PROPERTY & CASUALTY ADBANKER MULTIPLE
CHOICE QUESTIONS
Which of the following is NOT contained in the Conditions section of an insurance
policy?
b)a)ExclusionsAppraisal
c)Changes
d)Assignment - Answers -
The insured's duties after a loss include all the following, except:
a)Notify police in the event of a theft
c)Prb)Have property repaired quickly, then notify insurerepare an inventory of damaged
property
d)Give prompt written notice to the insurer - Answers -
All of the following are true of mutual companies, except:
a) Profits are returned to the policyholders
b) They are owned by the stockholders
c) They are normally written non-assessable
d) When they become a stock company, it is called Demutualization - Answers - b -
*Mutual companies are not owned by the stockholders
When one takes action to minimize the severity of a potential loss, he/she is practicing:
a) Risk acceptance
b) Risk avoidance
c) Risk transfer
d) Risk reduction - Answers - d - risk reduction is taking action to minimize the severity
of a potential loss.
The extent to which one may be affected by a peril is known as:
a) Hazard
b) Loss exposure
c) Risk
d) Adverse selection - Answers - b - loss exposure is the extent to which one may be
affected by a peril.
The insuring of risks that are more prone to loss than average (standard) risks is known
as:
a) Preferred selection
b) Detrimental selection
,c) Qualitative selection
d) Adverse selection - Answers - d - adverse selection is the insuring of risks that are
more prone to loss than average/standard risks.
An insurer's failure to enforce a provision in an insurance contract is called:
a)Estoppel
b)Waiver
c)Warranty
d)Independent - Answers - b)Waiver
To determine acceptable risks is the primary function of :
a)The agent
b)The reinsurer
c)The actuary
d)The underwriter - Answers - d)The underwriter
A loss that occurs as a consequence of direct damage to property is known as:
a)A second loss
b)An indirect loss
c)A direct loss
d)A non-concurrent loss - Answers - b)An indirect loss
A policy that pays the full cost to replace or repair damage to property without any
adjustment for depreciation is called:
a)A depreciated policy
b)A replacement value policy
c)A valued policy
d)A direct loss policy - Answers - b)A replacement value policy
When a policy pays for the cost to repair or replace damaged property at its current
value less depreciation, the loss settlement is on what basis?
a)Stated value
b)Scheduled value
c)Actual cash value
d)Pro-rata - Answers - c)Actual cash value
A policy insures two types of property on one policy and each is insured for a different
limit. The policy is written on what basis?
a)Blanket limit
b)Scheduled limit
, c)Specific limit
d)Conditional limit - Answers - b)Scheduled limit
The Declarations includes all of the following information, except:
a)The named insured
b)The deductible
c)Duties after a loss
d)The policy effective date - Answers - c)Duties after a loss
Which of the following is true regarding a stock company?
a) Each member is known as a subscriber
b) Their profits are returned to the policyholders
c) The stockholders may receive taxable dividends
d) They do not use underwriters - Answers - c - The stockholders may receive taxable
dividends from a stock company
The following are all considered a form of domiciles for insurers, except:
a - Alien
b - Foreign
c - Admitted
d - Domestic - Answers - C - admitted insurers are not considered a form of domicile
When an insurance company becomes licensed to do business in this state, it is
considered which of the following?
a) Domestic
b) Admitted
c) Allowed
d) Facultative - Answers - b - admitted
Which of the following is false regarding an insurance producer?
a) They have fiduciary duty to the insurer when handling premium funds
b)They are required to emphasize profitable policies
c)When they exceed the authority given in their agency contract they can be personally
liable
d) They must report any material facts that may affect the underwriting of a policy -
Answers - b - Insurance producers are NOT required to emphasize profitable policies
The address and legal description of insured property are found in the:
CHOICE QUESTIONS
Which of the following is NOT contained in the Conditions section of an insurance
policy?
b)a)ExclusionsAppraisal
c)Changes
d)Assignment - Answers -
The insured's duties after a loss include all the following, except:
a)Notify police in the event of a theft
c)Prb)Have property repaired quickly, then notify insurerepare an inventory of damaged
property
d)Give prompt written notice to the insurer - Answers -
All of the following are true of mutual companies, except:
a) Profits are returned to the policyholders
b) They are owned by the stockholders
c) They are normally written non-assessable
d) When they become a stock company, it is called Demutualization - Answers - b -
*Mutual companies are not owned by the stockholders
When one takes action to minimize the severity of a potential loss, he/she is practicing:
a) Risk acceptance
b) Risk avoidance
c) Risk transfer
d) Risk reduction - Answers - d - risk reduction is taking action to minimize the severity
of a potential loss.
The extent to which one may be affected by a peril is known as:
a) Hazard
b) Loss exposure
c) Risk
d) Adverse selection - Answers - b - loss exposure is the extent to which one may be
affected by a peril.
The insuring of risks that are more prone to loss than average (standard) risks is known
as:
a) Preferred selection
b) Detrimental selection
,c) Qualitative selection
d) Adverse selection - Answers - d - adverse selection is the insuring of risks that are
more prone to loss than average/standard risks.
An insurer's failure to enforce a provision in an insurance contract is called:
a)Estoppel
b)Waiver
c)Warranty
d)Independent - Answers - b)Waiver
To determine acceptable risks is the primary function of :
a)The agent
b)The reinsurer
c)The actuary
d)The underwriter - Answers - d)The underwriter
A loss that occurs as a consequence of direct damage to property is known as:
a)A second loss
b)An indirect loss
c)A direct loss
d)A non-concurrent loss - Answers - b)An indirect loss
A policy that pays the full cost to replace or repair damage to property without any
adjustment for depreciation is called:
a)A depreciated policy
b)A replacement value policy
c)A valued policy
d)A direct loss policy - Answers - b)A replacement value policy
When a policy pays for the cost to repair or replace damaged property at its current
value less depreciation, the loss settlement is on what basis?
a)Stated value
b)Scheduled value
c)Actual cash value
d)Pro-rata - Answers - c)Actual cash value
A policy insures two types of property on one policy and each is insured for a different
limit. The policy is written on what basis?
a)Blanket limit
b)Scheduled limit
, c)Specific limit
d)Conditional limit - Answers - b)Scheduled limit
The Declarations includes all of the following information, except:
a)The named insured
b)The deductible
c)Duties after a loss
d)The policy effective date - Answers - c)Duties after a loss
Which of the following is true regarding a stock company?
a) Each member is known as a subscriber
b) Their profits are returned to the policyholders
c) The stockholders may receive taxable dividends
d) They do not use underwriters - Answers - c - The stockholders may receive taxable
dividends from a stock company
The following are all considered a form of domiciles for insurers, except:
a - Alien
b - Foreign
c - Admitted
d - Domestic - Answers - C - admitted insurers are not considered a form of domicile
When an insurance company becomes licensed to do business in this state, it is
considered which of the following?
a) Domestic
b) Admitted
c) Allowed
d) Facultative - Answers - b - admitted
Which of the following is false regarding an insurance producer?
a) They have fiduciary duty to the insurer when handling premium funds
b)They are required to emphasize profitable policies
c)When they exceed the authority given in their agency contract they can be personally
liable
d) They must report any material facts that may affect the underwriting of a policy -
Answers - b - Insurance producers are NOT required to emphasize profitable policies
The address and legal description of insured property are found in the:
