AD Ch 1

An agent has authority to do all of the following, except:

• Appoint a solicitor as his or her representative

• Solicit applications on insurer’s behalf

• Representing the insured’s interest

• Countersign insurance contracts

Under the California Financial Information Privacy Act, all of the following are ways of reasons a financial institution is permitted to share consumer’s personal financial information, except

• With law enforcement in the course of an investigation and subject to orders of the court

• To increase company revenue with more targeted marketing campaigns the consumer is likely to want or need

• Sharing customer data between affiliates in a single line of business under the same regulators

• To comply with provisions of the USA PATRIOT Act

Insurance is an example of which type of risk management technique?

• Reduction of risk

• Retention of risk

• Element of risk

• Transfer of risk

A loss exposure is best defined as:

• A reduction in, decrease in, or disappearance of, value

• The possibility of a loss

• The loss itself

• Something that increases the chance of a loss

Which if the following statements is true concerning the National Association of Insurance Commissioners?

• Regulations and laws are determined at its meetings

• The NAIC was responsible for passage of the McCarran Act

• They regulate the insurance industry in the United States and have enforcement powers

• Each commissioner may accept or not accept the recommendations that concern his or her state

Gambling is considered which of the following types of risk?

• Insurable

• Pure

• Speculative

• Stable

An insurer that is authorized to transact insurance in California and has been issued a Certificate of Authority from the California Department of Insurance is a(n):

• Alien insurer

• Domestic insurer

• Admitted insurer

• Foreign insurer

All of the following are requisites of an ideally insurable risk, except

• The loss must cause economic hardship

• The loss must be definite in terms of cause, time, place, and amount

• Catastrophic perils are typically excluded

• The loss must be unpredictable

A(n) ___________ agent enters into agreements with more than one insurer.

• Exclusive

• Direct

• Captive

• Independent

All of the following statements regarding materiality are correct, except:

• Disclosure or lack of disclosure would change the insurer’s decision to issue a policy

• It is determined by the facts that a party failed to communicate or miscommunicated

• It is judged by the importance of relevance to the contract

• It is determined by the event