Policy Provision and Contract Law '25

The part of a policy that clarifies terms in the policy is the:

• Definitions

• Exclusions

• Insuring agreement

• Conditions

Representations are written or oral statements made by the applicant that are:

• Considered true to the best of the applicant's knowledge

• Found to be false after further investigation

• Immaterial to the actual acceptability of the insurance contract

• Guaranteed to be true

When an insurance policy does not offer a continuation or replacement at its expiration date, it is considered a:

• Cancellation

• Nonrenewal

• Cessation

• Suspension

The part of the insurance contract that describes the covered perils and the nature of coverage of the contractual agreement between the insurer and the insured is called the:

• Declarations

• Exclusions

• Insuring agreement

• Conditions

When an insured makes truthful statements on the application for insurance and pays the required premium, it is known as which of the following?

• Consideration

• Legal purpose

• Contract of adhesion

• Acceptance

Which of the following is TRUE regarding TRIA?

• It applies to group life insurance

• It covers all types of commercial property and liability insurance

• It applies to personal and commercial property

• It is a temporary federal program for insured terrorism losses

An insurance contract must contain all of the following to be considered legally binding EXCEPT:

• Offer and acceptance

• Competent parties

• Beneficiary's consent

• Consideration

In return for premium, an insurance company must:

• Be fair in underwriting and pay covered losses

• Provide the insured with coverage adequate for all potential losses

• Use standardized tables of coverage for specific risks to be excluded from coverage

• Give the insurer valuable consideration

What term best describes the act of withholding material information that would be crucial to an underwriting decision?

• Breach of warranty

• Concealment

• Withholding

• Leading

The Gramm-Leach-Bliley Act was passed to:

• Allow consumers access to credit and private consumer reports

• Define insurance as interstate commerce

• Protect private customer information filed with a financial institution

• Allow insurance companies access to medical information for underwriting purposes