Personal Lines exam study prep (OH
11-43)
Domicile - CORRECT ANSWER-refers to the jurisdiction (i.e., state or country)
where an insurer is formed or incorporated
Domestic Insurer - CORRECT ANSWER-An insurer organized under the laws of
this state, whether or not it is admitted to do business in this state.
Foreign Insurer - CORRECT ANSWER-An insurer not organized under the laws
of this state, but in one of the other states or jurisdictions within the United
States, whether or not it is admitted to do business in the state or jurisdiction.
Alien Insurer - CORRECT ANSWER-An insurer organized under the laws of any
jurisdiction outside of the United States, whether or not it is admitted to do
business in this state.
Admitted (Authorized) Insurer - CORRECT ANSWER-is authorized by this
State's Commissioner of Insurance to do business in this State. It has received a
Certificate of Authority to do business in this State.
Non-Admitted (Unauthorized) - CORRECT ANSWER-has either applied for
authorization to do business in this state and was declined or they had not
applied.
Underwriting Department - CORRECT ANSWER-Responsible for the selection of
risks and rating that determines actual policy premium
Which insurance company department accepts the insurance risk? - CORRECT
ANSWER-Underwriting
Insurer (principal) - CORRECT ANSWER-the company who issues an insurance
policy
,Producer (agent) - CORRECT ANSWER-A person or agency appointed by an
insurance company to represent it and to present policies on its behalf.
Expressed Authority - CORRECT ANSWER-authority that is written into the
producer's agency contract. Example, producers binding authority.
Implied Authority - CORRECT ANSWER-Authority the public assumes the
producer has.
Apparent Authority - CORRECT ANSWER-Authority created when a producer
exceeds expressed authority, and the insurer does nothing to counter it.
Broker - CORRECT ANSWER-a licensed agent who negotiates insurance on
behalf of the applicant
Which of the following individuals represents the insurance company when
selling an insurance company? - CORRECT ANSWER-Producer
Which of the following types of authority does the public assume an agent has
when quoting insurance? - CORRECT ANSWER-Implied
Speculative Risk - CORRECT ANSWER-A chance of loss, or gain.
Pure Risk - CORRECT ANSWER-a risk that presents the chance of loss but no
opportunity for gain
Loss - CORRECT ANSWER-The reduction, decrease, or disappearance of value
of the person or property insured in a policy, by a peril insured against.
Peril - CORRECT ANSWER-the cause of a loss
Hazzard - CORRECT ANSWER-increases the probability of loss from a peril
Physical Hazard - CORRECT ANSWER-a physical condition that increases the
frequency or severity of loss (example; flammable material stored near a furnace)
, Moral Hazard - CORRECT ANSWER-dishonesty or character defects in an
individual that increase the frequency or severity of loss (burns own house for
insurance payout)
Morale Hazard - CORRECT ANSWER-A condition of carelessness or
indifference that increases the frequency or severity of loss. (example; leaving
car unlocked)
Transfer - CORRECT ANSWER-transferring the risk from one party to another,
such as from one consumer to an insurance company
Retention - CORRECT ANSWER-assume the responsibility for loss
Law of Large Numbers - CORRECT ANSWER-A principle stating that the larger
the number of similar exposure units considered, the more closely the losses
reported will equal the underlying probability of loss.
Insurable Interest - CORRECT ANSWER-must be calculable
Insurable Interest does not include - CORRECT ANSWER-catastrophic perils:
war, nuclear hazard and illegal operations
Dishonest tendencies that increase the probability of loss are what types of
hazard? - CORRECT ANSWER-Moral
Principle of Indemnity - CORRECT ANSWER-an insurance principle stating that
an insured may not be compensated by the insurance company in an amount
exceeding the insured's economic loss
Insurability - CORRECT ANSWER-The acceptability of an applicant who meets
an insurance company's underwriting requirements for insurance.
Underwriting - CORRECT ANSWER-the process of selecting, classifying, and
pricing applicants for insurance
which principal of insurance restores the insured to the same economic condition
that existed before loss? - CORRECT ANSWER-indemnity
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 EXAMQA. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $7.99. You're not tied to anything after your purchase.