CALIFORNIA Life, Accident and Health Questions and Answers Graded A+

CALIFORNIA Life, Accident and Health Questions and Answers Graded A+ A moral hazard is a dishonest person (lacking in morals) A morale hazard a careless person. A peril is a cause of loss Pure risk is insurable & includes only a chance of loss. The highest premium would be found with a substandard risk classification. Agent commissions are an insurer expense "Insurance" is a contract that transfers risk from one party to another. An "insurance policy" is a written contract Neglect to communicate that which a party knows is "concealment" may cause the injured party to rescind the policy "Materiality" is determined solely by the probable and reasonable influence of the facts upon the part to whom the communication is due The "materiality of concealment" is the rule used to determine the importance of the misrepresentation. An insurance policy must specify the parties between whom the contract is made The financial rating of an insurer is not required to be included in the insurance policy In a direct response marketing system the mail and/or internet is used to sell policies, not agents An insurance broker is a person who for compensation and on behalf of another person, transacts insurance. An insurance agent is a person who for compensation, transacts insurance for the insurer. An insurance solicitor is a person employed by an insurance agent or broker to aid in insurance transactions A person can always use their legal name to transact insurance The state may disapprove the use of any true or fictitious name except a person's legal name An insurance agent or broker hires a third party to prepare their website The insurance agent or broker, not the third party, is responsible for the content of the website. An admitted insurer is an insurer entitled to transact business in this state A mutual insurer is owned by the policyholders and issues participating policies The Insurance Commissioner in California is elected by the people. The Insurance Commissioner may serve up to two (2) four-year terms A mutual insurer must pay out dividends at minimum annually. An insurance policy is a legal contract. A representation in an insurance contract is an implied warranty Concealment, whether intentional or unintentional, entitles the injured party to rescind an insurance contract. Agents of insurers who utilize "direct response" marketing systems do not conduct personal interviews with customers. Any person who transacts insurance without a valid license is guilty of