Ohio Personal Lines (Insurance Exam)
UPDATED Actual Exam Questions and
CORRECT Answers
Stock Insurance Company - CORRECT ANSWER✔✔- Issues non-participating policies and
is owned by stockholders who received taxable corporate dividends as a return profit
Reinsurance - CORRECT ANSWER✔✔- The transfer of risk between insurance companies.
The reinsurer assumes some or all of the risks of the ceding, or primary, insurance company
Domestic - CORRECT ANSWER✔✔- Insurer organized under the laws of the resident state
Foreign - CORRECT ANSWER✔✔- Insurer organized under the laws of another state
within the United States
Alien - CORRECT ANSWER✔✔- Insurer oganized under the laws of a country outside of
the United States
Domicile - CORRECT ANSWER✔✔- Refers to the state in which an insurer is incorporated
Express - CORRECT ANSWER✔✔- Authority that is written into the producers agency
contract
Implied - CORRECT ANSWER✔✔- Authority that in which the public and the insurer
assumes the agent possesses
Apparent - CORRECT ANSWER✔✔- Authority created when the agent exceeds express
authority and the insurer does not respond
FCRA - CORRECT ANSWER✔✔- Protects consumer privacy by ensuring that any data
collected by an insurer remains confidential, and is accurate, relevant, and used for a proper
and specific purpose
,Risk - CORRECT ANSWER✔✔- The uncertainty of a loss
Peril - CORRECT ANSWER✔✔- The cause of a loss
Hazard - CORRECT ANSWER✔✔- Increases the possibility of a loss
Indemnity - CORRECT ANSWER✔✔- Does not allow the insured to profit from a loss;
instead, it restores the insured to the same financial or economic condition the existed prior to
loss
Adhesion - CORRECT ANSWER✔✔- One party (the insurer) prepares the contract and
presents it to the second party (the insured), who must accept it on a "take-it-or-leave-it" basis
Types Of Insurers - CORRECT ANSWER✔✔- Stock Insurers, Mutual Insurers, Reciprocal
Insurers, and Self-Insurer
Reduction - CORRECT ANSWER✔✔- Minimizing the chance of a loss without eliminating
the risk altogether
Retention - CORRECT ANSWER✔✔- Assuming responsibility for a loss
Conditional - CORRECT ANSWER✔✔- A contract that requires that both parties perform
certain duties
Acutuary - CORRECT ANSWER✔✔- Determines the probability of loss and sets premium
rates
Physical - CORRECT ANSWER✔✔- A hazard that occurs when a physical condition
increases the probability of loss; use, condition, or occupancy of property
, Moral - CORRECT ANSWER✔✔- A hazard that occurs when dishonest tendencies increase
the probability of a loss; certain characteristics and behaviors of people
Morale - CORRECT ANSWER✔✔- A hazard that occurs when a persons attitude increases
the probability of a loss
Speculative Risk - CORRECT ANSWER✔✔- Situations where there is a chance or
possibility for loss, no loss or gain
Pure Risk - CORRECT ANSWER✔✔- Situations where there is no chance for gain, only
loss. The only risk that can be insured
Misreprensentation - CORRECT ANSWER✔✔- False statement contained in the insured's
application and does not usually void coverage or the policy
Fraud - CORRECT ANSWER✔✔- An intentional deception of the truth in order to induce
another party with something of value or to surrender a legal right
Concealment - CORRECT ANSWER✔✔- The willful holding back or secretion of material
facts pertinent to the issuance of insurance or claim
Reinsurance - CORRECT ANSWER✔✔- A contract between the insuring company and the
reinsurer, and does not involve the insured
Underwriter - CORRECT ANSWER✔✔- Responsible for the selection of risks and rating
that determines actual policy premium
Underwriting - CORRECT ANSWER✔✔- The process of selecting, classifying, and rating a
risk for the purpose of insurance coverage
Waiver - CORRECT ANSWER✔✔- Voluntary surrender of a known right, claim or privilege
UPDATED Actual Exam Questions and
CORRECT Answers
Stock Insurance Company - CORRECT ANSWER✔✔- Issues non-participating policies and
is owned by stockholders who received taxable corporate dividends as a return profit
Reinsurance - CORRECT ANSWER✔✔- The transfer of risk between insurance companies.
The reinsurer assumes some or all of the risks of the ceding, or primary, insurance company
Domestic - CORRECT ANSWER✔✔- Insurer organized under the laws of the resident state
Foreign - CORRECT ANSWER✔✔- Insurer organized under the laws of another state
within the United States
Alien - CORRECT ANSWER✔✔- Insurer oganized under the laws of a country outside of
the United States
Domicile - CORRECT ANSWER✔✔- Refers to the state in which an insurer is incorporated
Express - CORRECT ANSWER✔✔- Authority that is written into the producers agency
contract
Implied - CORRECT ANSWER✔✔- Authority that in which the public and the insurer
assumes the agent possesses
Apparent - CORRECT ANSWER✔✔- Authority created when the agent exceeds express
authority and the insurer does not respond
FCRA - CORRECT ANSWER✔✔- Protects consumer privacy by ensuring that any data
collected by an insurer remains confidential, and is accurate, relevant, and used for a proper
and specific purpose
,Risk - CORRECT ANSWER✔✔- The uncertainty of a loss
Peril - CORRECT ANSWER✔✔- The cause of a loss
Hazard - CORRECT ANSWER✔✔- Increases the possibility of a loss
Indemnity - CORRECT ANSWER✔✔- Does not allow the insured to profit from a loss;
instead, it restores the insured to the same financial or economic condition the existed prior to
loss
Adhesion - CORRECT ANSWER✔✔- One party (the insurer) prepares the contract and
presents it to the second party (the insured), who must accept it on a "take-it-or-leave-it" basis
Types Of Insurers - CORRECT ANSWER✔✔- Stock Insurers, Mutual Insurers, Reciprocal
Insurers, and Self-Insurer
Reduction - CORRECT ANSWER✔✔- Minimizing the chance of a loss without eliminating
the risk altogether
Retention - CORRECT ANSWER✔✔- Assuming responsibility for a loss
Conditional - CORRECT ANSWER✔✔- A contract that requires that both parties perform
certain duties
Acutuary - CORRECT ANSWER✔✔- Determines the probability of loss and sets premium
rates
Physical - CORRECT ANSWER✔✔- A hazard that occurs when a physical condition
increases the probability of loss; use, condition, or occupancy of property
, Moral - CORRECT ANSWER✔✔- A hazard that occurs when dishonest tendencies increase
the probability of a loss; certain characteristics and behaviors of people
Morale - CORRECT ANSWER✔✔- A hazard that occurs when a persons attitude increases
the probability of a loss
Speculative Risk - CORRECT ANSWER✔✔- Situations where there is a chance or
possibility for loss, no loss or gain
Pure Risk - CORRECT ANSWER✔✔- Situations where there is no chance for gain, only
loss. The only risk that can be insured
Misreprensentation - CORRECT ANSWER✔✔- False statement contained in the insured's
application and does not usually void coverage or the policy
Fraud - CORRECT ANSWER✔✔- An intentional deception of the truth in order to induce
another party with something of value or to surrender a legal right
Concealment - CORRECT ANSWER✔✔- The willful holding back or secretion of material
facts pertinent to the issuance of insurance or claim
Reinsurance - CORRECT ANSWER✔✔- A contract between the insuring company and the
reinsurer, and does not involve the insured
Underwriter - CORRECT ANSWER✔✔- Responsible for the selection of risks and rating
that determines actual policy premium
Underwriting - CORRECT ANSWER✔✔- The process of selecting, classifying, and rating a
risk for the purpose of insurance coverage
Waiver - CORRECT ANSWER✔✔- Voluntary surrender of a known right, claim or privilege
