Washington State Insurance Exam

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WASHINGTON STATE INSURANCE EXAM


Apparentvt-vtanswer--
isvtthevtappearancevtorvtassumptionvtofvtauthorityvtbasedvtonvtthevtactions,vtwords,vtorvtdeedsvtofvtthevtprincipalvtorvtbecau
vtofvtcircumstancesvtthevtprincipalvtcreated.



MutualvtCompanyvt-vtanswer--
Ownedvtbyvtthevtpolicyownervtandvtissuevtparticipatingvtpolicies.vtPolicyvtownersvtarevtentitledvttovtdividends,vtwhichvtare
returnvtofvtexcessvtpremiumsvtandvtarevtthereforevtnon-taxable.vtDividendsvtarevtnotvtguaranteed.

Sharingvt-vtanswer--
Avtmethodvtofvtdealingvtwithvtriskvtforvtavtgroupvtofvtindividualvtpersonsvtorvtbusinessesvtwithvtthevtsamevtorvtsimilarvtexposu
evttovtlossvttovtsharevtthevtlossesvtthatvtoccurvtwithinvtthatvtgroup.vtAvtRECIPROCALvtinsurancevtexchangevtisvtavtformvtofvt
k-sharingvtarrangement.

Retentionvt-vtanswer--Isvtthevtplannedvtassumptionvtofvtriskvtbyvtthevtinsuredvtthroughvtthevtusevtofvtdeductibles,vtco-
payments,vtorvtself-insurance.vtItvtisvtalsovtknownvtasvtself-
insurancevtwhenvtthevtinsuredvtacceptsvtthevtresponsibilityvtforvtthevtlossvtbeforevtthevtinsurancevtcompanyvtpays.

ExpressvtAuthorityvt-vtanswer--
IsvtthevtAUTHORITYvtavtprincipalvtintendsvttovtgrantvttovtanvtagentvtbyvtmeansvtofvtthevtagent'svtcontract.vtItvtisvtthevtauthori
thatvtisvtwrittenvtinvtthevtcontract.

InsurablevtRiskvt-vtanswer--
Invtordervttovtbevtcharacterizedvtasvtavtpurevtrisk,vtthevtlossvtmustvtbevtduevttovtchance,vtdefinite,vtmeasurable,vtandvtpredic
ble,vtbutvtnotvtcatastrophic.

InsurancevtPolicyvtConditionsvt-vtanswer--
Sectionvtofvtanvtinsurancevtpolicyvtthatvtindicatesvtthevtgeneralvtrulesvtorvtproceduresvtthatvtthevtinsurervtandvtinsuredvtagr
vttovtfollowvtundervtthevttermsvtofvtthevtpolicy.vtExamples:vtInspectionvtmayvtbevtmadevtasvtneeded/

vtChangesvttovtthevtpolicyvtmustvtbevtmadevtbyvtinsurervtandvtbevtinvtwriting/vtLiberalizationvtclause/

vtReturnvtofvtpremiums,vtwhichvtdictatesvtmethodsvtused.



LossvtCostsvtRatingvt-vtanswer--
Typevtofvtrating:vtMethodvtdevelopedvtbyvtthevtinsurancevtservicesvtofficevtInc.vt(ISO)vtthatvtprovidesvtanvtinsurervtwithvttha
portionvtofvtavtratevtthatvtdoesvtnotvtincludevtprovisionsvtofvtexpensesvtorvtprofitvtandvtarevtbasedvtonvthistoricalvtaggregate
ssvtandvtlossvtadjustmentvtexpensesvtprojectedvtthroughvtdevelopmentvttovttheirvtultimatevtvaluevtandvtthroughvttrending
vtavtfuturevtpointvtinvttime.



StrictvtLiabilityvt-vtanswer--
Isvtcommonlyvtappliedvtinvtproductvtliabilityvtcases.vtThevtbusinessvtisvtthenvtliablevtforvtdefectivevtproducts,vtregardlessvto
aultvtorvtnegligence.

InsuringvtAgreementvt-vtanswer--
Thevtpartvtofvtthevtpolicyvtstructurevtthatvtdescribesvtthevtinsuredvtperilsvtandvtthevtmethodvtofvtindemnification.

1vt/
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Conditionsvt-vtanswer--Statesvtthevtlegalvtobligationsvtandvtdutiesvtofvtthevtpartiesvttovtthevtcontract.

ValuedvtPolicyvt-vtanswer--
ProvidesvtforvtpaymentvtofvtthevtfullvtpolicyvtamountvtinvtthevteventvtofvtavttotalvtlossvtWITHOUTvtregardvttovtactualvtvaluevto
depreciation.

ContributoryvtNegligencevt-vtanswer--
Invtstatesvtthatvthavevtthis,vtthevtdefendantvtmustvthavevtbeenvt100%vtatvtfaultvtforvtanvtaccidentvtandvtthevtclaimantvtfreevto
aultvtifvtthevtclaimantvtisvttovtbevtsuccessfulvtinvtcollectingvtdamages.

AgreedvtValuevt-vtanswer--
Avtpropertyvtpolicyvtwithvtprovisionsvtagreedvtuponvtbyvtthevtinsurervtandvtinsuredvtasvttovtthevtamountsvtofvtinsurancevttha
epresentsvtavtfairvtvaluationvtforvtthevtpropertyvtatvtthevttimevtthevtinsurancevtisvtwritten.vtThevtamountvtisvtpaidvtinvtavtloss,vtr
gardlessvtofvtthevtinsuredvtproperty'svtappreciationvtorvtdepreciation.

Occurancevt-vtanswer--
Includesvtthosevtlossesvtcausedvtbyvtcontinuousvtorvtrepeatedvtexposurevttovtconditionsvtresultingvtinvtinjuryvtorvtdamage
vtpropertyvtthatvtisvtneithervtintendedvtnorvtexpected.



Consequentialvtlossvt-vtanswer--
Alsovtknownvtasvtanvtindirectvtloss,vtisvtavtsecondvtfinancialvtlossvtcausedvtbyvtavtcoveredvtdirectvtloss.

Nonconcurrencyvt-vtanswer--
Refersvttovtothervtinsurancevtwrittenvtonvtthevtsamevtrisk,vtbutvtnotvtonvtthevtsamevtcoveragevtbasis.

Negligencevt-vtanswer--Fourvtessentialvtelements:vtDuty,vtbreach,vtinjury,vtandvtunbrokenvtchain.

StatedvtAmountvt-vtanswer--
Thevtvaluevtofvtthevtinsuredvtpropertyvtisvtdeterminedvtatvtthevttimevtthevtpolicyvtisvtwritten.vtInvtthevteventvtofvtavtloss,vtthatvta
ountvtisvtpaidvtwithoutvtregardvttovtanyvtCOINSURANCEvtprovision.vtHowever,vtifvtthevtlossvtisvtlessvtthanvttotal,vtthevtinsur
thasvtsalvagevtrightsvtwithvtthevtinsuredvthavingvtfirstvtrightvtofvtrefusalvtofvtthevtsalvage.



PersonalvtPropertyvt-vtanswer--Propertyvtthatvtisvtmoveable

RealvtPropertyvt-vtanswer--Propertyvtthatvtisvtnon-moveable

Componentsvt-vtanswer--
Factorsvtthatvtdeterminevtrates,vtincludingvtlossvtreserves,vtlossvtadjustingvtexpenses,vtoperatingvtexpensesvtandvtprofits

ComparativevtNegligencevt-vtanswer--
Manyvtstates,vtbyvtstatute,vtrequirevtthatvtdamagevtbevtapportionedvtbasedvtuponvtthevtdegreevtofvtnegligencevtofvteachvtp
yvtinvtanvtaccident.

Assignmentvt-vtanswer--
Thevttransfervtofvtavtlegalvtrightvtorvtinterestvtinvtanvtinsurancevtpolicy.vtInvtpropertyvtandvtcasualtyvtinsurance,vtassignmen
ofvtpoliciesvtarevtusuallyvtvalidvtonlyvtwithvtthevtpriorvtwrittenvtconsentvtofvtthevtinsurer.vtExample:vttransferringvtavtpolicyvtto
vtfriendvtwhovtwillvtbevttakingvtovervtrentersvtinsurancevtwhenvtyouvtmovevtout.



AdditionalvtCoveragevt-vtanswer--
Providesvtanvtadditionalvtamountvtofvtcoveragevtforvtspecificvtlossvtexpense,vtatvtnovtadditionalvtpremium.

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