CA LIFE INSURANCE EXAM QUESTIONS WITH COMPLETE
SOLUTION
What is meant by referring to an insurance policy as a unilateral
contract?
Only one party makes a legally enforceable promise.
When must insurance records of insurance agents and brokers be
made available to the Insurance Commissioner?
At all times.
Any situation that presents the possibility of a loss is known as
a loss exposure
Which of the following information is not required to be
communicated in a Life insurance contract?
Personal judgment.
The direct distribution of insurance utilizes all of the following to
promote the sale of insurance EXCEPT
telephone call from an agent.
A contract in which one party promises to indemnify another against
loss that arises from an unknown event is
an insurance policy.
All of the occurrences listed below are examples of an insurable event
as defined by the California Insurance Code EXCEPT
an insured suffers a financial loss in the state lottery
All of the following statements about aleatory contracts are true
EXCEPT
the insured and insurer contribute equally to the contract.
All of the following would be considered unfair trade practices
EXCEPT
committing any act of discrimination whether it be deemed fair or unfair.
As authorized by the California Insurance Code, the Insurance
Commissioner has provided standards for names used by life
insurance agents. Under these standards which, if any, of the
following are automatically acceptable for Mary Brown, a holder of the
CLU designation?
Mary Brown Insurance Services.
A contract of indemnity is one in which
one party is restored to the same financial position the party was in before
the loss occurred.
, In insurance terminology, "indemnity" means
make whole.
As defined in the California insurance Code, "insurance" is a
contract.
What would a person be guilty of who refuses to deliver any books,
records, or assets to the commissioner once a seizure order has been
executed?
A misdemeanor
An agent who is acting as an insurance agent, broker, solicitor, life
agent, accident and health, or bail agent acts in which capacity when
handling premiums or return premiums for an insured?
Fiduciary
Which of the following statements regarding risk is TRUE?
Only pure risks are insurable.
The purchase of an insurance policy may accomplish all of the
following for the insured EXCEPT
the elimination of risk.
Insureds are entitled to recover an amount NOT greater than the
amount of their loss under the principle of
indemnity.
What rule is used to determine the importance of a representation?
The materiality of concealment.
The required contents of a policy include all of the following EXCEPT
the probability of loss
All of the following are characteristics of reinsurance EXCEPT it
increases the unearned premium reserve.
According to the California Insurance Code, an insurance policy must
specify all of the following EXCEPT the
financial rating of the insurer.
All of the following qualify as "background information" as defined in
Section 1729.2 of the California Insurance Code, EXCEPT
misdemeanor charges filed, not resulting in a conviction.
Loss retention is an effective risk management technique when all of
the following conditions exist EXCEPT the
probability of loss is unknown.
A situation in which there is a possibility of loss or a gain is a
speculative risk.
Why is having a large number of similar exposure units important to
insurers?
SOLUTION
What is meant by referring to an insurance policy as a unilateral
contract?
Only one party makes a legally enforceable promise.
When must insurance records of insurance agents and brokers be
made available to the Insurance Commissioner?
At all times.
Any situation that presents the possibility of a loss is known as
a loss exposure
Which of the following information is not required to be
communicated in a Life insurance contract?
Personal judgment.
The direct distribution of insurance utilizes all of the following to
promote the sale of insurance EXCEPT
telephone call from an agent.
A contract in which one party promises to indemnify another against
loss that arises from an unknown event is
an insurance policy.
All of the occurrences listed below are examples of an insurable event
as defined by the California Insurance Code EXCEPT
an insured suffers a financial loss in the state lottery
All of the following statements about aleatory contracts are true
EXCEPT
the insured and insurer contribute equally to the contract.
All of the following would be considered unfair trade practices
EXCEPT
committing any act of discrimination whether it be deemed fair or unfair.
As authorized by the California Insurance Code, the Insurance
Commissioner has provided standards for names used by life
insurance agents. Under these standards which, if any, of the
following are automatically acceptable for Mary Brown, a holder of the
CLU designation?
Mary Brown Insurance Services.
A contract of indemnity is one in which
one party is restored to the same financial position the party was in before
the loss occurred.
, In insurance terminology, "indemnity" means
make whole.
As defined in the California insurance Code, "insurance" is a
contract.
What would a person be guilty of who refuses to deliver any books,
records, or assets to the commissioner once a seizure order has been
executed?
A misdemeanor
An agent who is acting as an insurance agent, broker, solicitor, life
agent, accident and health, or bail agent acts in which capacity when
handling premiums or return premiums for an insured?
Fiduciary
Which of the following statements regarding risk is TRUE?
Only pure risks are insurable.
The purchase of an insurance policy may accomplish all of the
following for the insured EXCEPT
the elimination of risk.
Insureds are entitled to recover an amount NOT greater than the
amount of their loss under the principle of
indemnity.
What rule is used to determine the importance of a representation?
The materiality of concealment.
The required contents of a policy include all of the following EXCEPT
the probability of loss
All of the following are characteristics of reinsurance EXCEPT it
increases the unearned premium reserve.
According to the California Insurance Code, an insurance policy must
specify all of the following EXCEPT the
financial rating of the insurer.
All of the following qualify as "background information" as defined in
Section 1729.2 of the California Insurance Code, EXCEPT
misdemeanor charges filed, not resulting in a conviction.
Loss retention is an effective risk management technique when all of
the following conditions exist EXCEPT the
probability of loss is unknown.
A situation in which there is a possibility of loss or a gain is a
speculative risk.
Why is having a large number of similar exposure units important to
insurers?
