NEW YORK SERIES 17-55 LIFE, ACCIDENT & HEALTH
INSURANCE AGENT/BROKER COMPLETE
QUESTIONS AND DETAILED SOLUTIONS LATEST
UPDATE THIS YEAR JUST RELEASED
1. Which person generally represents an insurance company rather than the
insured?
A. Insurance broker
B. Insurance agent
C. Insurance consultant
D. Public adjuster
Answer: B
Rationale: An insurance agent represents the insurer(s) for which the agent is
appointed. A broker generally represents the insured and seeks coverage from
insurers willing to accept the risk.
2. Under New York licensing requirements, an individual applying for an
insurance producer license generally must be at least:
A. 16 years old
B. 18 years old
C. 19 years old
D. 21 years old
Answer: B
Rationale: New York requires an insurance license applicant to be at least 18
years old.
,3. A New York resident seeking both Life and Accident & Health authority
generally completes how many hours of approved prelicensing education?
A. 10 hours
B. 20 hours
C. 30 hours
D. 40 hours
Answer: D
Rationale: The combined Life, Accident & Health authority requires 40 hours of
approved prelicensing education.
4. Which type of risk involves the possibility of loss but no possibility of gain?
A. Speculative risk
B. Pure risk
C. Investment risk
D. Entrepreneurial risk
Answer: B
Rationale: Pure risk involves only the possibility of loss or no loss. Insurance is
primarily concerned with pure risks.
5. Which of the following is a physical hazard?
A. Intentionally submitting a fraudulent claim
B. Carelessness caused by having insurance
C. Faulty electrical wiring
D. Concealing a medical condition
Answer: C
,Rationale: A physical hazard is a tangible condition that increases the probability
or severity of loss. Faulty wiring is a classic example.
6. Which principle allows insurers to predict losses more accurately when a
large number of similar exposure units are insured?
A. Principle of indemnity
B. Law of large numbers
C. Principle of adhesion
D. Principle of contribution
Answer: B
Rationale: The law of large numbers allows insurers to make more reliable
predictions about losses as the number of similar exposure units increases.
7. An insurer transfers part of its risk to another insurer. This arrangement is
called:
A. Coinsurance
B. Reinsurance
C. Subrogation
D. Assignment
Answer: B
Rationale: Reinsurance is insurance purchased by an insurer to transfer some of
its risk to another insurer.
8. An insurance contract is described as unilateral because:
A. Only one party makes a promise that is legally enforceable
B. Only one party signs the contract
, C. Only one party receives consideration
D. The contract covers only one person
Answer: A
Rationale: The insurer makes an enforceable promise to pay covered claims,
while the insured is not legally obligated to continue paying premiums.
9. Which characteristic means an insurance policy is generally drafted by the
insurer, with ambiguities often interpreted against the drafter?
A. Aleatory
B. Adhesion
C. Personal
D. Conditional
Answer: B
Rationale: A contract of adhesion is prepared primarily by one party—the
insurer—and accepted or rejected by the other party.
10. An insurance contract is aleatory because:
A. Both parties must exchange equal values
B. The contract can be canceled at any time
C. The values exchanged may be unequal depending on whether a loss occurs
D. The insured controls the insurer's underwriting
Answer: C
Rationale: Insurance contracts are aleatory because the amount paid by the
insurer may be substantially greater than premiums paid if an insured loss occurs.
11. Which of the following is NOT generally an element of a valid contract?
INSURANCE AGENT/BROKER COMPLETE
QUESTIONS AND DETAILED SOLUTIONS LATEST
UPDATE THIS YEAR JUST RELEASED
1. Which person generally represents an insurance company rather than the
insured?
A. Insurance broker
B. Insurance agent
C. Insurance consultant
D. Public adjuster
Answer: B
Rationale: An insurance agent represents the insurer(s) for which the agent is
appointed. A broker generally represents the insured and seeks coverage from
insurers willing to accept the risk.
2. Under New York licensing requirements, an individual applying for an
insurance producer license generally must be at least:
A. 16 years old
B. 18 years old
C. 19 years old
D. 21 years old
Answer: B
Rationale: New York requires an insurance license applicant to be at least 18
years old.
,3. A New York resident seeking both Life and Accident & Health authority
generally completes how many hours of approved prelicensing education?
A. 10 hours
B. 20 hours
C. 30 hours
D. 40 hours
Answer: D
Rationale: The combined Life, Accident & Health authority requires 40 hours of
approved prelicensing education.
4. Which type of risk involves the possibility of loss but no possibility of gain?
A. Speculative risk
B. Pure risk
C. Investment risk
D. Entrepreneurial risk
Answer: B
Rationale: Pure risk involves only the possibility of loss or no loss. Insurance is
primarily concerned with pure risks.
5. Which of the following is a physical hazard?
A. Intentionally submitting a fraudulent claim
B. Carelessness caused by having insurance
C. Faulty electrical wiring
D. Concealing a medical condition
Answer: C
,Rationale: A physical hazard is a tangible condition that increases the probability
or severity of loss. Faulty wiring is a classic example.
6. Which principle allows insurers to predict losses more accurately when a
large number of similar exposure units are insured?
A. Principle of indemnity
B. Law of large numbers
C. Principle of adhesion
D. Principle of contribution
Answer: B
Rationale: The law of large numbers allows insurers to make more reliable
predictions about losses as the number of similar exposure units increases.
7. An insurer transfers part of its risk to another insurer. This arrangement is
called:
A. Coinsurance
B. Reinsurance
C. Subrogation
D. Assignment
Answer: B
Rationale: Reinsurance is insurance purchased by an insurer to transfer some of
its risk to another insurer.
8. An insurance contract is described as unilateral because:
A. Only one party makes a promise that is legally enforceable
B. Only one party signs the contract
, C. Only one party receives consideration
D. The contract covers only one person
Answer: A
Rationale: The insurer makes an enforceable promise to pay covered claims,
while the insured is not legally obligated to continue paying premiums.
9. Which characteristic means an insurance policy is generally drafted by the
insurer, with ambiguities often interpreted against the drafter?
A. Aleatory
B. Adhesion
C. Personal
D. Conditional
Answer: B
Rationale: A contract of adhesion is prepared primarily by one party—the
insurer—and accepted or rejected by the other party.
10. An insurance contract is aleatory because:
A. Both parties must exchange equal values
B. The contract can be canceled at any time
C. The values exchanged may be unequal depending on whether a loss occurs
D. The insured controls the insurer's underwriting
Answer: C
Rationale: Insurance contracts are aleatory because the amount paid by the
insurer may be substantially greater than premiums paid if an insured loss occurs.
11. Which of the following is NOT generally an element of a valid contract?
