The stated amount or percent of liquid assets that an insurer must have on hand that will satisfy future obligations to its policyholders is called:
Reserves
An insurance applicant MUST be informed of an investigation regarding his/her reputation and character according to the:
Fair Credit...
Florida 240 License exam questions with
verified correct answers
The stated amount or percent of liquid assets that an insurer must have on hand that will satisfy
future obligations to its policyholders is called: - answer Reserves
An insurance applicant MUST be informed of an investigation regarding his/her reputation and character according to the: - answer Fair Credit Reporting Act
A nonprofit incorporated society that does not have capital stock and operates for the sole benefit of its members is known as: - answer A fraternal benefit society
What I the name of the law that requires insurers to disclose information gathering practices and where the information was obtained? - answer Fair Credit Reporting Act
Who elects the governing body of a mutual insurance company? - answer Policyholders
A group-owned insurance company that is formed to assume and spread the liability ricks of its members is known as a: - answer Risk retention group
What type of reinsurance contract involves two companies automatically sharing their risk exposure? - answer treaty
What year was the McCarran-Ferguson Act enacted? - answer 1945
Which of these describe a participating life insurance policy? - answer Policy owners are entitled
to receive dividends At what point must a life insurance applicant be informed of their rights that fall under the Fair Credit Reporting Act? - answer Upon completion of the application
Which of the following requires insurers to disclose when an applicant's consumer or credit history is being investigated: - answer 1970 - Fair Credit Reporting Act
What type of reinsurance contract involves two companies automatically sharing their risk exposure? - answer Treaty
A group-owned insurance company that is formed to assume and spread the liability risks of its members is known as a: - answer risk retention group
All of the following are considered to be typical characteristics describing the nature of an insurance contract, EXCEPT: - answer Bilateral
The part of a life insurance policy guaranteed to be true is called a(n) - answer warranty
Statements made on an insurance application that are believed to be true to the best of the applicant's knowledge are called - answer representations
Q purchases a $500,000 life insurance policy and pays $900 in premiums over the first six months. Q dies suddenly and the beneficiary is paid $500,000. This exchange of unequal values reflects which of the following insurance contract features? - answer Aleatory
When must insurable interest be present in order for a life insurance policy to be valid? - answer
When the application is made
A life insurance arrangement which circumvents insurable interest statutes is called: - answer Investor-Originated Life Insurance Stranger Originated Life Insurance (STOLI) has been found to be in violation of which of the following contractual elements? - answer Legal Purpose (Insurable Interest)
Who makes the legally enforceable promises in a unilateral contract? - answer Insurance company
A policy of adhesion can only be modified by whom? - answer insurance company
When third-party ownership is involved, applicants who also happen to be the stated primary beneficiary are required to have: - answer insurable interest in the proposed insured
Which of these is considered a statement that is assured to be true in every aspect? - answer Warranty
Which of these require an offer, acceptance, and consideration? - answer contract
If a contract of adhesion contains complicated language, to whom would the interpretation be in favor of? - answer insured
Insurance contracts are known as _____ because certain future conditions or acts must occur before any claims can be paid. - answer conditional
Insurance policies are offered on a "take it or leave it" basis, which make them: - answer Contracts of Adhesion
In regards to representations or warranties, which of these statements is TRUE? - answer If material to the risk, false representations will void a policy
Which of these arrangements allows one to bypass insurable interest laws? - answer Investor-
Originated Life Insurance In an insurance contract, the insurer is the only party who makes a legally enforceable promise. What kind of contract is this? - answer unilateral
Which of these is NOT a type of agent authority? - answer principal
E and F are business partners. Each takes out a $500,000 life insurance policy on the other, naming himself as primary beneficiary. E and F eventually terminate their business, and four months later E dies. Although E was married with three children at the time of death, the primary beneficiary is still F. However, an insurable interest no longer exists. Where will the proceeds from E's life insurance policy be directed to? - answer In this situation, the proceeds from E's life insurance policy will go to F.
When must insurable interest exist for a life insurance contract to be valid? - answer Inception of the contract
Life and health insurance policies are: - answer unilateral contracts
A policy of adhesion can only be modified by whom? - answer insurance company
At what point does an informal contract become binding? - answer When one party makes an offer and the other party accepts that offer
What is the consideration given by an insurer in the Consideration clause of a life policy? - answer Promise to pay a death benefit
What is the consideration given by an insurer in the Consideration clause of life policy? - answer
Promise to pay a death benefit to a named beneficiary
Insurance policies are considered aleatory contracts because: - answer performance is conditioned upon a future occurrence
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller GUARANTEEDSUCCESS. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $15.99. You're not tied to anything after your purchase.
