NY Independent Adjuster Exam
Dynamic Risk - answer Not insurable. Think COVID. Tech advances that might hurt
your business.
Static risk - answer100 year flood, rare genetic illness , doesn't really change through
time. Insurable
Pure risk - answer a risk that presents the chance of loss but no opportunity for gain
Speculative risk - answer a situation in which either profit or loss is possible, such as
investing in the stock market
Fundamental risk - answer risk that can affect many people at once (earthquake,
terrorism). If your policy covers it, insurable
Particular risk - answer insurable. risk that affects particular individuals (robbery,
vandalism)
Over insurance - answer insurance that exceeds in amount the actual value of the
person or property insured or insurance in a greater amount than the insured can afford
Morale hazard - answercarelessness or indifference to a loss because of the existence
of insurance
Reinsurance - answerWhen an insurance company buys insurance for some if the risks
for which it has issued coverage
Elements of a valid contract - answer1. Capacity to contract 2. Legal purpose. 3. Offer
and acceptance. 4. Consideration.
The conditions section of the policy contains: - answerDuties of insured and insurance
company
Insuring agreements of insurance policy - answerContains the insurer's promise to pay
in case of a loss.
Executory contract - answerAn insurance contract outlines the duties of both the insured
and the insurance company, and states that those duties must be performed, before the
contract will be fully "executed". This means the contract is "executory".
, Arbitration clause - answerA clause in a contract that provides that, in the event of a
dispute, the parties will submit the dispute to arbitration rather than litigate the dispute in
court.
Assignment - answerThe act of transferring to another all or part of one's rights arising
under a contract. Usually requires written consent of the insurance company.
Cancellation and nonrenewal - answerCancelled midTerm on short rate (penalty) or pro
rata (no penalty) basis. Nonrenewal is at end of policy period.
A deductible is aka - answerSelf-insured retention because insured pays for part of loss
Endorsement or rider - answerAdds, deletes or modifies policy provisions, located on
dec page
Liberalization clause - answerA policy condition providing that if a policy form is
broadened at no additional premium, the broadened coverage automatically applies to
all existing policies of the same type.
Insured gets homeowners policy but it is used for business. States not used for
business. - answerPolicy will be voided at inception because she made a material
misrepresentation on her application for insurance
a voided policy means - answernever really happened usually as a result of
misrepresentation such as telling a lie or partial truth
Public Law 15 - McCarran-Ferguson Act (1945) - answerInsurance should be regulated
by the states
The Commissioner does NOT have the power to - answerWrite insurance laws but does
enforce those laws ; does not set rates, only approves or disapproves of them
National Association of Insurance Commissioners - answerCreates and maintains
model laws that establish standards for hoe insurance is offered and delivered. No legis
powers.
Surplus Lines Insurance - answerInsurance obtained from nonadmitted insurers when
protection is not available from admitted insurers. Premium tax added.
Guaranty Association - answerEstablished by each state to support insurers and protect
consumers in the case of insurer insolvency, guaranty associations are funded by
insurers through assessments. Prohibit insurer from ad that they are part of assoc.
Foreign insurer - answerAn insurance company that is incorporated in another state.
Dynamic Risk - answer Not insurable. Think COVID. Tech advances that might hurt
your business.
Static risk - answer100 year flood, rare genetic illness , doesn't really change through
time. Insurable
Pure risk - answer a risk that presents the chance of loss but no opportunity for gain
Speculative risk - answer a situation in which either profit or loss is possible, such as
investing in the stock market
Fundamental risk - answer risk that can affect many people at once (earthquake,
terrorism). If your policy covers it, insurable
Particular risk - answer insurable. risk that affects particular individuals (robbery,
vandalism)
Over insurance - answer insurance that exceeds in amount the actual value of the
person or property insured or insurance in a greater amount than the insured can afford
Morale hazard - answercarelessness or indifference to a loss because of the existence
of insurance
Reinsurance - answerWhen an insurance company buys insurance for some if the risks
for which it has issued coverage
Elements of a valid contract - answer1. Capacity to contract 2. Legal purpose. 3. Offer
and acceptance. 4. Consideration.
The conditions section of the policy contains: - answerDuties of insured and insurance
company
Insuring agreements of insurance policy - answerContains the insurer's promise to pay
in case of a loss.
Executory contract - answerAn insurance contract outlines the duties of both the insured
and the insurance company, and states that those duties must be performed, before the
contract will be fully "executed". This means the contract is "executory".
, Arbitration clause - answerA clause in a contract that provides that, in the event of a
dispute, the parties will submit the dispute to arbitration rather than litigate the dispute in
court.
Assignment - answerThe act of transferring to another all or part of one's rights arising
under a contract. Usually requires written consent of the insurance company.
Cancellation and nonrenewal - answerCancelled midTerm on short rate (penalty) or pro
rata (no penalty) basis. Nonrenewal is at end of policy period.
A deductible is aka - answerSelf-insured retention because insured pays for part of loss
Endorsement or rider - answerAdds, deletes or modifies policy provisions, located on
dec page
Liberalization clause - answerA policy condition providing that if a policy form is
broadened at no additional premium, the broadened coverage automatically applies to
all existing policies of the same type.
Insured gets homeowners policy but it is used for business. States not used for
business. - answerPolicy will be voided at inception because she made a material
misrepresentation on her application for insurance
a voided policy means - answernever really happened usually as a result of
misrepresentation such as telling a lie or partial truth
Public Law 15 - McCarran-Ferguson Act (1945) - answerInsurance should be regulated
by the states
The Commissioner does NOT have the power to - answerWrite insurance laws but does
enforce those laws ; does not set rates, only approves or disapproves of them
National Association of Insurance Commissioners - answerCreates and maintains
model laws that establish standards for hoe insurance is offered and delivered. No legis
powers.
Surplus Lines Insurance - answerInsurance obtained from nonadmitted insurers when
protection is not available from admitted insurers. Premium tax added.
Guaranty Association - answerEstablished by each state to support insurers and protect
consumers in the case of insurer insolvency, guaranty associations are funded by
insurers through assessments. Prohibit insurer from ad that they are part of assoc.
Foreign insurer - answerAn insurance company that is incorporated in another state.
