing
full, fair disclosure of the policy terms.
A. Doctrine of Indemnity
B. Doctrine of Utmost Good
Faith
C. Doctrine of Reasonable
Expectations
D. Doctrine of Ambiguities
The principle that states that D.
an insured should be The principle of indemnity is to restore the insured to the
restored to approximately same financial condition as before the loss occurred,
the same financial position not to profit, not to gain. Adhesion is a take it or
after a loss as before is leave it
known as: contract, without negotiation, reinsurance is risk
sharing, and insurable interest specifies that the insured
A. Adhesion must be facing the possibility of economic loss in the
B. Insurable
interest event of property damage.
C. Reinsurance
D. Indemnity
, What is the purpose of the A.
Fair Credit Reporting Act? If the insured is denied coverage on the basis of a credit
report, the Fair Credit Reporting Act states that the
A. To give the consumer insured must be notified and allowed to obtain the
recourse if the information in the file. If the information is incorrect, the
insurance is denied on the
agency must correct it.
basis of a credit report
B. To protect the insurance
company's right to privacy,
not allowing an insured
any access to information
that the insurer has
complied regarding the
insured
C. To permit the insurer to
report any past due
premiums to the credit
bureaus
D. To allow the insurance
company to share any
information gathered on
the insured with the credit
bureaus
Insurance is a means of: A.
Insurance is Risk Transfer. It protects against uncertainty,
A. Transferring risk shares the loss, and reduces anxiety. The principle of
B. Retaining risk insurance is the substitution of a small certain expense
C. Eliminating risk (premium) for a large uncertain loss (claim payment). It
D. Self insuring
does not eliminate risk. It is not used to retain risk,
which is the same as being self insured.
A mutual insurance company D.
is owned by its: A Mutual company is mutually owned by the
policyholders. Policyholders participate in the
A. Stockholders company's profits in the form of dividends and each
B. Members policyholder has voting rights. Stock companies are
C. Subscribers owned by stock holders, fraternal benefit societies are
D. Policyholders member owned, and reciprocal companies are owned
by subscribers. In essence,
2025-2026 \NEWEST VERSION \COMPLETE
QUESTIONS AND ACCURATE DETAILED ANSWERS
\GRADED A+ \BRAND NEW !!!
In a particular state, an D.
insurance company must file Prior approval states require that the state review the
policy forms and rates with rates and give the insurer prior approval before they
the state insurance may begin using the rates. File and use states may
department and wait for begin using the rates immediately upon filing them with
official approval before the state. Some states have mandatory rates that must
using the new forms and be used for certain lines of insurance and competition
rates. This is an example of rate states rely on insurance companies to compete
a/an: for rates considered to be fair and adequate.
A. Mandatory rates state
B. File and use state
C. Open competition state
D. Prior approval state
A peril is: C.
A peril is a cause of a loss. Example: Fire, Lightning,
A. Also called a hazard Wind, Hail, etc. Risk is the chance of a loss. Intentional
B. An intentional loss loss is not a peril and a hazard increases the chance
C. The cause of a loss
of a loss occurring.
D. The chance of a loss
All of the following are D.
Elements of Insurable The Elements that determine if a risk is an Insurable
Risk, except: are: Accidental, Measureable, Calculable, Hardship
(must cause financial hardship), Exclude Catastrophic
A. Loss is accidental Perils, Affordable (cost of insurance) and
B. Loss is calculable Predictable.
C. Loss is predictable
D. Loss in indeterminable
,A company established in D.
England doing business in An insurance company operating in any country other
Alabama would be than the one where its home office is located would be
considered by Alabama considered to be an 'Alien' company in that country.
residents to be a(n):
A. Domestic company
B. Foreign company
C. All of the answers listed
D. Alien company
Which of the following B.
principles states The Doctrine of Utmost Good Faith is where both parties bargain
that in forming an insurance in good faith
contract, both parties have a making full, fair and honest disclosure. The applicant is
responsibility to the other? honest on the application and the insurer is providing
full, fair disclosure of the policy terms.
A. Doctrine of Indemnity
B. Doctrine of Utmost Good
Faith
C. Doctrine of Reasonable
Expectations
D. Doctrine of Ambiguities
The principle that states that D.
an insured should be The principle of indemnity is to restore the insured to the
restored to approximately same financial condition as before the loss occurred,
the same financial position not to profit, not to gain. Adhesion is a take it or
after a loss as before is leave it
known as: contract, without negotiation, reinsurance is risk
sharing, and insurable interest specifies that the insured
A. Adhesion must be facing the possibility of economic loss in the
B. Insurable
interest event of property damage.
C. Reinsurance
D. Indemnity
, What is the purpose of the A.
Fair Credit Reporting Act? If the insured is denied coverage on the basis of a credit
report, the Fair Credit Reporting Act states that the
A. To give the consumer insured must be notified and allowed to obtain the
recourse if the information in the file. If the information is incorrect, the
insurance is denied on the
agency must correct it.
basis of a credit report
B. To protect the insurance
company's right to privacy,
not allowing an insured
any access to information
that the insurer has
complied regarding the
insured
C. To permit the insurer to
report any past due
premiums to the credit
bureaus
D. To allow the insurance
company to share any
information gathered on
the insured with the credit
bureaus
Insurance is a means of: A.
Insurance is Risk Transfer. It protects against uncertainty,
A. Transferring risk shares the loss, and reduces anxiety. The principle of
B. Retaining risk insurance is the substitution of a small certain expense
C. Eliminating risk (premium) for a large uncertain loss (claim payment). It
D. Self insuring
does not eliminate risk. It is not used to retain risk,
which is the same as being self insured.
A mutual insurance company D.
is owned by its: A Mutual company is mutually owned by the
policyholders. Policyholders participate in the
A. Stockholders company's profits in the form of dividends and each
B. Members policyholder has voting rights. Stock companies are
C. Subscribers owned by stock holders, fraternal benefit societies are
D. Policyholders member owned, and reciprocal companies are owned
by subscribers. In essence,
