Oklahoma Property and Casualty - Motor Vehicle Included Adjuster-Section 1 Questions + Answers Graded A+

"Practicing Insurance" Without a License - 1) A producer or adjuster, with a suspended or revoked license, who continues to "practice insurance" (transact insurance) after losing his/her license due to a violation of the insurance code is subject to a felony and the following criminal penalties: -Civil fine imposed by a Court of Law (Not the OID) up to $5000 and/or jailed from 1 to 5 years. 2) A person never licensed as a producer or adjuster who "practice insurance" (transact insurance) is subject to a misdemeanor and the following criminal penalties: -Civil fine imposed by a Court of Law (Not the OID) up to $500 and/or jailed from 6 months to 1 year. 2 Divisions of the U.S. Judicial System - 1) Criminal Court- Prosecutes a member of society for violation of law-- a public wrong; Remedy is criminal fine or imprisonment. 2) Civil Court (common law)- Sues for legal liability for a private wrong, i.e,. tort liability; Remedy is monetary compensation for damages. 3 steps to Create Tort Liablilty - 1) Duty to act with reasonable care. 2) Breach of Duty = negligence 3) Injury or damage Abandonment - Prohibits the insured from abandoning damaged property to the insurance company for a total loss. Only the insurer has the right to pay the insured for a total loss. Actual Cash Value (ACV) - aka Market value- replacement cost (cost new at the time of the loss less depretiation Actuary - Mathematician who develops the rates for the insurer. Adjuster - Investigates claims, adjusts losses, and negotiates claim settlements for the insurer.Adjuster Licensing Act - This act governs the qualifications and procedures for the licensing of insurance adjusters. It simplifies and organizes statutory language to: 1) improve efficiency; 2) permit the use of new technology, and; 3) reduce costs associated with issuing and renewing insurance licenses. A licence shall remain in effect unless revoked or suspended (aka perpetual) as long as fees are paid and continuing education is fulfilled. Agreed Amount - The insurer and the insured agree on the value at the time of application rather than the time of loss. Aleatory Contract - Equal value is not given by both parties. One party can benefit more than the other based on chance (or the occurrence of an uncertain event) Alien Insurer - Formed (chartered or incorporated) under the laws of another country. Appraisal Clause - Used when the insured and the insurer cannot agree on the amount of a covered property loss. Each party chooses an appraiser and the appraisers pick an umpire appraiser. Agreement of 2 out of 3 appraisers will be binding. Both parties equally pay the cost of the appraisal. Apprentice Trainee Adjuster - Temporary license issued for new adjusters for 180 days. Arbitration - Used when the insured and the insurer cannot agree on the amount of damages in a liability loss Assignment (transfer of ownership rights) - Transfer of interest in an insurance policy. ______ can be transferred only with the insurance company's consent. Reinforces the concept that an insurance policy is a personal contract Authorized Insurer (aka Admitted Insurer) - Has an Oklahoma Certificate of Authority.-- Would include a domestic, foreign, or alien insurer doing business in Oklahoma Bailee - A person who has the insured's property in his/her care, custody or control, (i.e. dry cleaners, moving companies, etc.)Binder - A temporary insurance contract. Provides temporary protection for a maximum period of 90 days. A _____ can be written or verbal. Boycott, Coercion, and Intimidation - Entering into an agreement that would result in the restraint or monopoly of the insurance business. Cancellation - Midterm termination of the policy Cancellation by Insured - Anytime by giving notice in writing Cancellation by Insurer - After coverage has been in effect more than 45 days, the insurance company may cancel only for the following reasons: -Nonpayment of premium -Discovery of fraud or material misrepresentation -Discovery of willful or reckless acts of the named insured -Violation of local fire, safety, building ordinance or law -Conviction of the named insured of arson or fraud which creates a moral hazard Casualty Insurance - ______ _________ is primarily liability coverage that protects an insured when legally responsible to a third party claimant. - A third party claimant can include individuals, corporations, associations, partnerships, or any other legal entity making a claim against the insured. Classes of Adjuster Licenses (6) - 1) Property; 2) Casualty; 3) Workers Compensation; 4) Crime and Fidelity Bonds; 5) Crop Hail, and: 6) Multi-peril crop. Coercion of Borrowers - A lender cannot require a borrower to obtain insurance from the financial institution as a condition of the loan being made.