AFSB 151
AFSB 151 STUDY GUIDE QUIZZES AND
SOLUTIONS
fidelity bonds - bonds that historically have guaranteed the performance of
obligations that do not arise from contracts
performance bonds - a contract bond guaranteeing that a contractor's work will be
completed according to plans and specifications
payment bond - a contract bond guaranteeing that the project will be free of liens
public official bond - a commercial surety bond guaranteeing that a public official
will perform his or her duties faithfully and honestly
fiduciary bond - a court bond guaranteeing that person appointed by a court to
administer the property or interest of others will faithfully perform his or her duties
license and permit bonds - surety bonds that provide payment to the oblige (the
state, city, or other public entity) for loss or damage resulting from violations of the
duties and obligations imposed on the license or permit holder
producer - any of several kinds of insurance personnel who place insurance
business with insurers and who represent either insurers or insured, or both.
power of attorney - a written document that authorizes one person to act as another
person's agent or attorney-in-fact
AFSB 151
,AFSB 151
execution of bond - the establishment of the formal contract between the surety,
principal, and oblige that is offered to the principal
national associations of surety bond producers - an organization that educated the
general public, legislative bodies, contractor associations, and others about the
benefits of surety bonds
surety and fidelity association - an advisory organization of insurers engaged in
suretyship that represents its member companies in gathering and analyzing
statistical information, preparing regulatory filings and publications, and engaging
in representation in governmental affairs
contract of indemnity - a contract in which the insurer agrees, in the event of a
covered loss, to pay an mount directly related to the amount of the loss
bond penalty - the max amount the surety is obligated to pay for under a surety
bond
forfeiture bond - a classification of bonds that guarantee that the surety will pay the
entire bond penalty if the principal fails to complete the obligation
liquid asset - property that can be quickly and easily converted into cash
security interest - an interest in property that allows the property to be sold on
default to satisfy the debt for which the security interest was given
AFSB 151
, AFSB 151
real property - tangible property consisting of land, all structures permanently
attached to the land, and whatever is growing on the land
collateral agreement form - a document that provides the conditions for posting
and eventually returning collateral to the principal
legal remedy - the court of law's solutions for a dispute that awards damages to a
wronged party
equitable relief - a court ordered remedy form used in cases in which the plaintiff
seeks an injunction or specific performance from the defendant instead of
monetary damages
indemnification - the surety's common law right to compensation from the
principal after paying a claim
exoneration - the surety's right to require a principal to perform or post collateral
when a loss is imminent
subrogation - in a surety agreement, the substitution of one party for another whose
debt or performance the substituting party satisfies and that entitles the substituting
party to the rights that belongs to the defaulting party
reinsurance - the transfer of insurance risk from one insurer to another through a
contractual agreement under which one insurer agrees, in return for a reinsurance
premium to indemnify another insurer for some or all of the financial
consequences of certain loss exposures covered by the primary insurance policies
AFSB 151
AFSB 151 STUDY GUIDE QUIZZES AND
SOLUTIONS
fidelity bonds - bonds that historically have guaranteed the performance of
obligations that do not arise from contracts
performance bonds - a contract bond guaranteeing that a contractor's work will be
completed according to plans and specifications
payment bond - a contract bond guaranteeing that the project will be free of liens
public official bond - a commercial surety bond guaranteeing that a public official
will perform his or her duties faithfully and honestly
fiduciary bond - a court bond guaranteeing that person appointed by a court to
administer the property or interest of others will faithfully perform his or her duties
license and permit bonds - surety bonds that provide payment to the oblige (the
state, city, or other public entity) for loss or damage resulting from violations of the
duties and obligations imposed on the license or permit holder
producer - any of several kinds of insurance personnel who place insurance
business with insurers and who represent either insurers or insured, or both.
power of attorney - a written document that authorizes one person to act as another
person's agent or attorney-in-fact
AFSB 151
,AFSB 151
execution of bond - the establishment of the formal contract between the surety,
principal, and oblige that is offered to the principal
national associations of surety bond producers - an organization that educated the
general public, legislative bodies, contractor associations, and others about the
benefits of surety bonds
surety and fidelity association - an advisory organization of insurers engaged in
suretyship that represents its member companies in gathering and analyzing
statistical information, preparing regulatory filings and publications, and engaging
in representation in governmental affairs
contract of indemnity - a contract in which the insurer agrees, in the event of a
covered loss, to pay an mount directly related to the amount of the loss
bond penalty - the max amount the surety is obligated to pay for under a surety
bond
forfeiture bond - a classification of bonds that guarantee that the surety will pay the
entire bond penalty if the principal fails to complete the obligation
liquid asset - property that can be quickly and easily converted into cash
security interest - an interest in property that allows the property to be sold on
default to satisfy the debt for which the security interest was given
AFSB 151
, AFSB 151
real property - tangible property consisting of land, all structures permanently
attached to the land, and whatever is growing on the land
collateral agreement form - a document that provides the conditions for posting
and eventually returning collateral to the principal
legal remedy - the court of law's solutions for a dispute that awards damages to a
wronged party
equitable relief - a court ordered remedy form used in cases in which the plaintiff
seeks an injunction or specific performance from the defendant instead of
monetary damages
indemnification - the surety's common law right to compensation from the
principal after paying a claim
exoneration - the surety's right to require a principal to perform or post collateral
when a loss is imminent
subrogation - in a surety agreement, the substitution of one party for another whose
debt or performance the substituting party satisfies and that entitles the substituting
party to the rights that belongs to the defaulting party
reinsurance - the transfer of insurance risk from one insurer to another through a
contractual agreement under which one insurer agrees, in return for a reinsurance
premium to indemnify another insurer for some or all of the financial
consequences of certain loss exposures covered by the primary insurance policies
AFSB 151
