TEXAS ALL LINES COMPREHENSIVE EXAM SET
DETAILED Q&A GRADED A+
⩥ Adverse Selection. Answer: the tendency for poor risks to seek and be
covered for insurance rather than an average risk in a group situation;
ex: a group of farmers presents a greater risk to an insurer than a group
of car salespeople.
⩥ Law of Large Numbers. Answer: allows an insurer to predict their
future losses in particular groups;
⩥ Domestic Insurer. Answer: An insurer that is incorporated under the
laws of the state in which it conducts business
⩥ Foreign Insurer. Answer: An insurer doing business in another state, in
which it is not incorporated
⩥ Alien. Answer: An insurer incorporated in a country other than the
United States.
⩥ Independent Agents. Answer: Sell the insurance products of several
companies and works for themselves or other agents
⩥ Exclusive or Captive Agents. Answer: Represent only one company
,⩥ General Agent. Answer: Works for one company, trains and supervises
other agents
⩥ Direct Writer. Answer: Salaried Employee
⩥ Direct Response. Answer: Conducted through the mail or media.
⩥ Franchise Marketing. Answer: Provides coverage to employees of
small firms or to members of associations
⩥ Non-Insurance Sponsors. Answer: The most common are banks and
credit card companies
⩥ Vending Machine. Answer: Usually sold in airports as travel accident
policies.
⩥ Insurer As Principal. Answer: The insurer is considered the principal
in the contract between the two parties
⩥ Agency. Answer: A group of persons working together to sell and
service insurance policies based on a contractual agreement with
insurance companies
⩥ Agency Agreement. Answer: The contract establishing the legal
relationship between the insurance agent/agency and the insurer. The
contract specifies the degree of authority given to the agency, the types
,of insurance the agency may write for the insurer, what commissions
will be paid, and the payment terms between the agency and insurer
⩥ Expressed Authority. Answer: In the agent's contract/in writing
⩥ Implied Authority. Answer: How the public views your authority with
an Insurer based on your actions
⩥ Apparent Authority. Answer: When the Home Office of the Insurer
also makes mistakes that they can be held responsible for in the event
there is a question of authority.
⩥ The insured. Answer: Makes an offer with a contract
⩥ The agent. Answer: has a fiduciary responsibility to act in the clients
best interest at all times.
⩥ Premium dollars. Answer: Offered as a consideration for the promise
the insurer to pay possible claims
⩥ Contract Of Adhesion. Answer: In insurance, the insurer writes the
contract and the insured "adheres" to it
⩥ Aleatory Contract. Answer: Insurance contracts are one-sided because
one party may receive much more in value than he or she gives in value
under the contract
, ⩥ Personal Contracts. Answer: insurance policies are generally these
type of contracts
⩥ Unilateral. Answer: An exchange of an act for a promise
⩥ Conditional Contracts. Answer: Insurance contracts are conditional
because when the loss occurs, certain conditions must be met to make
the contract legally enforceable.
⩥ Fraud. Answer: When the insured intends to deceive the insurance
company for financial gain.
⩥ Waiver. Answer: The voluntary relinquishment of a known right
⩥ Estoppel. Answer: Something is allowed to continue because all
defenses against it are stopped
⩥ Declarations Page (Dec. Page). Answer: Always the first page of the
policy. Explains the who, what, when, where, and why as it applies to
the policy.
⩥ Endorsements. Answer: Are used to change or modify a policy in
effect
DETAILED Q&A GRADED A+
⩥ Adverse Selection. Answer: the tendency for poor risks to seek and be
covered for insurance rather than an average risk in a group situation;
ex: a group of farmers presents a greater risk to an insurer than a group
of car salespeople.
⩥ Law of Large Numbers. Answer: allows an insurer to predict their
future losses in particular groups;
⩥ Domestic Insurer. Answer: An insurer that is incorporated under the
laws of the state in which it conducts business
⩥ Foreign Insurer. Answer: An insurer doing business in another state, in
which it is not incorporated
⩥ Alien. Answer: An insurer incorporated in a country other than the
United States.
⩥ Independent Agents. Answer: Sell the insurance products of several
companies and works for themselves or other agents
⩥ Exclusive or Captive Agents. Answer: Represent only one company
,⩥ General Agent. Answer: Works for one company, trains and supervises
other agents
⩥ Direct Writer. Answer: Salaried Employee
⩥ Direct Response. Answer: Conducted through the mail or media.
⩥ Franchise Marketing. Answer: Provides coverage to employees of
small firms or to members of associations
⩥ Non-Insurance Sponsors. Answer: The most common are banks and
credit card companies
⩥ Vending Machine. Answer: Usually sold in airports as travel accident
policies.
⩥ Insurer As Principal. Answer: The insurer is considered the principal
in the contract between the two parties
⩥ Agency. Answer: A group of persons working together to sell and
service insurance policies based on a contractual agreement with
insurance companies
⩥ Agency Agreement. Answer: The contract establishing the legal
relationship between the insurance agent/agency and the insurer. The
contract specifies the degree of authority given to the agency, the types
,of insurance the agency may write for the insurer, what commissions
will be paid, and the payment terms between the agency and insurer
⩥ Expressed Authority. Answer: In the agent's contract/in writing
⩥ Implied Authority. Answer: How the public views your authority with
an Insurer based on your actions
⩥ Apparent Authority. Answer: When the Home Office of the Insurer
also makes mistakes that they can be held responsible for in the event
there is a question of authority.
⩥ The insured. Answer: Makes an offer with a contract
⩥ The agent. Answer: has a fiduciary responsibility to act in the clients
best interest at all times.
⩥ Premium dollars. Answer: Offered as a consideration for the promise
the insurer to pay possible claims
⩥ Contract Of Adhesion. Answer: In insurance, the insurer writes the
contract and the insured "adheres" to it
⩥ Aleatory Contract. Answer: Insurance contracts are one-sided because
one party may receive much more in value than he or she gives in value
under the contract
, ⩥ Personal Contracts. Answer: insurance policies are generally these
type of contracts
⩥ Unilateral. Answer: An exchange of an act for a promise
⩥ Conditional Contracts. Answer: Insurance contracts are conditional
because when the loss occurs, certain conditions must be met to make
the contract legally enforceable.
⩥ Fraud. Answer: When the insured intends to deceive the insurance
company for financial gain.
⩥ Waiver. Answer: The voluntary relinquishment of a known right
⩥ Estoppel. Answer: Something is allowed to continue because all
defenses against it are stopped
⩥ Declarations Page (Dec. Page). Answer: Always the first page of the
policy. Explains the who, what, when, where, and why as it applies to
the policy.
⩥ Endorsements. Answer: Are used to change or modify a policy in
effect
