Ch. 5: Fl. Statutes, Rules and Regulations Common to All Lines

Which of the following is an agreement between an insured and an insurer, where the insurer agrees to indemnify the insured for specific losses in exchange for a premium?

• Reciprocity

• The indemnity clause

• The insurance contract

• The insurance guaranty

The requirement that agents not commingle insurance monies with their own funds is known as

• Premium accountability.

• Express authority.

• Accepted accounting principal.

• Fiduciary responsibility.

Two individuals are in the same risk and age class; yet, they are charged different rates for their insurance policies due to an insignificant factor. What is this called?

• Adverse selection

• Discrimination

• Law of large numbers

• Misrepresentation

What method do insurers use to protect themselves against catastrophic losses?

• Indemnity

• Pro rata liability

• Risk management

• Reinsurance

Which of the following authorities grants and revokes licenses?

• Federal Insurance Bureau

• National Association of Insurance Commissioners (NAIC)

• Guaranty Association

• Department of Financial Services

An insured submits a proof of loss form within 10 days of a loss. The insurer, however, does not acknowledge the form for 3 months. Which of the following violations has the insurer committed?

• Inappropriate delay

• Dragging

• Unfair claims settlement

• Rebating

On its advertisement, a company claims that it has funds in its possession that are, in fact, not available for the payment of losses or claims. The company is guilty of

• Rebating.

• Misrepresentation.

• Concealment.

• Unfair claim practice.

Insurance contracts are agreements between which two parties?

• Producers and consumers

• Insurer and insured

• Producer and insurer

• Attorneys for any parties involved in any contract

Which of the following is an example of a producer being involved in an unfair trade practice of rebating?

• Inducing the insured to drop a policy in favor of another one when it’s not in the insured’s best interest

• Charging a client a higher premium for the same policy as another client in the same insuring class

• Making deceptive statements about a competitor

• Telling a client that his first premium will be waived if he purchased the insurance policy today

When applying for an individual life insurance policy, an applicant states that he went to the doctor for nausea, but fails to mention that he was also having severe chest pains. This is an example of

• Concealment.

• Misrepresentation.

• Fraud.

• Warranty.