This chapter is from the book
This chapter is from the book
This chapter is from the book
Exam Prep Questions
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A mutual insurance company
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is managed by an attorney-in-fact.
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pays dividends to its stockholders.
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is owned by its insureds.
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is a voluntary association of individuals that shares in writing insurance contracts for a variety of risks.
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A nonexclusive agent
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represents a single insurance company.
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works for a direct writer.
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is an independent businessperson.
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does not collect commissions.
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Solicitors may not
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issue or countersign policies.
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sell insurance.
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collect premiums.
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sign an application.
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At DEF Insurance Company, agents are employees of the company who are paid a salary plus commissions. This is an example of what type of insurance marketing system?
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Captive
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Independent
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Direct writer
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Direct response
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Which insurance company department is responsible for accepting and rejecting applications based on company standards?
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Underwriting
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Loss Control
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Claims
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Agency
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Which insurance company department is responsible for paying insureds' covered losses?
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Audit
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Claims
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Underwriting
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Reinsurance
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Who is responsible for licensing insurance agents?
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Lloyd's Associations
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State insurance department
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Interstate Commerce Commission
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Insurance Services Office
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Agent Blondell is offering a free television to every applicant who agrees to buy insurance through his agency. In most states, this is an illegal practice known as
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rebating.
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twisting.
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misrepresentation.
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failure of fiduciary responsibility.
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J&M Industries does not have a group health insurance plan for its employees. Instead, it pays employees' medical expenses out of a fund specifically created for this purpose. This is an example of
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fraternal insurance.
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self-insurance.
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reinsurance.
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government insurance.
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Which of the following statements concerning regulation of the insurance industry is correct?
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The insurance industry is regulated exclusively by the federal government.
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The insurance industry is very loosely regulated.
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The state insurance department is responsible for controlling insurance matters within the state.
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-The state insurance department serves only the interests of the insurance industry.
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Which of the following is not one of the duties of an agent?
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Making appropriate coverage recommendations to prospective customers
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Writing the provisions of a customer's policy
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Helping prospective customers complete the application
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Assuring that customers understand the coverage they are purchasing
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The written agency contract between an insurer and an agent constitutes the agent's
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express authority.
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implied authority.
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assertive authority.
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apparent authority.
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The Excel Insurance Company is incorporated in the state of Tennessee. It is also authorized to do business in Georgia. In Georgia, Excel is known as what type of company?
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Alien
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Foreign
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Domestic
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Non-admitted
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Can states require insurance companies to use certain forms or rates in connection with certain types of insurance?
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No, that would be a violation of the principle of open competition.
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No, they can only require that forms and rates be subject to prior approval.
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No, insurers can always begin using forms and rates as soon as they are properly filed with the state.
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Yes, some states have mandatory forms or rates for certain coverages.