DEVOTED AGENT CERTIFICATION
UPDATED ACTUAL QUESTIONS AND
CORRECT ANSWERS EXAM SCRIPT
●● When can a representation be altered or withdrawn?
Answer: It can be altered or withdrawn before the insurance is issued.
●● The function of insurance is best described as:
Answer: It spreads financial risk over a large group so as to minimize
the loss to any one individual.
●● What are the four major elements of a contract?
Answer: The four major elements of a contract are: (ACCL) agreement,
competent parties, legal purpose, and consideration.
●● A hazard is best defined as:
Answer: Anything that increases the chance of loss or severity of loss
due to a peril.
●● Which of the following are the main types of risks?
Answer: Speculative and pure
,●● T/F: Materiality of concealment is judged different than materiality
of a misrepresentation.
Answer: False
●● T/F: Concealment or false statements about material facts may allow
the injured party to rescind the contract, even at a later date.
Answer: True
●● Materiality is determined not by the event but by the influence of the
facts on the party to whom communication is due, in form their estimate
of the disadvantages of the proposed contract.
Answer: True
●● An immaterial misrepresentation does not void coverage.
Answer: True
●● When large numbers of similar risks are combined in a group future
claims become more
Answer: Predictable
●● Balancing poor risk with preferred risk, with the average or standard
risk being in the middle is known as what?
Answer: Distribution of exposures
, ●● The price of insurance for each exposure is referred to as:
Answer: Rate
●● What is rescission?
Answer: Rescission is the revocation (official cancellation) of a contract.
●● A representation in an insurance contract qualifies as:
Answer: An implied warranty
●● For insurable interest to exist:
Answer: the insured must establish that they actually own something to
be insured.
●● The principle used as the basis for establishing probability of losses
occurring in the insurance industry is:
Answer: Law of large number
●● Insurable interest is best described as:
Answer: The policyowner must expect to suffer a loss when the insured
dies or becomes disabled.
●● A peril is:
Answer: the actual cause of the loss.
UPDATED ACTUAL QUESTIONS AND
CORRECT ANSWERS EXAM SCRIPT
●● When can a representation be altered or withdrawn?
Answer: It can be altered or withdrawn before the insurance is issued.
●● The function of insurance is best described as:
Answer: It spreads financial risk over a large group so as to minimize
the loss to any one individual.
●● What are the four major elements of a contract?
Answer: The four major elements of a contract are: (ACCL) agreement,
competent parties, legal purpose, and consideration.
●● A hazard is best defined as:
Answer: Anything that increases the chance of loss or severity of loss
due to a peril.
●● Which of the following are the main types of risks?
Answer: Speculative and pure
,●● T/F: Materiality of concealment is judged different than materiality
of a misrepresentation.
Answer: False
●● T/F: Concealment or false statements about material facts may allow
the injured party to rescind the contract, even at a later date.
Answer: True
●● Materiality is determined not by the event but by the influence of the
facts on the party to whom communication is due, in form their estimate
of the disadvantages of the proposed contract.
Answer: True
●● An immaterial misrepresentation does not void coverage.
Answer: True
●● When large numbers of similar risks are combined in a group future
claims become more
Answer: Predictable
●● Balancing poor risk with preferred risk, with the average or standard
risk being in the middle is known as what?
Answer: Distribution of exposures
, ●● The price of insurance for each exposure is referred to as:
Answer: Rate
●● What is rescission?
Answer: Rescission is the revocation (official cancellation) of a contract.
●● A representation in an insurance contract qualifies as:
Answer: An implied warranty
●● For insurable interest to exist:
Answer: the insured must establish that they actually own something to
be insured.
●● The principle used as the basis for establishing probability of losses
occurring in the insurance industry is:
Answer: Law of large number
●● Insurable interest is best described as:
Answer: The policyowner must expect to suffer a loss when the insured
dies or becomes disabled.
●● A peril is:
Answer: the actual cause of the loss.
