NC Adjuster License Practice Exam
Complete Study Guide and 100% Verified
Answers
• National Association of Insurance Commissioners (NAIC) Answer:
governing org. for all state insurance commissioners, directors. Works
towards standardization of insurance codes in various states. All
legislation passed is non-binding on the states until passed by the state
legislative.
• Domestic Insurers . Answer: organized under the laws of the same
state in which they are domiciled.
• Foreign Insurers . Answer: Formed under the laws of a different state
from the one in which they are doing business.
• Alien Insurers . Answer: Formed under the laws of another country
from the one in which they are doing business in.
• Indemnity Contract . Answer: Contract type that promises to pay an
amount equal to the loss covered under the policy.
• Reimbursement Contract . Answer: Is a contract type which reimburses
expenses.
, • Valued Contract . Answer: A contract type in which the insurer agrees
to pay a specific sum of money no matter what the amount of loss may
be. Ex. Life Insurance
• Adverse Selection . Answer: Selection of such a risk has a greater than
average chance of producing a loss.
• Estoppel . Answer: Legal impediment to one party denying the
consequences of its own actions.
• Pro-Rata . Answer: Insurance company must return any advanced
unused premium paid by the policy owner if the insurance company
terminates the contract before policy ends.
• Risk . Answer: Uncertainty of a financial loss
• Speculative Risk . Answer: Uncertain prospect of a financial gain or
loss and are uninsurable. Ex. Lottery
• Pure Risk . Answer: Involving a chance of loss or no loss, but no gain,
and are insurable.
• Risk Avoidance . Answer: Ensures that an individual or business does
not get involved in an activity leading to a potential financial loss.
Complete Study Guide and 100% Verified
Answers
• National Association of Insurance Commissioners (NAIC) Answer:
governing org. for all state insurance commissioners, directors. Works
towards standardization of insurance codes in various states. All
legislation passed is non-binding on the states until passed by the state
legislative.
• Domestic Insurers . Answer: organized under the laws of the same
state in which they are domiciled.
• Foreign Insurers . Answer: Formed under the laws of a different state
from the one in which they are doing business.
• Alien Insurers . Answer: Formed under the laws of another country
from the one in which they are doing business in.
• Indemnity Contract . Answer: Contract type that promises to pay an
amount equal to the loss covered under the policy.
• Reimbursement Contract . Answer: Is a contract type which reimburses
expenses.
, • Valued Contract . Answer: A contract type in which the insurer agrees
to pay a specific sum of money no matter what the amount of loss may
be. Ex. Life Insurance
• Adverse Selection . Answer: Selection of such a risk has a greater than
average chance of producing a loss.
• Estoppel . Answer: Legal impediment to one party denying the
consequences of its own actions.
• Pro-Rata . Answer: Insurance company must return any advanced
unused premium paid by the policy owner if the insurance company
terminates the contract before policy ends.
• Risk . Answer: Uncertainty of a financial loss
• Speculative Risk . Answer: Uncertain prospect of a financial gain or
loss and are uninsurable. Ex. Lottery
• Pure Risk . Answer: Involving a chance of loss or no loss, but no gain,
and are insurable.
• Risk Avoidance . Answer: Ensures that an individual or business does
not get involved in an activity leading to a potential financial loss.
