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Chapters 4-6 Review Flashcards | StudBud
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Chapters 4-6 Review
Chapters 4-6 Review
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1
Which of the following are owners of stock insurance companies?
Shareholders
President/CEO
Underwriting Syndicates
Policy Holders
2
Subrogation is...
Kimmy K having acting talent
Right of Recovery of Payment After Loss
Value of property after Loss
Insurer's right to collect on their insurance policy
3
Contracts need to be in writing
True
False
4
Which of the following is a unique department for insurance companies?
Accounting
Finance
Administration
Actuarial
5
The Insurer is known as which party in an insurance claim?
Third Party
Second Party
First Party
Mario Party
6
Which of the following best describes; Captive Insurance?
Is a Risk Management technique for Financing Risk
Is an inexpensive endevour
Option for small companies who do not wish to pay insurance premiums
Issues polices without reinsurance
7
After a policy is bound, any new reported material facts need to be reported to whom?
Cookie Monster
Insurer
Principal Broker
Insured
8
When can an insured cancel their insurance policy?
Anytime they wish
Within 24 hours of binding policy
30 Days Notice
10 Days Notice
9
Sources of Profit for Stock Companies include which of the following?
Underwriting Profit & Investment Income
Real Estate Investment
Interest on Investments
Prudent Underwriting Effors in new insurable market
10
Why is ut-most good faith an important aspect of an insurance policy?
One party is in a superior position of information regarding risk
Not quite a material fact, but important
Not required by law to disclose all information
Insureds need to pay their premium
11
Which is the best description of a policy endorsement?
Changes to policy unless they contradict exisiting policy wording
Addition to policy while policy is not in force
Change to policy, takes precedent of previous policy wording
Addition to policy which takes precedent of previous policy wording
12
An Insurance Binder is:
Issued by Broker as proof of Coverage
Informal proof of coverage provided by insurer
Not Important at all
Agreement to limits of insurance given by insurer to broker
13
Under the Civil Code how would you nullify a contract for entering a contract without the assistance of their tutor?
Fear or Violence
Lesion
Fraud
Empty choice
14
An insurance certificate is
Empty choice
Insurnace License to sell and teach insurance
Insurance Quotes provided to marketing exercise
A document which certifies that insurance is in place and shows amounts
15
Which of the following cannot have insurable interest in a property?
Third Party
Financial Insititution
Insurer
Insured
16
An Insurance Application is
Empty choice
Request for Insurance certificate from insurance company
A Request for Insurance made to insurer
Information taken from prospect to quote insurance
17
Treaty Reinsurance is...
Formal agreement to reinsure capacity to block other markets
Automatic resinsurance without having to submit risk to every reinsurer
Financing RIsk Management Technique for Insured
Reinsurance placed on case by case basis.
18
Which of the Following is NOT an Example of Contract Consideration?
Agreeing to Exchange Services
Promise to pay later for Services not yet done
Exchanging Money or Services
Unsolicited Services Rendered with payment expected
19
A void policy can still respond to claims while insured was on-risk?
False
True
20
What are an the insurer's options if they find a material fact and need to reevaluate the risk?
Broker knows Savannah, we're bougie
Stay on risk & charge more or cancel policy with premium refund
Refund Premium, void policy
Cancel policy, keep premium
21
The declarations page of a policy contains
Perils insured against
Policy Conditions
Amounts insured
Genreal Condtions
22
When an insurer voids a policy, how is it treated under the law?
Cancelled with no return Premium
Cancelled with premium returned
Like it never existed
Cancelled, but still record of it
23
Which of the following describes Replacement Cost?
Value of item in current market condition, not including depreciation
Value of item in current market condition including depreciation
Value of the item in new condition
Value of new item in present market condition
24
Which of the following is NOT part of the Insuring agreements section?
Description of the property covered
Circumstances under which the insured may receive insurance proceeds
Perils insured against
Parties to the contract
25
A Cover Note is Typically issued by:
Insurance Broker/Agent
Insurance Company
26
Which of the following is NOT true regarding Mutual Insurance Companies?
Companies are traded on TSX
Can share in success/failure of company
Policyholders have voting rights
Can be owned by policy holders
27
Under Common Law, you can enforce a law without the existence of an agreement?
True
False
28
Who would initiate a SHORT rate cancellation?
Empty choice
Client
Broker
Insurance Company
29
Which of the following is NOT included in Coverage Summary?
Amount Insured
End Date
Rate
Claims Contact Number
30
What must an insurer do when they want to consider a policy void for misrepresentation?
Send a standard letter to terminate the policy on a pro-rata basis
Send a standard letter to terminate the policy on a short-rate basis
Send a letter with the return of the entire premium
Pay any outstanding claims and then return premium on a pro-rata basis
31
Which of the Following is an example of misrepresentation?
Not disclosing to insurer that Nola has 2 dogs she is planning on adopting
Telling insurer that hydrant is 1 km away when it is 1.5 km
Disclosing to insurer roof was updated 10 years ago when it was actually 12
Not disclosing aluminum wiring knowing it will cause policy to be declined
32
Which of the Following is NOT a way to nullify a contract in Quebec
Error
Genuine Intent
Lesion
Violence
33
Which of the following cannot have the capacity to contract in Common Law?
Leafs Fans
Elderly
Minors
Michael Scott
34
An Endorsement is
Change to a quoted policy
Hunter's approval of cancelling the midterm
Changing Premium on Policy
An ammendment added to the policy in force
35
Richard's 1980 Camaro insured for $15k was totalled. Market Value $10k. Deductible = $1k. What will his payout be?
$15k
$9k
$9k plus 6% PST
$10k
36
Which of the following does not describe a stock mutual?
Write insurance for general public
Premiums can flucuate before policy expires
Policy Holders are not members of Mutual
Premiums are fixed
37
What is a unique additional element is required for insurance contracts?
Indemnity
Contribution
Insurable Interest
Utmost Good Faith
38
Which of the following statements is NOT true about the Lloyd's Market?
Exclusively Deal with Broker Channel
Individuals and Corporations Provide Capital for Llyod's Market
Llyod's is a large insurance company based in London, England
Writes business in Aviation, Kidnap & Ransom
39
Which of the following describes Actual Cash Value?
Value of new item in present market condition
Value of item in current market condition including depreciation
Value of the item in new condition
Value of item in current market condition, not including depreciation
40
When may we see an Automatic Renewal of Coverage?
Home Insurnace
Kidnap & Ransom Insurance
Commerical Insurance
Cyber Insurance
41
Who would initiate a Pro RATA cancellation?
Client
Broker
Insurance Company
Empty choice
42
An Insurnace Policy includes which of the following:
Claims Payout Information
Broker Commission
Link to Sammarah's Slam Poetry
Signature Clause
43
Policy Conditions are...
Premium which is charged and discounts recieved
The Rights and duties of both insured and insurer
Mandatory by law & regulated by province
Asking why Abdu is real slim shady
44
A void Insurance Contract...
Is cancelled with no premium Returned
Cancelled with unearned premium returned
Treated like it never existed, premium returned in full
Treated like it exsited only while policy was in force, premium returned
45
Who is the signatory of the signature clause of an insurance policy?
Managing Director of Sales
Underwriting Supervisor
Broker/Agent
CEO of Insurance Company
46
Contribution is defined as:
Tara cracking jokes during our weekly class discussion
More than one policy has been issued for a risk
Multiple policies issued for a risk, one takes the loss, the other does not
One policy has been issued for a risk
47
Emily's new house has replacement cost of $500k. House burns down & causes $750k in damage. How much could Emily Claim?
$500k Minus Depreciation
$750k
$500k
$750k Minus Depreciation
48
Facilitateive Reinsurance is...
Financing RIsk Management Technique for Insured
Formal agreement to reinsure capacity to block other markets
Automatic resinsurance without having to submit risk to every reinsurer
Reinsurance placed on case by case basis.
