FLORIDA INSURANCE 2-14 EVALUATION EXAM 2025
QUESTIONS WITH ANSWERS GUARANTEE A+
✔✔Policy Replacement - ✔✔- An action which eliminates the original policy or
diminishes its benefits or values
✔✔Bad policy remplacement issues - ✔✔- Most the first year's premium is consumed
by the commission
- The premium is higher due to the insured's advanced age
- Waiting periods begin anew
✔✔Misuse of Premiums - ✔✔- Improper use of premiums collected by an insurance
producer
- Depositing a client's premium in own personal account
✔✔Rebating - ✔✔- Florida and California are the only two states that allow rebating
- When any part of commission or anything else of value is given to the insured as a
incentive to buy a policy
- Agent must keep copies of rebating schedules for five years
✔✔NAIC - ✔✔- National Association of Insurance Commissioners
- No legal power of its own
- Encourages uniformity in state insurance laws and regulations
✔✔Florida Insurance Guaranty Association - ✔✔- Funded by insurance companies
through assessments
-FIGA is part of a non-profit,
- Guaranty associations protect policyholders and claimants.
- Holds three separate accounts:
- Health Insurance
- Life Insurance
- Annuity Accounts
✔✔NAIFA - ✔✔- National Association of Insurance and Financial Advisors (NAIFA)
- Designed to protect agents
- Dedicated to supporting life insurance industry
✔✔A.M. Best Rating Agency - ✔✔- Profitability, leverage, & liquidity
- A++ to F and S (suspended)
✔✔Standard and Poors (S&P) Rating Agency - ✔✔- Claims and the ability to pay
- AAA to C to R
✔✔Moodys Investor Services Rating Agency - ✔✔- Financial strength
- Aaa to C
,✔✔Fitch IBCA (formerly Duff & Phelps) - ✔✔- Credit worthiness of securities
- AAA to CCC
✔✔Weiss Ratings, Inc. - ✔✔- Strength and safety of financial institutions and rates risk
adjusted mutual funds and stocks
- A to F
✔✔Elements of Contract - ✔✔Offer & Acceptance + Consideration + Legal Purpose +
Competent Parties = Legally Binding Contract
✔✔Offer & Acceptance - ✔✔Completed when a premium payment accompanies the
offer made by the proposed insured
✔✔Legal Purpose - ✔✔The policy owner must have an insurable interest in the insured
✔✔Competent - ✔✔Just like " innocent until proven guilty"
✔✔Aleatory - ✔✔(1) There is an element of chance for both parties
(2) The dollar values exchanged may not be equal
✔✔Adhesion - ✔✔The contract has been prepared by one party (the insurer), rather
than by negotiation between the contracting parties.
✔✔Unilateral - ✔✔Promise for Performance
✔✔Valued Contracts - ✔✔Pay a predetermined amount with no way to assess loss
✔✔Indemnity Contracts - ✔✔Pay the amount of the loss only (up to the policy limit)
✔✔STOLI - ✔✔- Stranger-Orignated Life Insurance
- Typically target seniors
-
✔✔Brokers - ✔✔-Florida does not issue separate licenses for brokers
- Cannot bind the contract
✔✔Agents - ✔✔- The acts of the agent are considered the acts of the company
- Can bind the contract
✔✔Entities involved in agency - ✔✔The agent
The insured
The insurance company
, ✔✔Express Authority - ✔✔The authority that an agent has in writing in the contract with
the insurer that the agent represent
✔✔Implied Authority - ✔✔Authority that is given not in writing but that is necessary for
the agent to transact insurance
✔✔Apparent Authority - ✔✔A third party is led to believe and that the agent is given due
to the agent's actions.
✔✔Waiver - ✔✔The voluntary giving up of a legal, given right.
✔✔Estoppel - ✔✔Simply means the legal enforcement of a waiver.
✔✔Parol Evidence Rule - ✔✔When parties put their agreement in writing, all previous
verbal statements come together in that writing, and a written contract cannot be
changed or modified.
✔✔Void Contract - ✔✔Fraud + Prior Knowledge
- Have two years from the date of the contract purchase to dispute the validity of a
contract
✔✔Voidable - ✔✔One of the parties has a legal reason to reject or cancel the contract
✔✔Categories of Life Insurance - ✔✔Ordinary
Industrial
Group
✔✔Ordinary Life Insurance - ✔✔- Term, Whole Life, Universal Life, Endowment
- The most common
✔✔Industrial Life Insurance - ✔✔- Sold by home service insurers
- Over the years has been used less
- Mainly, to cover funeral expense
✔✔Agent in charge - ✔✔A insurance agency must have one, but the agent does not
have any specific duties or responisbilities
✔✔Term Life Insurance - ✔✔- Most common. Policy premiums are based on mortality
and loading.
- Premiums stay level, and there are no cash values
✔✔Mortality - ✔✔The relative incidence of death within a group.
QUESTIONS WITH ANSWERS GUARANTEE A+
✔✔Policy Replacement - ✔✔- An action which eliminates the original policy or
diminishes its benefits or values
✔✔Bad policy remplacement issues - ✔✔- Most the first year's premium is consumed
by the commission
- The premium is higher due to the insured's advanced age
- Waiting periods begin anew
✔✔Misuse of Premiums - ✔✔- Improper use of premiums collected by an insurance
producer
- Depositing a client's premium in own personal account
✔✔Rebating - ✔✔- Florida and California are the only two states that allow rebating
- When any part of commission or anything else of value is given to the insured as a
incentive to buy a policy
- Agent must keep copies of rebating schedules for five years
✔✔NAIC - ✔✔- National Association of Insurance Commissioners
- No legal power of its own
- Encourages uniformity in state insurance laws and regulations
✔✔Florida Insurance Guaranty Association - ✔✔- Funded by insurance companies
through assessments
-FIGA is part of a non-profit,
- Guaranty associations protect policyholders and claimants.
- Holds three separate accounts:
- Health Insurance
- Life Insurance
- Annuity Accounts
✔✔NAIFA - ✔✔- National Association of Insurance and Financial Advisors (NAIFA)
- Designed to protect agents
- Dedicated to supporting life insurance industry
✔✔A.M. Best Rating Agency - ✔✔- Profitability, leverage, & liquidity
- A++ to F and S (suspended)
✔✔Standard and Poors (S&P) Rating Agency - ✔✔- Claims and the ability to pay
- AAA to C to R
✔✔Moodys Investor Services Rating Agency - ✔✔- Financial strength
- Aaa to C
,✔✔Fitch IBCA (formerly Duff & Phelps) - ✔✔- Credit worthiness of securities
- AAA to CCC
✔✔Weiss Ratings, Inc. - ✔✔- Strength and safety of financial institutions and rates risk
adjusted mutual funds and stocks
- A to F
✔✔Elements of Contract - ✔✔Offer & Acceptance + Consideration + Legal Purpose +
Competent Parties = Legally Binding Contract
✔✔Offer & Acceptance - ✔✔Completed when a premium payment accompanies the
offer made by the proposed insured
✔✔Legal Purpose - ✔✔The policy owner must have an insurable interest in the insured
✔✔Competent - ✔✔Just like " innocent until proven guilty"
✔✔Aleatory - ✔✔(1) There is an element of chance for both parties
(2) The dollar values exchanged may not be equal
✔✔Adhesion - ✔✔The contract has been prepared by one party (the insurer), rather
than by negotiation between the contracting parties.
✔✔Unilateral - ✔✔Promise for Performance
✔✔Valued Contracts - ✔✔Pay a predetermined amount with no way to assess loss
✔✔Indemnity Contracts - ✔✔Pay the amount of the loss only (up to the policy limit)
✔✔STOLI - ✔✔- Stranger-Orignated Life Insurance
- Typically target seniors
-
✔✔Brokers - ✔✔-Florida does not issue separate licenses for brokers
- Cannot bind the contract
✔✔Agents - ✔✔- The acts of the agent are considered the acts of the company
- Can bind the contract
✔✔Entities involved in agency - ✔✔The agent
The insured
The insurance company
, ✔✔Express Authority - ✔✔The authority that an agent has in writing in the contract with
the insurer that the agent represent
✔✔Implied Authority - ✔✔Authority that is given not in writing but that is necessary for
the agent to transact insurance
✔✔Apparent Authority - ✔✔A third party is led to believe and that the agent is given due
to the agent's actions.
✔✔Waiver - ✔✔The voluntary giving up of a legal, given right.
✔✔Estoppel - ✔✔Simply means the legal enforcement of a waiver.
✔✔Parol Evidence Rule - ✔✔When parties put their agreement in writing, all previous
verbal statements come together in that writing, and a written contract cannot be
changed or modified.
✔✔Void Contract - ✔✔Fraud + Prior Knowledge
- Have two years from the date of the contract purchase to dispute the validity of a
contract
✔✔Voidable - ✔✔One of the parties has a legal reason to reject or cancel the contract
✔✔Categories of Life Insurance - ✔✔Ordinary
Industrial
Group
✔✔Ordinary Life Insurance - ✔✔- Term, Whole Life, Universal Life, Endowment
- The most common
✔✔Industrial Life Insurance - ✔✔- Sold by home service insurers
- Over the years has been used less
- Mainly, to cover funeral expense
✔✔Agent in charge - ✔✔A insurance agency must have one, but the agent does not
have any specific duties or responisbilities
✔✔Term Life Insurance - ✔✔- Most common. Policy premiums are based on mortality
and loading.
- Premiums stay level, and there are no cash values
✔✔Mortality - ✔✔The relative incidence of death within a group.
