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PA Life, Accident, & Health Insurance Exam
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PA Life, Accident, & Health Insurance Exam
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PA Life, Accident, & Health InsuranceExam
Insurance - -defined as the transfer of PURE risk to the insurance company
in consideration for a premium.
-The chance of loss without any chance of gain is called - -pure risk
-Speculative risk - -has the possibility for gain or loss and is not insurable.
-Risk is defined as the - -chance of loss.
-A condition that could result in a loss is known as an - -exposure
-A hazard is something that increases - -the chance of loss.
-The presence of a physical hazard - -increases the chance of a loss
occurring.
-A peril is - -defined as a cause of loss, such as fire.
-To be insurable, - -losses must be calculable.
-The law of large numbers - -allows insurers to predict claims more
accurately.
-The law of large numbers applies to - -groups of people, not to individuals.
-The more people in the group, - -the more accurate the predictions are.
-Most insurers buy reinsurance - -to protect themselves in the event of a
catastrophic loss.
-Insurance laws are not required - -to be uniform from one state to another.
-A stock insurer - -may pay dividends to its shareholders (stockholders), but
they may not be guaranteed.
-A reciprocal insurance company is managed by an - -attorney-in-fact.
-An unincorporated association of individuals who insure each other is
known as - -a reciprocal insurer.
, -The government offers insurance primarily based upon - -social needs,
such as flood insurance and workers compensation, but does not offer
insurance for the purpose of preventing fraud.
-A foreign company - -has their home office in another state.
-An insurer incorporated outside of the U.S. who sells in the U.S. is - -an
alien company.
-A producer may be personally liable when - -violating the producer's
contract.
-Producers represent - -the insurance company, not the insured.
-Independent producers - -own their own accounts and are not insurance
company employees.
-Producers have - -express, implied and apparent authority.
-The authority a producer - -has that is written in his or her contract is
known as express authority.
-A producer's binding authority (if any) - -is expressed (written down) in the
producer's contract with the insurer the producer represents.
-The authority not expressly (written) granted, - -but is actual authority the
producer has to transact normal business activities, is known as implied
authority.
-The elements of a legal contract may be remembered - -by the acronym C-
O-A-L (consideration, offer, acceptance, legal purpose and legal capacity).
-A requirement for a valid contract - -is offer and acceptance, or mutual
agreement.
-Advertising the availability of insurance is not - -considered to be an offer.
-A specific and definite proposal to enter into a contract is known as - -an
offer.
-The consideration on a policy need - -not be equal.
-A policy may not be voided - -due to unequal consideration.
-Under the consideration clause, - -something of value must be exchanged.
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