California Life Accident and Health Insurance

California Life Accident and Health Insurance Exam
Practice
JOHN IS THE AGENT FOR ABC INSURANCE AND JANE IS THE INSURED. WHO IS
THE PRINCIPAL IN THIS AGENCY RELATIONSHIP?
A
ABC INSURANCE
B
JOHN
C
JANE
D
NONE - ANS-A
ABC INSURANCE

A(N) ________ INSURER IS AUTHORIZED TO WRITE INSURANCE POLICIES IN A
PARTICULAR STATE.
A
DOMESTIC
B
NON-ADMITTED
C
FOREIGN
D
ADMITTED - ANS-D
ADMITTED

WHICH OF THE FOLLOWING IS CLASSIFIED AS AN INSURANCE BROKER?
A
A PERSON WHO PLACES COVERAGE FOR HIS/HER OWN INSURANCE
B
A PERSON WHO NEGOTIATES INSURANCE CONTRACTS ON BEHALF OF AN
INSURED
C
A PERSON IN THE HOME OFFICE WHO DOES NOT SOLICIT OUTSIDE OF THE
OFFICE
D
AN EMPLOYEE WHO NEGOTIATES INSURANCE CONTRACTS FOR HIS/HER
EMPLOYER - ANS-B
A PERSON WHO NEGOTIATES INSURANCE CONTRACTS ON BEHALF OF AN
INSURED

THE INSURANCE CONTRACT IS SAID TO BE A CONTRACT OF UTMOST GOOD
FAITH, BECAUSE:
A

,CONCEALMENT OF KNOWN FACTS ON THE PART OF THE INSURED WILL VOID
THE CONTRACT
B
THE INSURER HAS DRAWN UP THE CONTRACT AND, THEREFORE, THERE IS
NO INTENT TO DECEIVE
C
EACH PARTY IS ENTITLED TO RELY UPON THE REPRESENTATIONS OF THE
OTHER THAT THERE IS NOTHING CONCEALED OR DISHONEST
D
THE INSURED MUST WARRANT THAT HIS/HER REPRESENTATIONS ARE TRUE -
ANS-C
EACH PARTY IS ENTITLED TO RELY UPON THE REPRESENTATIONS OF THE
OTHER THAT THERE IS NOTHING CONCEALED OR DISHONEST

WHICH OF THE FOLLOWING BEST DESCRIBES A CONTRACT OF INDEMNITY
UNDER INSURANCE?
A
THE INSURED IS RESTORED TO THE SAME FINANCIAL CONDITION AS PRIOR
TO THE LOSS, WITH NO INTENT OF LOSS OR GAIN
B
THE INSURED INDEMNIFIES THE INSURER FOR ANY EXPENSES IN ADJUSTING
THE LOSS
C
THE INSURED SUSTAINS A LOSS AS A RESULT OF THE LOSS - ANS-A
THE INSURED IS RESTORED TO THE SAME FINANCIAL CONDITION AS PRIOR
TO THE LOSS, WITH NO INTENT OF LOSS OR GAIN

THE INSURED IS RESTORED TO A FINANCIAL CONDITION AS GOOD AS, OR
BETTER THAN, THE INSURED WAS BEFORE THE LOSS
___________ INSURANCE IS USED TO PROVIDE COVERAGE WHEN INSURANCE
IS NOT AVAILABLE FROM AN ADMITTED CARRIER.
A
FACULTATIVE
B
DOMESTIC
C
ALIEN
D
SURPLUS - ANS-D
SURPLUS

WHICH OF THE FOLLOWING RISKS IS PROTECTED BY INSURANCE?
A
CERTAIN RISK
B
SPECULATIVE RISK

,C
PURE RISK
D
INVOLUNTARY RISK - ANS-C
PURE RISK

A GOOD EXAMPLE OF RISK REDUCTION MIGHT BE:
A
WHEN ONE TAKES ACTION TO MINIMIZE THE SEVERITY OF A POTENTIAL LOSS
B
THE ELIMINATION OF THE EXPOSURE TO A SPECIFIC RISK
C
THE TRANSFER OF THE RISK TO AN INSURANCE COMPANY
D
INSURING ONLY THOSE RISKS THAT THREATEN THE FINANCIAL STABILITY OF
THE INSURED - ANS-A
WHEN ONE TAKES ACTION TO MINIMIZE THE SEVERITY OF A POTENTIAL LOSS

AN INSURER THAT IS AUTHORIZED TO DO BUSINESS IN A PARTICULAR STATE
IS SAID TO BE:
A
NON-ADMITTED
B
ADMITTED
C
DOMESTIC
D
FOREIGN - ANS-B
ADMITTED

WHICH INSURER'S OWNER RECEIVES TAXABLE CORPORATE DIVIDENDS AS A
RETURN OF PROFIT?
A
MUTUAL
B
RECIPROCAL
C
STOCK
D
FRATERNAL - ANS-C
STOCK

IN INSURANCE, WHEN THE NUMBER OF SIMILAR UNITS INCREASE, THE
PREDICTABILITY OF THE LOSS IMPROVES:
A
BECAUSE OF THE SIMILARITY OF UNITS IN LARGE QUANTITIES

, B
ACCORDING TO THE LAW OF LARGE NUMBERS
C
BECAUSE OF ACCUMULATED EXPERIENCE
D
ACCORDING TO THE LAW OF AVERAGES - ANS-B
ACCORDING TO THE LAW OF LARGE NUMBERS

A CONTRACT WHEREBY ONLY ONE PARTY IS BOUND TO FUTURE
PERFORMANCE, IS SAID TO BE:
A
A UNILATERAL CONTRACT
B
A BILATERAL CONTRACT
C
A CONDITIONAL CONTRACT
D
AN ALEATORY CONTRACT - ANS-A
A UNILATERAL CONTRACT

THE CALIFORNIA FINANCIAL INFORMATION PRIVACY ACT IS SOMETIMES
KNOWN AS:
A
CAL-GLBA
B
CA-FIPA
C
CA-HIPAA
D
CA-FCRA - ANS-A
CAL-GLBA

IN CALIFORNIA, ANY PERSON THAT MANUFACTURES AND SELLS INSURANCE
COVERAGE BY WAY OF INSURANCE POLICIES OR CONTRACTS MAY BE AN:
A
INSURED
B
INSURER
C
AGENCY
D
AGENT - ANS-B
INSURER

IN THE INSURANCE WORLD, A POTENTIAL FOR A LOSS IS SAID TO BE:
A