Wisconsin Insurance- Exam Latest 2024/2025 Updated Questions and Answers Guaranteed 100% Success.

How to deal with risk - Avoid (Don;t fly, hang glide, mountain climb etc) Retain (Self insure) Transfer (Social vehicle for insurance) Share (incorporate or add a partner) Reduce (install fire alarms, stop smoking, etc) Essentials of an Insurance Contract - Think LACC Legal Purpose Acceptance offer -or acceptance counteroffer Competent Parties Consideration -Insurer "promise to pay" -Applicant's "premium" Enforcement Procedures - 1. A hearing must be held: - To revoke, suspend, or limit a producer's license - before adopting a new or changing an existing law - Whenever the law requires - Appeal the denial of an insurance License 2. Anyone aggravated by an insurance Commissioner Order - Liscensee has 30 days to request a hearing - OCI has not less than 10 nor more than 60 days to grant 3. No hearing required for: - Failure to pay license renewal fee- Failing to meet continuing education requirements 4. Re-Hearings may be granted if: - Material fact evidence was overlooked - New Evidence - Liscensee has: - 20 days to request - The OCI has 20 days to grant, deny, or do nothing Adhesion (Stick to) - "Take it or leave it" Can shop around Aleatory - A contract in which the consideration or monetary value between the parties is not equal The policy holder pays a premium and may collect nothing from the insurer is no loss occurs; however if a loss does occur, the policy holder may collect considerably more than the amount of the premium Assessable Policy - Policyholder takes risk of loss Association Insurer - 1. Lloyd's of London - Not an Insurance company - Admitted in Two States - Illinois and Kentucky - In WI, they are treated as "Surplus Lines" - Must have $1 billion in assets - Not to be confused with American LloydsClassification of Insurers - 1. Domestic - Founded and chartered in your resident state 2. Foreign - Founded and chartered outside your resident state, but in the U.S. 3. Alien - Funded and chartered outside of the U.S. Criminal Penalties - Enforcement Sanctions - 1. Court Injunction 2. Compulsive Forfeiture - Failure to comply with a Commissioner's Order - Up to $5,000/day Fair Credit Reporting Act - 1. Requires fair and accurate reporting of information about consumers 2. Insurers must inform applicants about investigations 3. If denied, Insurer must provide name of credit agency 4. Insurance company is liable if procedure not followed Fraternal Insurer - 1. Type of mutual 2. Founded for the benefits and sales to their members 3. Many founded along religious or ethnic lines 4. Generally non-profit Hazard - Situations or factors that may increase the possibility of a loss Common Types:Physical - Bad Breaks, ice on sidewalk Moral - Dishonest Tendencies Morale - Having a careless attitude because of coverage Legal - Federal and/or state regulations must be followed Insurable Interest - Deemed to have if the possibility exists of suffering financial or economic harm as a result of damage or destruction to person or property 1. For life and health - Yourself, Spouse, and Dependent Children - Only has to be present at time of application 2. For property and causality insurance - Must be present at time of application and also at the time of loss/claim Insurable Risk - 1. Losses reasonable to predict 2. Losses must be definite and measurable 3. Losses must not be catastrophic 4. Losses must use randomness of selection 5. Losses avoid adverse selection Insurance Policy - Legal and binding contract, subject to contract law Key Insurer Departments - 1. Actuarial - Function: Rate Making 2. Underwriting - Function: Risk selectIon and classification 3. Sales and Marketing - Function: Sales training and field compliance4. Claims - Function: Process claims 5. Legal-Consumer Affairs Law of Large numbers - Allows for predictability of risk McCarran-Ferguson Act - 1. Passed in 1945 by congress to reaffirm the federal governments authority to regulate the insurance industry over the states 2. Agreed that the Act would not be invoked as long as the states adequately regulated the industry