215 Insurance License Exam with
Accurate Solutions
risk pooling - ANSWER-spreading risk over a large group of people
law of large numbers - ANSWER-larger the group, the more certain the predictions
speculative risk - ANSWER-not insurable - involves both chance of loss or gain
pure risk - ANSWER-insurable - involves chance of loss, never gain or profit
peril - ANSWER-event causing loss
Ex: fire, death, accident, windstorm, disease
hazard - ANSWER-any factor that gives rise to peril or increase likelihood of a loss from
a peril
physical hazard - ANSWER-slippery floor, blindness, deafness, past medical history
fraternal benefit society - ANSWER-charitable, social, nonprofit, lodge system,
representative form of government whose membership is based on religion, nationality,
or ethnic lines; began on assessment bassi to help poorer members but now issues
insurance certificates and annuities similar to commercial insurers
home service insurers - ANSWER-industrial; small face amounts of insurance issued;
premiums collected weekly by selling agent
service provider - ANSWER-sell medical and hospital care services, not insurance
Ex: BCBS
hmo - ANSWER-fixed premium paid in advance; treatment from physicians and
hospitals contracted; known for stressing preventive care and early treatment
ppo - ANSWER-group (ex: employer or union) arranges discounts from select health
care providers
agent - ANSWER-represent insurance company
broker - ANSWER-represent client
paul v virginia - ANSWER-supreme court upheld rights of states to regulate insurance
, us v seua - ANSWER-shifted balance of regulatory control of insurance to federal
government
mccarran ferguson act - ANSWER-regulation of insurance by states in public's best
interest
fair credit reporting act - ANSWER-requires fair and accurate reporting of consumer
information
financial services modernization act - ANSWER-commercial and investment banks,
retail brokerages, and insurance companies can enter each other's lines of business
use patriot act - ANSWER-attempt to curtail money laundering and financing of
terrorism
domestic - ANSWER-incorporated within the state of florida
foreign - ANSWER-incorporated out of the state of florida
alien - ANSWER-incorporated in another country
accomplishments of naic - ANSWER-advertising code and unfair trade practices act
advertising code - ANSWER-stopped deceptive advertising and paid testimonies
unfair trade practices act - ANSWER-gives cfo power to investigate insurers and
producers, issue cease and desist orders, and impose penalties on violators
consideration - ANSWER-value given in exchange for promises sought
aleatory - ANSWER-dollar values exchanged may not be equal (premiums vs. benefits)
adhesion - ANSWER-contract drawn up by one party - no negotiations; take it or leave it
unilateral - ANSWER-only one party, the insurer, makes any enforceable promises
valued - ANSWER-pays stated sum
indemnity - ANSWER-pays amount equal to loss; attempts to make insured whole again
utmost good faith - ANSWER-no attempt to disguise or deceive
warranty - ANSWER-statements made by the applicant guaranteed to be true
representation - ANSWER-statements made by the applicant believed to be true
Accurate Solutions
risk pooling - ANSWER-spreading risk over a large group of people
law of large numbers - ANSWER-larger the group, the more certain the predictions
speculative risk - ANSWER-not insurable - involves both chance of loss or gain
pure risk - ANSWER-insurable - involves chance of loss, never gain or profit
peril - ANSWER-event causing loss
Ex: fire, death, accident, windstorm, disease
hazard - ANSWER-any factor that gives rise to peril or increase likelihood of a loss from
a peril
physical hazard - ANSWER-slippery floor, blindness, deafness, past medical history
fraternal benefit society - ANSWER-charitable, social, nonprofit, lodge system,
representative form of government whose membership is based on religion, nationality,
or ethnic lines; began on assessment bassi to help poorer members but now issues
insurance certificates and annuities similar to commercial insurers
home service insurers - ANSWER-industrial; small face amounts of insurance issued;
premiums collected weekly by selling agent
service provider - ANSWER-sell medical and hospital care services, not insurance
Ex: BCBS
hmo - ANSWER-fixed premium paid in advance; treatment from physicians and
hospitals contracted; known for stressing preventive care and early treatment
ppo - ANSWER-group (ex: employer or union) arranges discounts from select health
care providers
agent - ANSWER-represent insurance company
broker - ANSWER-represent client
paul v virginia - ANSWER-supreme court upheld rights of states to regulate insurance
, us v seua - ANSWER-shifted balance of regulatory control of insurance to federal
government
mccarran ferguson act - ANSWER-regulation of insurance by states in public's best
interest
fair credit reporting act - ANSWER-requires fair and accurate reporting of consumer
information
financial services modernization act - ANSWER-commercial and investment banks,
retail brokerages, and insurance companies can enter each other's lines of business
use patriot act - ANSWER-attempt to curtail money laundering and financing of
terrorism
domestic - ANSWER-incorporated within the state of florida
foreign - ANSWER-incorporated out of the state of florida
alien - ANSWER-incorporated in another country
accomplishments of naic - ANSWER-advertising code and unfair trade practices act
advertising code - ANSWER-stopped deceptive advertising and paid testimonies
unfair trade practices act - ANSWER-gives cfo power to investigate insurers and
producers, issue cease and desist orders, and impose penalties on violators
consideration - ANSWER-value given in exchange for promises sought
aleatory - ANSWER-dollar values exchanged may not be equal (premiums vs. benefits)
adhesion - ANSWER-contract drawn up by one party - no negotiations; take it or leave it
unilateral - ANSWER-only one party, the insurer, makes any enforceable promises
valued - ANSWER-pays stated sum
indemnity - ANSWER-pays amount equal to loss; attempts to make insured whole again
utmost good faith - ANSWER-no attempt to disguise or deceive
warranty - ANSWER-statements made by the applicant guaranteed to be true
representation - ANSWER-statements made by the applicant believed to be true
