Louisiana Life, Health, and Accident
Insurance Licensing Exam questions and
100% correct answers
Insurance - Correct Answer--the transfer of Pure risk to the
insurance company in consideration for a premium
must be pure risk and calculable.
Pure Risk - Correct Answer--the chance of loss without any chance
of gain; insurable
Speculative Risk - Correct Answer--possibility for gain or loss; not
insurable
Risk - Correct Answer--Chance of loss
Exposure - Correct Answer--a condition that could result in loss
hazard - Correct Answer--something that increases the chance of
loss
eg. presence of physical hazard increases the chance of a loss
occuring
peril - Correct Answer--cause of loss
,eg. fire
law of large number - Correct Answer--allows insurers to predict
claims more accuratley; applies to grops of people not individuals.
The more people in the group, the more accurate the predictions
are
Reinsurance - Correct Answer--A form of insurance whereby one
insurance company (the reinsurer) in consideration of a premium
paid to it, agrees to indemnify another insurance company (the
ceding company) for part or all of its liabilities from insurance
policies it has issued.
stock insurer - Correct Answer--may pay dividends to shareholders
(stockholders), thought not guarenteed
reciprocal insurance company - Correct Answer--managed by an
attorney-in-fact; unincorporated association of individuals who
insure each other
government insurance offering - Correct Answer--offers insurance
for social needs (eg. flood insurance, workers compensation), but
doesn't offer to prevent fraud
foreign company - Correct Answer--has their home office in
another state
,alien company - Correct Answer--a insurer incorporated outside
the US
producer liability - Correct Answer--personally liable when violate
producer's contract
producer represenation - Correct Answer--represent the insurance
company, not the insured
independent producer - Correct Answer--owns their own accounts,
and are not insurance company employees
producer authority - Correct Answer--expressed
implied
apparent
express authority of producer - Correct Answer--authority of
producer that is written in his or her contract
implied authority of producer - Correct Answer--authority not
expressly (writtten) granted, but actual authority producer has to
transact normal business activities
Legal Elements of Contract - Correct Answer--Consideration
Offer
Acceptance
, Legal Purpose
Legal Capacity
Consideration Clause - Correct Answer--something of value must
be exchanged, though it does not have to be equal; policy can't
be voided for unequal consideration
Offer - Correct Answer--specific and definte proposal to enter into
a contract
insurance contracts are - Correct Answer--contracts of adhesion
("take it or leave it"), therefore policy ambiguities always favor
the insured; unilateral contracts (only the insurer has a legal
obligation to uphold)
Principle of Indemnity - Correct Answer--the purpose of insurance
is to restore the insured to the same position as before the loss
occurred
Principle of Utmost Good Faith - Correct Answer--all parties to an
insurance transaction are honest
Representation - Correct Answer--the truth to the best of one's
knowledge
Warranty - Correct Answer--a sworn truth, guaranteed to be true,
and if a breach of warranty is found, it could potentially makes the
contract voidable.
Insurance Licensing Exam questions and
100% correct answers
Insurance - Correct Answer--the transfer of Pure risk to the
insurance company in consideration for a premium
must be pure risk and calculable.
Pure Risk - Correct Answer--the chance of loss without any chance
of gain; insurable
Speculative Risk - Correct Answer--possibility for gain or loss; not
insurable
Risk - Correct Answer--Chance of loss
Exposure - Correct Answer--a condition that could result in loss
hazard - Correct Answer--something that increases the chance of
loss
eg. presence of physical hazard increases the chance of a loss
occuring
peril - Correct Answer--cause of loss
,eg. fire
law of large number - Correct Answer--allows insurers to predict
claims more accuratley; applies to grops of people not individuals.
The more people in the group, the more accurate the predictions
are
Reinsurance - Correct Answer--A form of insurance whereby one
insurance company (the reinsurer) in consideration of a premium
paid to it, agrees to indemnify another insurance company (the
ceding company) for part or all of its liabilities from insurance
policies it has issued.
stock insurer - Correct Answer--may pay dividends to shareholders
(stockholders), thought not guarenteed
reciprocal insurance company - Correct Answer--managed by an
attorney-in-fact; unincorporated association of individuals who
insure each other
government insurance offering - Correct Answer--offers insurance
for social needs (eg. flood insurance, workers compensation), but
doesn't offer to prevent fraud
foreign company - Correct Answer--has their home office in
another state
,alien company - Correct Answer--a insurer incorporated outside
the US
producer liability - Correct Answer--personally liable when violate
producer's contract
producer represenation - Correct Answer--represent the insurance
company, not the insured
independent producer - Correct Answer--owns their own accounts,
and are not insurance company employees
producer authority - Correct Answer--expressed
implied
apparent
express authority of producer - Correct Answer--authority of
producer that is written in his or her contract
implied authority of producer - Correct Answer--authority not
expressly (writtten) granted, but actual authority producer has to
transact normal business activities
Legal Elements of Contract - Correct Answer--Consideration
Offer
Acceptance
, Legal Purpose
Legal Capacity
Consideration Clause - Correct Answer--something of value must
be exchanged, though it does not have to be equal; policy can't
be voided for unequal consideration
Offer - Correct Answer--specific and definte proposal to enter into
a contract
insurance contracts are - Correct Answer--contracts of adhesion
("take it or leave it"), therefore policy ambiguities always favor
the insured; unilateral contracts (only the insurer has a legal
obligation to uphold)
Principle of Indemnity - Correct Answer--the purpose of insurance
is to restore the insured to the same position as before the loss
occurred
Principle of Utmost Good Faith - Correct Answer--all parties to an
insurance transaction are honest
Representation - Correct Answer--the truth to the best of one's
knowledge
Warranty - Correct Answer--a sworn truth, guaranteed to be true,
and if a breach of warranty is found, it could potentially makes the
contract voidable.
