CA Life, Accident, & Health Practice
Exam (Latest ) Tested
Questions with Revised Answers, (A+
Guarantee)
Why would a large manufacturer choose to self-insure rather than buy an insurance policy from an
insurance company? - CORRECT ANSWERS to save insurance premiums by paying
relatively minor losses out of company funds
The federal Risk Retention Act of 1986 contains guidelines for which of the following entities? -
CORRECT ANSWERS Risk retention groups
Which of the following is an example of an unauthorized insurance company in Illinois? - CORRECT
ANSWERS Company B, an Iowa-based company that does not hold a certificate of
authority in Illinois and sells products that are not approved by the Illinois insurance department
Which insurance company function calculates company mortality and morbidity rates as well as
the dividends on participating life insurance policies? - CORRECT ANSWERS Actuarial
Division
The purpose for the Buyer's Guide, which must be given to every insurance prospect in the first
meeting with a producer, is to: - CORRECT ANSWERS explain the general features,
benefits, and conditions of the type of insurance being considered
The purpose for the Policy Summary, which must be given to every insurance applicant before an
application is signed, is to: - CORRECT ANSWERS provide buyers with details of the
specific insurance contract they are considering for purchase
The main purpose for errors and omissions insurance (E&O) is to: - CORRECT ANSWERS
cover damages that arise due to services a producer non-willfully failed to render
(does not protect against willful misconduct, and will not protect the producer who willfully
engages in an unfair trade practice)
Though not specifically cited in the producer's contract, the producer is expected to telephone
prospects on the insurer's behalf to arrange sales appointments. This is an example of what kind of
producer authority? - CORRECT ANSWERS implied authority
Jerry owns a life insurance policy with premiums payable directly to the insurer's home office.
However, for the past five years Jerry has sent his payments to his agent, who then forwards them
to the insurer. The insurer had accepted this arrangement but then tries to cancel Jerry's policy
when it learns he had died while the premium was being forwarded by the agent. The insurer will
probably not be able to cancel the policy in this case because of which of the following legal
principles?
,misrepresentation
waiver
estoppel
fraud - CORRECT ANSWERS estoppel
(In this case, the insurance company has allowed Jerry to send payments to his agent instead of
directly to the home office for more than five years. As a result, the insurer has given up its right to
have payments sent to the home office. The insurer is estopped from later asserting its right to
receive direct payment.)
An applicant for a $500,000 whole life insurance policy pays the initial premium along with his
application. In this case, what has the applicant done?
accepted an offer from the insurer
made a counteroffer to the insurer
accepted a counteroffer from the insurer
made an offer to the insurer - CORRECT ANSWERS made an offer to the insurer
Ambiguities in an insurance contract are most often interpreted in favor of the policyowner
because insurance contracts are:
unilateral
conditional
contracts of adhesion
aleatory - CORRECT ANSWERS contracts of adhesion
For a life insurance contract to be enforceable, which of the following parties must be legally
competent?
insurer
applicant, insurer, and beneficiary
applicant and insurer
applicant - CORRECT ANSWERS applicant and insurer
Specific to California, what does the term "twenty-four hour coverage" refer to?
-joint issue of a workers' compensation policy with non-occupational health insurance coverage
-a policy that is guaranteed to be issued within 24 hours of application
-coverage that applies to personal property, such as a home or automobile
-long-term care insurance - CORRECT ANSWERS joint issue of a workers' compensation
policy with non-occupational health insurance coverage
Which of the following entities regulates the business of insurance in California?
the National Association of Insurance Commissioners
the state government
the state and the federal governments
the federal government - CORRECT ANSWERS the state and federal governments
,(In addition to state authority, the business of insurance—to the extent it affects or is associated
with interstate commerce—is also regulated by the federal government under Title 18 of the U.S.
Code.)
In California, which of the following statements is correct regarding the state's insurance
Commissioner?
He or she is appointed by the Governor.
He or she is mainly an advocate for licensed insurance companies and their interests.
He or she serves terms of six years.
He or she is an elected official. - CORRECT ANSWERS He or she is an elected official
(The people of the state of California elect the Insurance Commissioner for four-year terms. He or
she is mainly an advocate for insurance consumers.)
In California, the state's Insurance Commissioner
serves terms of six years.
is mainly an advocate for licensed insurance companies and their interests.
is appointed by the Governor.
is an elected official. - CORRECT ANSWERS is an elected official
Which of the following best defines the main purpose of the California Department of Insurance?
to protect the interests of California insurance consumers
to set forth and pass insurance laws and regulations
to serve as an advocate for California insurance companies and insurance licensees
to serve as a lobbyist for the interests of California insurance companies and the insurance
business at the federal level - CORRECT ANSWERS to protect the interests of California
insurance consumers
(The main purpose of the California Department of Insurance is to serve as an advocate for
insurance consumers and to protect their needs and interests. It administers and enforces the laws
that the state legislature passes. Through its enforcement capabilities, the Department also
advances the interests of certified insurers and licensed producers; however, it does not actively
lobby for the industry at the federal level.)
In California, the insurance business is regulated by which of the following?
National Association of Insurance Commissioners
State and federal government
State government
Federal government - CORRECT ANSWERS State and federal government
(In addition to state authority, the business of insurance—to the extent it affects or is associated
with interstate commerce—is also regulated by the federal government under Title 18 of the U.S.
Code.)
, Being admitted to operate as an insurer and to transact one or more lines of insurance in California
is
automatically granted to any entity if it is admitted in at least one other state.
evidenced by a certificate of authority.
limited to entities organized as stock insurers.
restricted to organizations domiciled in California. - CORRECT ANSWERS evidenced by a
certificate of authority.
(Only those persons or entities that have been admitted to act as an insurer may transact
insurance business in California. Admission is secured by receiving a certificate of authority from
the California Commissioner of Insurance.)
The prohibition against and penalty for acting on behalf of a non-admitted insurer does not apply
to whom?
licensed solicitors
licensed life agents
licensed disability agents
licensed surplus lines brokers - CORRECT ANSWERS licensed surplus lines brokers
A primary insurer is the insurer that
is domiciled in California but is certified to transact insurance in other states.
accepts ceding business and assumes a part of another insurer's loss exposure.
writes only one line of coverage.
transfers its loss exposure to another insurer in a reinsurance transaction. - CORRECT ANSWERS
transfers its loss exposure to another insurer in a reinsurance transaction.
(A primary insurer is the insurer that transfers part of its liability or exposure to another insurer in
a reinsurance transaction.)
Which of the following statements is correct about authorization to act as an insurer in California?
Authority is limited to entities organized as stock insurers.
Authority is evidenced by a certificate of authority.
Only organizations domiciled in California can be authorized.
Authority is automatically granted to any entity if it is admitted in at least one other state. -
CORRECT ANSWERS Authority is evidenced by a certificate of authority.
Which of the following statements is correct regarding coverage for experimental medical
treatment in California?
Insurers can deny coverage.
Insurers must provide coverage in all cases.
Insurers must provide coverage to terminally ill insureds.
Exam (Latest ) Tested
Questions with Revised Answers, (A+
Guarantee)
Why would a large manufacturer choose to self-insure rather than buy an insurance policy from an
insurance company? - CORRECT ANSWERS to save insurance premiums by paying
relatively minor losses out of company funds
The federal Risk Retention Act of 1986 contains guidelines for which of the following entities? -
CORRECT ANSWERS Risk retention groups
Which of the following is an example of an unauthorized insurance company in Illinois? - CORRECT
ANSWERS Company B, an Iowa-based company that does not hold a certificate of
authority in Illinois and sells products that are not approved by the Illinois insurance department
Which insurance company function calculates company mortality and morbidity rates as well as
the dividends on participating life insurance policies? - CORRECT ANSWERS Actuarial
Division
The purpose for the Buyer's Guide, which must be given to every insurance prospect in the first
meeting with a producer, is to: - CORRECT ANSWERS explain the general features,
benefits, and conditions of the type of insurance being considered
The purpose for the Policy Summary, which must be given to every insurance applicant before an
application is signed, is to: - CORRECT ANSWERS provide buyers with details of the
specific insurance contract they are considering for purchase
The main purpose for errors and omissions insurance (E&O) is to: - CORRECT ANSWERS
cover damages that arise due to services a producer non-willfully failed to render
(does not protect against willful misconduct, and will not protect the producer who willfully
engages in an unfair trade practice)
Though not specifically cited in the producer's contract, the producer is expected to telephone
prospects on the insurer's behalf to arrange sales appointments. This is an example of what kind of
producer authority? - CORRECT ANSWERS implied authority
Jerry owns a life insurance policy with premiums payable directly to the insurer's home office.
However, for the past five years Jerry has sent his payments to his agent, who then forwards them
to the insurer. The insurer had accepted this arrangement but then tries to cancel Jerry's policy
when it learns he had died while the premium was being forwarded by the agent. The insurer will
probably not be able to cancel the policy in this case because of which of the following legal
principles?
,misrepresentation
waiver
estoppel
fraud - CORRECT ANSWERS estoppel
(In this case, the insurance company has allowed Jerry to send payments to his agent instead of
directly to the home office for more than five years. As a result, the insurer has given up its right to
have payments sent to the home office. The insurer is estopped from later asserting its right to
receive direct payment.)
An applicant for a $500,000 whole life insurance policy pays the initial premium along with his
application. In this case, what has the applicant done?
accepted an offer from the insurer
made a counteroffer to the insurer
accepted a counteroffer from the insurer
made an offer to the insurer - CORRECT ANSWERS made an offer to the insurer
Ambiguities in an insurance contract are most often interpreted in favor of the policyowner
because insurance contracts are:
unilateral
conditional
contracts of adhesion
aleatory - CORRECT ANSWERS contracts of adhesion
For a life insurance contract to be enforceable, which of the following parties must be legally
competent?
insurer
applicant, insurer, and beneficiary
applicant and insurer
applicant - CORRECT ANSWERS applicant and insurer
Specific to California, what does the term "twenty-four hour coverage" refer to?
-joint issue of a workers' compensation policy with non-occupational health insurance coverage
-a policy that is guaranteed to be issued within 24 hours of application
-coverage that applies to personal property, such as a home or automobile
-long-term care insurance - CORRECT ANSWERS joint issue of a workers' compensation
policy with non-occupational health insurance coverage
Which of the following entities regulates the business of insurance in California?
the National Association of Insurance Commissioners
the state government
the state and the federal governments
the federal government - CORRECT ANSWERS the state and federal governments
,(In addition to state authority, the business of insurance—to the extent it affects or is associated
with interstate commerce—is also regulated by the federal government under Title 18 of the U.S.
Code.)
In California, which of the following statements is correct regarding the state's insurance
Commissioner?
He or she is appointed by the Governor.
He or she is mainly an advocate for licensed insurance companies and their interests.
He or she serves terms of six years.
He or she is an elected official. - CORRECT ANSWERS He or she is an elected official
(The people of the state of California elect the Insurance Commissioner for four-year terms. He or
she is mainly an advocate for insurance consumers.)
In California, the state's Insurance Commissioner
serves terms of six years.
is mainly an advocate for licensed insurance companies and their interests.
is appointed by the Governor.
is an elected official. - CORRECT ANSWERS is an elected official
Which of the following best defines the main purpose of the California Department of Insurance?
to protect the interests of California insurance consumers
to set forth and pass insurance laws and regulations
to serve as an advocate for California insurance companies and insurance licensees
to serve as a lobbyist for the interests of California insurance companies and the insurance
business at the federal level - CORRECT ANSWERS to protect the interests of California
insurance consumers
(The main purpose of the California Department of Insurance is to serve as an advocate for
insurance consumers and to protect their needs and interests. It administers and enforces the laws
that the state legislature passes. Through its enforcement capabilities, the Department also
advances the interests of certified insurers and licensed producers; however, it does not actively
lobby for the industry at the federal level.)
In California, the insurance business is regulated by which of the following?
National Association of Insurance Commissioners
State and federal government
State government
Federal government - CORRECT ANSWERS State and federal government
(In addition to state authority, the business of insurance—to the extent it affects or is associated
with interstate commerce—is also regulated by the federal government under Title 18 of the U.S.
Code.)
, Being admitted to operate as an insurer and to transact one or more lines of insurance in California
is
automatically granted to any entity if it is admitted in at least one other state.
evidenced by a certificate of authority.
limited to entities organized as stock insurers.
restricted to organizations domiciled in California. - CORRECT ANSWERS evidenced by a
certificate of authority.
(Only those persons or entities that have been admitted to act as an insurer may transact
insurance business in California. Admission is secured by receiving a certificate of authority from
the California Commissioner of Insurance.)
The prohibition against and penalty for acting on behalf of a non-admitted insurer does not apply
to whom?
licensed solicitors
licensed life agents
licensed disability agents
licensed surplus lines brokers - CORRECT ANSWERS licensed surplus lines brokers
A primary insurer is the insurer that
is domiciled in California but is certified to transact insurance in other states.
accepts ceding business and assumes a part of another insurer's loss exposure.
writes only one line of coverage.
transfers its loss exposure to another insurer in a reinsurance transaction. - CORRECT ANSWERS
transfers its loss exposure to another insurer in a reinsurance transaction.
(A primary insurer is the insurer that transfers part of its liability or exposure to another insurer in
a reinsurance transaction.)
Which of the following statements is correct about authorization to act as an insurer in California?
Authority is limited to entities organized as stock insurers.
Authority is evidenced by a certificate of authority.
Only organizations domiciled in California can be authorized.
Authority is automatically granted to any entity if it is admitted in at least one other state. -
CORRECT ANSWERS Authority is evidenced by a certificate of authority.
Which of the following statements is correct regarding coverage for experimental medical
treatment in California?
Insurers can deny coverage.
Insurers must provide coverage in all cases.
Insurers must provide coverage to terminally ill insureds.
