Personal Lines Terms and Definitions Questions
and Verified Answers
What is the function of underwritting? Correct Answer: To evaluate applications, select rating factors,
policy terms and conditions.
What are the three types of private insurers? Correct Answer: Stock, Mutual and Reciprocal.
What are the benefits of insurance? Correct Answer: Peace of mind and securing credit.
What does self-funding mean? Correct Answer: Retaining all or part of the risk.
What are the 4 types of marketing distribution? Correct Answer: Direct writing, direct email, exclusive
agents, and independent agencies.
What are the 5 investigative areas? Correct Answer: Personal Interviews, MIB, DMV, Financial Reports,
and Physician Statements.
What is an agent? Correct Answer: An agent works on behalf of a company for an insured.
What is a broker? Correct Answer: A broker works on behalf of the insured for a company.
What is a solicitor? Correct Answer: A solicitor works for an employer, selling insurance under an agent.
What is the roll of the MGA? Correct Answer: The MGA Works with agents and is appointed with many
companies.
What is the fire and casualty License? Correct Answer: Can transact Hazard insurance and Liability
policies including Health and Disability insurance.
What is the personal lines license? Correct Answer: Can transact all insurance except health, disability,
or commercial.
What is an adjuster? Correct Answer: An adjuster assits in settling claims either for a company or for an
insured.
What is the difference between a non-admitted and an admitted insurer? Correct Answer: A non-
admitted insurer is not authorized to transact business in Ca, except through a Surplus Lines Broker.
, What do the terms alien, foreign, and domestic mean in regards to insurance? Correct Answer: Alien
means organized under laws of another country. Foreign means another state. Domestic means inside
California.
What does a surplus lines broker do? Correct Answer: Only transacts for non-admitted insurers.
What does a special surplus lines broker do? Correct Answer: Transacts railroad, aircraft, shipowners, etc.
What is an inactive license? Correct Answer: No notice of appointment on file, but all fees and CE units
are up to date.
What does fiduciary mean? Correct Answer: Handles affairs and funds of others.
What does CIC and CCR stand for? Correct Answer: California Insurance Code, and California Code of
Regulations.
What are the 4 departments in an insurance company? Correct Answer: Marketing, Sales, Underwriting
and Actuarial.
What are the 5 types of insurance Companies? Correct Answer: Reciprocal, Mutual, Stock, Risk
Retention Group, and Lloyds.
What is the Commissioner? Correct Answer: An individual elected by the citizens to administer,
interpret, and enforce the CIC.
What does CSGA stand for? Correct Answer: California State Guaranty Association.
What are the 4 rating laws? Correct Answer: Prior approval, File & Use, Use & File, and Open
Competition.
What is the ISO? Correct Answer: The Insurance Service Office.
What is subrogation? Correct Answer: When an insured gives up the right to sue the 3rd party and the
insurance company does it for them.
What is arbitration? Correct Answer: When a mediator helps settle disputed claims.
What is the deductible? Correct Answer: The portion the insured pays before the company pays.
What are the 4 elements of a contract? Correct Answer: Offer and Acceptance, Competent Parties, Legal
Purpose, and Consideration.
and Verified Answers
What is the function of underwritting? Correct Answer: To evaluate applications, select rating factors,
policy terms and conditions.
What are the three types of private insurers? Correct Answer: Stock, Mutual and Reciprocal.
What are the benefits of insurance? Correct Answer: Peace of mind and securing credit.
What does self-funding mean? Correct Answer: Retaining all or part of the risk.
What are the 4 types of marketing distribution? Correct Answer: Direct writing, direct email, exclusive
agents, and independent agencies.
What are the 5 investigative areas? Correct Answer: Personal Interviews, MIB, DMV, Financial Reports,
and Physician Statements.
What is an agent? Correct Answer: An agent works on behalf of a company for an insured.
What is a broker? Correct Answer: A broker works on behalf of the insured for a company.
What is a solicitor? Correct Answer: A solicitor works for an employer, selling insurance under an agent.
What is the roll of the MGA? Correct Answer: The MGA Works with agents and is appointed with many
companies.
What is the fire and casualty License? Correct Answer: Can transact Hazard insurance and Liability
policies including Health and Disability insurance.
What is the personal lines license? Correct Answer: Can transact all insurance except health, disability,
or commercial.
What is an adjuster? Correct Answer: An adjuster assits in settling claims either for a company or for an
insured.
What is the difference between a non-admitted and an admitted insurer? Correct Answer: A non-
admitted insurer is not authorized to transact business in Ca, except through a Surplus Lines Broker.
, What do the terms alien, foreign, and domestic mean in regards to insurance? Correct Answer: Alien
means organized under laws of another country. Foreign means another state. Domestic means inside
California.
What does a surplus lines broker do? Correct Answer: Only transacts for non-admitted insurers.
What does a special surplus lines broker do? Correct Answer: Transacts railroad, aircraft, shipowners, etc.
What is an inactive license? Correct Answer: No notice of appointment on file, but all fees and CE units
are up to date.
What does fiduciary mean? Correct Answer: Handles affairs and funds of others.
What does CIC and CCR stand for? Correct Answer: California Insurance Code, and California Code of
Regulations.
What are the 4 departments in an insurance company? Correct Answer: Marketing, Sales, Underwriting
and Actuarial.
What are the 5 types of insurance Companies? Correct Answer: Reciprocal, Mutual, Stock, Risk
Retention Group, and Lloyds.
What is the Commissioner? Correct Answer: An individual elected by the citizens to administer,
interpret, and enforce the CIC.
What does CSGA stand for? Correct Answer: California State Guaranty Association.
What are the 4 rating laws? Correct Answer: Prior approval, File & Use, Use & File, and Open
Competition.
What is the ISO? Correct Answer: The Insurance Service Office.
What is subrogation? Correct Answer: When an insured gives up the right to sue the 3rd party and the
insurance company does it for them.
What is arbitration? Correct Answer: When a mediator helps settle disputed claims.
What is the deductible? Correct Answer: The portion the insured pays before the company pays.
What are the 4 elements of a contract? Correct Answer: Offer and Acceptance, Competent Parties, Legal
Purpose, and Consideration.
