Lousiana Life,Health and Accident Insurance Licensing
Exam
1. Insurance: the transfer of Pure risk to the insurance company in consideration for a premium
must be pure risk and calculable.
2. Pure Risk: the chance of loss without any chance of gain; insurable
3. Speculative Risk: possibility for gain or loss; not insurable
4. Risk: Chance of loss
5. Exposure: a condition that could result in loss
6. hazard: something that increases the chance of loss
eg. presence of physical hazard increases the chance of a loss occurring
7. peril: cause of loss
eg. Fire
8. law of large number: 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
9. Reinsurance: 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.
10. stock insurer: may pay dividends to shareholders (stockholders), thought not guaranteed
11. reciprocal insurance company:
Answ managed by an attorney-in-fact; unincorporated association of individuals who
insure each other
12. government insurance offering: otters insurance for social needs (eg. flood
insurance, workers compensation), but doesn't otter to prevent fraud
13. foreign company: has their home oflce in another state
14. alien company: a insurer incorporated outside the US
15. producer liability: personally liable when violate producer's contract
,16. producer represenation: represent the insurance company, not the insured
17. independent producer: owns their own accounts, and are not insurance company
employees
18. producer authority:
expressed implied apparent
19. express authority of producer: authority of producer that is written in his or her
contract
20. implied authority of producer: authority not expressly (writtten) granted, but
actual authority producer has to transact normal business activities
21. Legal Elements of Contract:
Consideration Otter
Acceptance
Legal Purpose
Legal Capacity
22. Consideration Clause: something of value must be exchanged, though it does not
have to be equal;
policy can't be voided for unequal consideration
23. Offer: specific and definte proposal to enter into a contract
, 24. insurance contracts are: 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)
25. Principle of Indemnity: the purpose of insurance is to restore the insured to the same
position as before the loss occurred
26. Principle of Utmost Good Faith: all parties to an insurance transaction are
honest
27. Representation: the truth to the best of one's knowledge
28. Warranty: a sworn truth, guaranteed to be true, and if a breach of warranty is found, it could
potentially makes the contract voidable.
29. Concealment: the failure to disclose a material fact
30. Giving up the right to obtain information requires...: a waiver
31. Life Insurance Insurable Interest: must exist at the time of application, but not
necessarily at the tie of a claim
may be based on economics or family relationship
exists if someone would benefit if another person continues to live
32. Personal Uses of Life Insurance: - Provide a benefit to loved ones in case of
the policy owner's death
-Creates an immediate estate
-Estate Conversion
Exam
1. Insurance: the transfer of Pure risk to the insurance company in consideration for a premium
must be pure risk and calculable.
2. Pure Risk: the chance of loss without any chance of gain; insurable
3. Speculative Risk: possibility for gain or loss; not insurable
4. Risk: Chance of loss
5. Exposure: a condition that could result in loss
6. hazard: something that increases the chance of loss
eg. presence of physical hazard increases the chance of a loss occurring
7. peril: cause of loss
eg. Fire
8. law of large number: 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
9. Reinsurance: 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.
10. stock insurer: may pay dividends to shareholders (stockholders), thought not guaranteed
11. reciprocal insurance company:
Answ managed by an attorney-in-fact; unincorporated association of individuals who
insure each other
12. government insurance offering: otters insurance for social needs (eg. flood
insurance, workers compensation), but doesn't otter to prevent fraud
13. foreign company: has their home oflce in another state
14. alien company: a insurer incorporated outside the US
15. producer liability: personally liable when violate producer's contract
,16. producer represenation: represent the insurance company, not the insured
17. independent producer: owns their own accounts, and are not insurance company
employees
18. producer authority:
expressed implied apparent
19. express authority of producer: authority of producer that is written in his or her
contract
20. implied authority of producer: authority not expressly (writtten) granted, but
actual authority producer has to transact normal business activities
21. Legal Elements of Contract:
Consideration Otter
Acceptance
Legal Purpose
Legal Capacity
22. Consideration Clause: something of value must be exchanged, though it does not
have to be equal;
policy can't be voided for unequal consideration
23. Offer: specific and definte proposal to enter into a contract
, 24. insurance contracts are: 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)
25. Principle of Indemnity: the purpose of insurance is to restore the insured to the same
position as before the loss occurred
26. Principle of Utmost Good Faith: all parties to an insurance transaction are
honest
27. Representation: the truth to the best of one's knowledge
28. Warranty: a sworn truth, guaranteed to be true, and if a breach of warranty is found, it could
potentially makes the contract voidable.
29. Concealment: the failure to disclose a material fact
30. Giving up the right to obtain information requires...: a waiver
31. Life Insurance Insurable Interest: must exist at the time of application, but not
necessarily at the tie of a claim
may be based on economics or family relationship
exists if someone would benefit if another person continues to live
32. Personal Uses of Life Insurance: - Provide a benefit to loved ones in case of
the policy owner's death
-Creates an immediate estate
-Estate Conversion
