Insurance MCQ

Larry owns an insurance contract issued by the ABC company that contains words and phrases that are ambiguous to Larry. If ABC challenges a claim based on these phrases they will lose because an insurance contract is deemed to be a contract of: A Indemnity B Reasonable expectations C Adhesion D Utmost good faith Answer: C

Which of the following statements is true? A Insurer X rates the insured based on health reasons. X accepted an offer and the policy is in effect B Q completes an application and submits it to the insurer. Q made an offer C Q completes an application and submits it with premium to the insurer. Q made an offer D Insurer X issues a policy with an outstanding premium requirement. X accepted an offer and the policy is in effect Answer: C

_______ refers to the jurisdiction where an insurer was formed or incorporated. A Authorized B Admitted C Domicile D Approved Answer: C

Which of the following is NOT considered one of the essential elements of a contract? A Competent Parties B Offer and Acceptance C Legal Purpose D Conditions Answer: D

A contract that is drafted by an insurer and receives no input or alteration from the insured, is considered a(n): A Aleatory Contract B Unilateral Contract C Contract of Adhesion D Conditional Contract Answer: C

This organization is licensed in one state and may insure members in other states consisting of a large number of similar units with similar risk exposures such as theme parks, go-cart tracks, or water slides is known as a(n) _________. A Reciprocal Insurance Company B Fraternal Benefit Association C Risk Retention Group D Lloyd's of London Association Answer: C

The State's __________ branch enforces the existing statutes that have been put in place. A Judicial B Electoral C Executive D Legislative Answer: C

With health and life insurance a/an _________ is required at the time of the application. A Indemnity interest B Beneficiary status C Insurable interest D Ownership right Answer: C

Statements made on the application by the applicant that are believed to be true to the best of his/her knowledge are: A Warranties B Representations C Waivers D Conditions Answer: B

Under the Fair Credit Reporting Act, which of the following statements is correct? A The Act is designed to protect reporting agencies from the public B The reporting company can provide confidential information to anyone requesting it C The reporting agency has no responsibility to investigate inaccurate information D If an individual is denied coverage, they can request a copy of the report Answer: D

A statement that a person makes and guarantees to be true is a: A Warranty B Representation C Closely held belief D Fact Answer: A

Dividends issued by Stock insurers are paid to: A Service providers B Agencies C Policyholders D Stockholders Answer: D

A false statement in the application that can render the contract void, if material to the acceptance of the risk, is known as a: A Condition B Misrepresentation C Concealment D Fraud Answer: B

An applicant completes the application and submits it to the insurer along with a premium check. When is the applicant's offer considered accepted? A Only after the policyowner completes any required medical exams B When the insurer issues a policy C Upon cashing the premium check D When the application and premium check arrive at the insurer's home office Answer: B

When two parties rely upon the statements and promises of the other and assume no attempt to conceal or deceive means that the contract was entered into upon the basis of: A Equal consideration B Sound business practices C Reasonable expectations D Utmost good faith Answer: D

The ____________ has the power to issue rules and regulations to help enforce insurance statutes. Answer: Commissioner

For the most part, the highest authority for insurance regulation is: A The Interstate Commerce Commission (ICC) B The individual states C The National Association of Insurance Commissioners (NAIC) D The Federal Trade Commission (FTC) Answer: B

An insurer which is formed under the laws of another country is a(n): A Foreign insurer B Domestic insurer C Alien insurer D Non-authorized insurer Answer: C

A(n)____________ is the person or entity that is covered by an insurance policy. A Producer B Owner C Insured D Agency Answer: C

The ___________ branch is responsible for interpreting and determining the constitutionality of the statutes. A Judicial B Legislative C Electoral D Executive Answer: A