XCEL. CHAPTER 3 EXAM 2025
QUESTIONS AND ANSWERS
Which of the following situations would an insurance agent need to guard against liability for
professional errors and omissions? - ANS making a recommendation to a potential insured to
replace existing coverage
insurable interest involves what assumption? - ANS one person benefits from another
persons continued life
an insurance company can be liable for a producers unauthorized acts - ANS when the
agency contract is unclear concerning the authority given
An insured is entitled to coverage under a policy that a prudent person would expect it to
provide. This principle is called - ANS reasonable expectations
which of these is true regarding the exchange of consideration among parties involved in an
insurance contract? - ANS can be unequal
an insurance companys failure to enforce a contracts provision is called an - ANS waiver
use of XYZ insurance company brochures, business cards, and rating guides is an example of -
ANS apparent authority
the powers directly given to a producer in an agency contract are called - ANS express
the following are all elements of a valid contract except - ANS written evidence
1 @COPYRIGHT THEBRIGHT 2025/2026
, which of the following would not have a restricted ability to enter into a contract? -
ANS small employer
which of these do not indicate the presence of insurance interest in a life insurance contract? -
ANS lifelong friendship
the insurers obligation to pay a claim depends on whether the insured or beneficiary has
complied with all policy conditions. This makes the policy a(n) - ANS conditional contract
what qualifies as acceptance of an insurance contract offer? - ANS an issued policy
an agreement is reached when an insurance contract is formed. Which of the following is not
considered to be an element of an agreement? - ANS equity
an insurance contract may be voided if a misrepresentation found on the application is
determined to be - ANS material
an arrangement where an individual is authorized to act on behalf of another person or
company is established through - ANS the law of agency
during the application process, a statement made by an applicant that becomes part of the
contract is considered to be a(n) - ANS warranty
an insurance application requires an applicant to make a full, accurate disclosure of the risk
factor involved. Using this criteria, an insurance policy is considered what type of contract? -
ANS contract of utmost good faith
an appointed producers implied authority is derived from - ANS express authority
2 @COPYRIGHT THEBRIGHT 2025/2026
QUESTIONS AND ANSWERS
Which of the following situations would an insurance agent need to guard against liability for
professional errors and omissions? - ANS making a recommendation to a potential insured to
replace existing coverage
insurable interest involves what assumption? - ANS one person benefits from another
persons continued life
an insurance company can be liable for a producers unauthorized acts - ANS when the
agency contract is unclear concerning the authority given
An insured is entitled to coverage under a policy that a prudent person would expect it to
provide. This principle is called - ANS reasonable expectations
which of these is true regarding the exchange of consideration among parties involved in an
insurance contract? - ANS can be unequal
an insurance companys failure to enforce a contracts provision is called an - ANS waiver
use of XYZ insurance company brochures, business cards, and rating guides is an example of -
ANS apparent authority
the powers directly given to a producer in an agency contract are called - ANS express
the following are all elements of a valid contract except - ANS written evidence
1 @COPYRIGHT THEBRIGHT 2025/2026
, which of the following would not have a restricted ability to enter into a contract? -
ANS small employer
which of these do not indicate the presence of insurance interest in a life insurance contract? -
ANS lifelong friendship
the insurers obligation to pay a claim depends on whether the insured or beneficiary has
complied with all policy conditions. This makes the policy a(n) - ANS conditional contract
what qualifies as acceptance of an insurance contract offer? - ANS an issued policy
an agreement is reached when an insurance contract is formed. Which of the following is not
considered to be an element of an agreement? - ANS equity
an insurance contract may be voided if a misrepresentation found on the application is
determined to be - ANS material
an arrangement where an individual is authorized to act on behalf of another person or
company is established through - ANS the law of agency
during the application process, a statement made by an applicant that becomes part of the
contract is considered to be a(n) - ANS warranty
an insurance application requires an applicant to make a full, accurate disclosure of the risk
factor involved. Using this criteria, an insurance policy is considered what type of contract? -
ANS contract of utmost good faith
an appointed producers implied authority is derived from - ANS express authority
2 @COPYRIGHT THEBRIGHT 2025/2026
