Question 1

Which of the following types of claims adjusters do not represent insurance companies?

Accepted Answer

A) public adjusters 
B) the insurance agent 
C) the independent adjustment bureau 
D) company adjusters 
A) public adjusters 
B) the insurance agent 
C) the independent adjustment bureau 
D) company adjusters

Question 2

Denny Crane was an agent for Mutual of Florida Insurance,but his agency contract was recently revoked. One of his clients,Shirley Schmidt,has not yet been informed that he no longer represents Mutual of Florida. She drops by his office to deliver a premium payment,which he accepts and deposits into his own account. When Mutual of Florida does not receive Shirley Schmidt's premium,it sends her a cancellation notice. Before receiving her cancellation notice,she suffers a loss and expects Mutual of Florida to pay her claim. What will likely happen in this scenario?

Accepted Answer

A) Mutual of Florida will likely have to pay the claim 
B) Mutual of Florida will not have to pay the claim, but Denny Crane likely will 
C) Neither Mutual of Florida, nor Denny Crane, will have to pay the claim 
D) The claim will be paid by the court, and it will then sue Mutual of Florida 
A) Mutual of Florida will likely have to pay the claim 
B) Mutual of Florida will not have to pay the claim, but Denny Crane likely will 
C) Neither Mutual of Florida, nor Denny Crane, will have to pay the claim 
D) The claim will be paid by the court, and it will then sue Mutual of Florida

Question 3

Why is the power to bind life insurance contracts not given to agents?

Accepted Answer

A) agents are not capable of evaluating the risks they deal with 
B) to minimize fraud and misunderstanding 
C) because the agents represent the insurance buyers and not the insurance companies 
D) all of the above 
A) agents are not capable of evaluating the risks they deal with 
B) to minimize fraud and misunderstanding 
C) because the agents represent the insurance buyers and not the insurance companies 
D) all of the above

Question 4

The primary difference between an insurance agent and an insurance broker is:

Accepted Answer

A) their compensation scheme 
B) the parties they each legally represent 
C) the fringe benefits their employers provide 
D) there is no practical or legal difference between them, other than their titles. 
A) their compensation scheme 
B) the parties they each legally represent 
C) the fringe benefits their employers provide 
D) there is no practical or legal difference between them, other than their titles.

Question 5

Four states do not require people who sell insurance to be licensed.

Accepted Answer

A) True 
 B)False

Question 6

The independent agent system

Accepted Answer

A) is used by direct writing companies 
B) uses agents who own their own business 
C) is used only in life insurance 
D) requires agents to be paid a flat salary 
A) is used by direct writing companies 
B) uses agents who own their own business 
C) is used only in life insurance 
D) requires agents to be paid a flat salary

Question 7

Insurance agents must never give clients legal advice.

Accepted Answer

A) True 
 B)False

Question 8

Due to the doctrines of waiver and estoppel,a company may have to pay claims it would otherwise deny.

Accepted Answer

A) True 
 B)False

Question 9

Most states require licensed insurance agents to be at least age 18,to have good morals,and to pass an examination.

Accepted Answer

A) True 
 B)False

Question 10

In Jasons agency contract,the insurer authorizes him to sell insurance policies. What type of authority is this?

Accepted Answer

A) actual 
B) express 
C) incidental 
D) both a & b 
A) actual 
B) express 
C) incidental 
D) both a & b

Question 11

Explain what a direct writer company is. Explain what the independent agency system is.

Accepted Answer

A direct writer company uses employee/ag

Question 12

All the following are true about underwriting except:

Accepted Answer

A) a major purpose of underwriting is to reduce adverse selection against the insurance company 
B) fair rates should be charged so that each group of insureds is not subsidized by other groups 
C) the underwriter should select only those insureds that are expected to have no losses 
D) the underwriter makes decisions based on criteria established by the company management 
A) a major purpose of underwriting is to reduce adverse selection against the insurance company 
B) fair rates should be charged so that each group of insureds is not subsidized by other groups 
C) the underwriter should select only those insureds that are expected to have no losses 
D) the underwriter makes decisions based on criteria established by the company management

Question 13

Many insurers sometimes use loss adjusters who are not employees of the company.

Accepted Answer

A) True 
 B)False

Question 14

Jerry works as a claims adjuster. He is hired by insurance companies on a contract basis to adjust claims when they need his services. What kind of claims adjuster is Jerry?

Accepted Answer

A) Independent 
B) Public 
C) Private 
D) Direct 
A) Independent 
B) Public 
C) Private 
D) Direct

Question 15

In 2004,insurance brokers in New York were accused of violating a duty to their clients (insurance buyers). What was that duty?

Accepted Answer

A) loyalty to the buyer 
B) no self-dealing at the buyer's expense 
C) full disclosure to the buyer about the insurer's financial condition 
D) full disclosure of all the broker's investment interests in insurers 
A) loyalty to the buyer 
B) no self-dealing at the buyer's expense 
C) full disclosure to the buyer about the insurer's financial condition 
D) full disclosure of all the broker's investment interests in insurers

Question 16

Direct writing:

Accepted Answer

A) describes the distribution system used by independent agents and brokers in the property/liability area 
B) is used only by life insurers 
C) is an expensive way to distribute insurance to high income people 
D) describes a system of insurance company distribution using employee/agents 
A) describes the distribution system used by independent agents and brokers in the property/liability area 
B) is used only by life insurers 
C) is an expensive way to distribute insurance to high income people 
D) describes a system of insurance company distribution using employee/agents

Question 17

The MIB is most helpful to which of the following professionals?

Accepted Answer

A) life insurance agent 
B) life insurance underwriter 
C) property insurance agent 
D) secret defenders of the galaxy 
A) life insurance agent 
B) life insurance underwriter 
C) property insurance agent 
D) secret defenders of the galaxy

Question 18

The insurance company accountant must apply what set of accounting principles when creating insurer financial statements for the state regulators?

Accepted Answer

A) Generally Accepted Accounting Principles 
B) Statutory Accounting Principles 
C) Both of the above 
D) International Accounting Standards Board principles 
A) Generally Accepted Accounting Principles 
B) Statutory Accounting Principles 
C) Both of the above 
D) International Accounting Standards Board principles

Question 19

Legally,life insurance agents are not employees of the companies they represent.

Accepted Answer

A) True 
 B)False

Question 20

The brokerage function does not exist in life insurance sales.

Accepted Answer

A) True 
 B)False

Exam 5: Insurance Occupations

Which of the following types of claims adjusters do not represent insurance companies?

Why is the power to bind life insurance contracts not given to agents?

The primary difference between an insurance agent and an insurance broker is:

Four states do not require people who sell insurance to be licensed.

The independent agent system

Insurance agents must never give clients legal advice.

Due to the doctrines of waiver and estoppel,a company may have to pay claims it would otherwise deny.

Most states require licensed insurance agents to be at least age 18,to have good morals,and to pass an examination.

In Jasons agency contract,the insurer authorizes him to sell insurance policies. What type of authority is this?

Explain what a direct writer company is. Explain what the independent agency system is.

All the following are true about underwriting except:

Many insurers sometimes use loss adjusters who are not employees of the company.

Jerry works as a claims adjuster. He is hired by insurance companies on a contract basis to adjust claims when they need his services. What kind of claims adjuster is Jerry?

In 2004,insurance brokers in New York were accused of violating a duty to their clients (insurance buyers). What was that duty?

Direct writing:

The MIB is most helpful to which of the following professionals?

The insurance company accountant must apply what set of accounting principles when creating insurer financial statements for the state regulators?

Legally,life insurance agents are not employees of the companies they represent.

The brokerage function does not exist in life insurance sales.

Fundamentals and Terminology

Defining the Insurable Event

Risk Management

Financial Services Companies

the Insurance Market: the Economic Problem

Insurance Regulation

Insurance Contracts

Basic Property and Liability Insurance Contracts

Homeowners Insurance

the Personal Auto Policy

Professional Financial Planning

Life Insurance Policies

Standard Life Insurance Contract Provisions And Options

Annuities

Medical Expense and Disability Insurance

Advanced Topics in Risk Management

Commercial Property Insurance

Commercial Liability Insurance

Bonding,Crime Insurance and Reinsurance

Employee Benefits

Social Security

Unemployment and Workers Compensation Insurance

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