Washington State Insurance Exam| 122 Questions with 100% correct answers | verified

Apparent - is the appearance or assumption of authority based on the actions, words, or deeds of the principal or because of circumstances the principal created. Mutual Company - Owned by the policyowner and issue participating policies. Policy owners are entitled to dividends, which are a return of excess premiums and are therefore non-taxable. Dividends are not guaranteed. Sharing - A method of dealing with risk for a group of individual persons or businesses with the same or similar exposure to loss to share the losses that occur within that group. A RECIPROCAL insurance exchange is a form of risk-sharing arrangement. Retention - Is the planned assumption of risk by the insured through the use of deductibles, copayments, or self-insurance. It is also known as self-insurance when the insured accepts the responsibility for the loss before the insurance company pays. Express Authority - Is the AUTHORITY a principal intends to grant to an agent by means of the agent's contract. It is the authority that is written in the contract. Insurable Risk - In order to be characterized as a pure risk, the loss must be due to chance, definite, measurable, and predictable, but not catastrophic. Insurance Policy Conditions - Section of an insurance policy that indicates the general rules or procedures that the insurer and insured agree to follow under the terms of the policy. Examples: Inspection may be made as needed/ Changes to the policy must be made by insurer and be in writing/ Liberalization clause/ Return of premiums, which dictates methods used. Loss Costs Rating - Type of rating: Method developed by the insurance services office Inc. (ISO) that provides an insurer with that portion of a rate that does not include provisions of expenses or profit and are based on historical aggregate loss and loss adjustment expenses projected through development to their ultimate value and through trending to a future point in time.Strict Liability - Is commonly applied in product liability cases. The business is then liable for defective products, regardless of fault or negligence.