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CA LIFE AND HEALTH INSURANCE TEST EXAM 3||
ACCURATE AND FREQUENTLY TESTED QUESTIONS
AND 100% CORRECT ANSWERS WITH RATIONALES||
LATEST AND COMPLETE UPDATE WITH EXPERT
VERIFIED SOLUTIONS|| SURE PASS!!
An agent who is acting as an insurance agent, broker, solicitor, life agent, accident
and health, or bail agent acts in which capacity when handling premiums or return
premiums for an insured? - ANSWER: Fiduciary
Which of the following statements regarding risk is TRUE? - ANSWER: Only
pure risks are insurable.
The purchase of an insurance policy may accomplish all of the following for the
insured EXCEPT - ANSWER: the elimination of risk.
Insureds are entitled to recover an amount NOT greater than the amount of their
loss under the principle of - ANSWER: indemnity.
What rule is used to determine the importance of a representation? - ANSWER:
The materiality of concealment.
The required contents of a policy include all of the following EXCEPT -
ANSWER: the probability of loss
All of the following are characteristics of reinsurance EXCEPT it - ANSWER:
increases the unearned premium reserve.
According to the California Insurance Code, an insurance policy must specify all
of the following EXCEPT the - ANSWER: financial rating of the insurer.
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All of the following qualify as "background information" as defined in Section
1729.2 of the California Insurance Code, EXCEPT - ANSWER: misdemeanor
charges filed, not resulting in a conviction.
Loss retention is an effective risk management technique when all of the following
conditions exist EXCEPT the - ANSWER: probability of loss is unknown.
A situation in which there is a possibility of loss or a gain is a - ANSWER:
speculative risk.
Why is having a large number of similar exposure units important to insurers? -
ANSWER: The greater the number insured, the more accurately the insurer can
predict losses and set appropriate premiums.
All of the following are benefits of insurance EXCEPT it - ANSWER: eliminates
fraudulent losses.
Who are members of the Medical information Bureau? - ANSWER: Life and
health insurers.
The process by which an insurer decides whether to issue requested insurance is
called - ANSWER: underwriting.
Unless it is merely a statement of an expectation or belief, a representation as to
the future is considered which of the following? - ANSWER: Promise
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Upon notification of a claim, a claimant must be given access to the California Fair
Claims Settlement Practices resolution by all of the following means EXCEPT -
ANSWER: by interview appointment with the agent of record.
As authorized by the California Insurance Code, the Insurance Commissioner has
provided standards for names used by life insurance agents. Under these standards
which, if any, of the following are automatically acceptable for Mary Brown, a
holder of the CLU designation? - ANSWER: Mary Brown Insurance Services.
When must insurance records of insurance agents and brokers be made available to
the Insurance Commissioner? - ANSWER: At all times.
Any situation that presents the possibility of a loss is known as - ANSWER: a loss
exposure
Which of the following information is not required to be communicated in a Life
insurance contract? - ANSWER: Personal judgment.
The direct distribution of insurance utilizes all of the following to promote the sale
of insurance EXCEPT - ANSWER: telephone call from an agent.
A contract in which one party promises to indemnify another against loss that
arises from an unknown event is - ANSWER: an insurance policy.
All of the occurrences listed below are examples of an insurable event as defined
by the California Insurance Code EXCEPT - ANSWER: an insured suffers a
financial loss in the state lottery
What is meant by referring to an insurance policy as a unilateral contract? -
ANSWER: Only one party makes a legally enforceable promise.
CA LIFE AND HEALTH INSURANCE TEST EXAM 3||
ACCURATE AND FREQUENTLY TESTED QUESTIONS
AND 100% CORRECT ANSWERS WITH RATIONALES||
LATEST AND COMPLETE UPDATE WITH EXPERT
VERIFIED SOLUTIONS|| SURE PASS!!
An agent who is acting as an insurance agent, broker, solicitor, life agent, accident
and health, or bail agent acts in which capacity when handling premiums or return
premiums for an insured? - ANSWER: Fiduciary
Which of the following statements regarding risk is TRUE? - ANSWER: Only
pure risks are insurable.
The purchase of an insurance policy may accomplish all of the following for the
insured EXCEPT - ANSWER: the elimination of risk.
Insureds are entitled to recover an amount NOT greater than the amount of their
loss under the principle of - ANSWER: indemnity.
What rule is used to determine the importance of a representation? - ANSWER:
The materiality of concealment.
The required contents of a policy include all of the following EXCEPT -
ANSWER: the probability of loss
All of the following are characteristics of reinsurance EXCEPT it - ANSWER:
increases the unearned premium reserve.
According to the California Insurance Code, an insurance policy must specify all
of the following EXCEPT the - ANSWER: financial rating of the insurer.
,2|Page
All of the following qualify as "background information" as defined in Section
1729.2 of the California Insurance Code, EXCEPT - ANSWER: misdemeanor
charges filed, not resulting in a conviction.
Loss retention is an effective risk management technique when all of the following
conditions exist EXCEPT the - ANSWER: probability of loss is unknown.
A situation in which there is a possibility of loss or a gain is a - ANSWER:
speculative risk.
Why is having a large number of similar exposure units important to insurers? -
ANSWER: The greater the number insured, the more accurately the insurer can
predict losses and set appropriate premiums.
All of the following are benefits of insurance EXCEPT it - ANSWER: eliminates
fraudulent losses.
Who are members of the Medical information Bureau? - ANSWER: Life and
health insurers.
The process by which an insurer decides whether to issue requested insurance is
called - ANSWER: underwriting.
Unless it is merely a statement of an expectation or belief, a representation as to
the future is considered which of the following? - ANSWER: Promise
, 3|Page
Upon notification of a claim, a claimant must be given access to the California Fair
Claims Settlement Practices resolution by all of the following means EXCEPT -
ANSWER: by interview appointment with the agent of record.
As authorized by the California Insurance Code, the Insurance Commissioner has
provided standards for names used by life insurance agents. Under these standards
which, if any, of the following are automatically acceptable for Mary Brown, a
holder of the CLU designation? - ANSWER: Mary Brown Insurance Services.
When must insurance records of insurance agents and brokers be made available to
the Insurance Commissioner? - ANSWER: At all times.
Any situation that presents the possibility of a loss is known as - ANSWER: a loss
exposure
Which of the following information is not required to be communicated in a Life
insurance contract? - ANSWER: Personal judgment.
The direct distribution of insurance utilizes all of the following to promote the sale
of insurance EXCEPT - ANSWER: telephone call from an agent.
A contract in which one party promises to indemnify another against loss that
arises from an unknown event is - ANSWER: an insurance policy.
All of the occurrences listed below are examples of an insurable event as defined
by the California Insurance Code EXCEPT - ANSWER: an insured suffers a
financial loss in the state lottery
What is meant by referring to an insurance policy as a unilateral contract? -
ANSWER: Only one party makes a legally enforceable promise.
