Texas All-Lines Adjuster Test – Complete Exam Study Guide & Practice Questions

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TEXAS ALL-LINES ADJUSTER TEST/ TEXAS ALL-
LINES ADJUSTER TEST 450 + QUESTIONS AND
VERIFIED SOLUTIONS/ ALREADY GRADED A+
Reinsurance
Allows an insurance company to sell part of the risk they have assumed from a
policyholder and thereby write more insurance and protect the company from any
large losses it would not be able to handle on its own.




Stock Companies
Insurance companies owned by stockholders.Charge non-assessable fixed
premiums.If company creates a profit, they may pay stockholders through
dividends




Mutual Companies
Insurance company owned by the policyholders.Can pay dividends to
policyholders when it makes a profit.Can assess policyholders to obtain additional
funds to keep company solvent.




What types of insurances companies are non-admitted and have no rate
regulations?
County Mutual CompaniesFarm Mutual CompaniesReciprocal ExchangesRisk
Retention GroupsPurchasing GroupsLloyds Plan




Speculative Risk



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When a chance is taken that may result in a financial gain such as gambling or the
stock market.




Self- Insurers
Some companies choose to self-insure rather than pay premium to an insurance
company.They take risk on themselves.




Private vs. Government Insurers
Most insurance is through private insurersSome insurance can only be purchased
through the federal government because private insurers do not want to take on
higher risks. Flood insurance is an example of government insurers.




Authorized Insurer
Admitted companyMeets minimum requirements of financial strength and
licensing.Has a certificate of authority.




Risk Management
Managing risks rather than just paying premiums to an insurance company.Right
premium for right risk




Unauthorized Users
Not regulatedNon-admittedSurplus lines




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Domestic Insurer
Organized under the laws of a particular state where it is housed or
domiciled.GEICO is based in DC, therefore in DC it is considered a domestic
insurer




Foreign Insurer
Organized under laws of some other state within the United States




Alien Insurer
Organized under the laws of a county other than the United States.




RESPONSIBILITIES to insurer
An agent has a fiduciary responsibility which requires a higher degree of care.




What may you be held liable for?
Making mistakesFailure to follow company instructionsFailure to disclose
informationDelay in forwarding informationExceeding the express or implied
authority given by a company.




What items can an agent be reprimanded for in not taking care of the insured?



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Misrepresenting insurance coverageFailure to procure insuranceProcurement of
inadequate coverageFailure to inform insured of renewalFailure to investigate an
insurer's financial solvency




Law of Agency
Agents or producers represent an insurance company or insurer and usually hold a
contract with that company.
Independent - usually represents several insurance companies on a commission
basis




Express Authority
Derived from a written or oral contract between the agent and the insurance
company.Describes rights and responsibilities.Issuing of binder




Implied Authority
Arises out of an agent's express authority. This authority is what the agent assumes
based on what he/she has been told.Advertising for the purpose of selling policies
or collecting premiums.




Pure Risk
Exists when only the chance of loss is present without the potential for a financial
gain.Only pure risk is insurable




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