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2024 FLORIDA INSURANCE 2-15 EXAM TERMS WITH 100% CORRECT ANSWERS
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2024 FLORIDA INSURANCE 2-15 EXAM TERMS WITH 100% CORRECT ANSWERS
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2024 FLORIDA INSURANCE 2-15EXAM TERMS WITH 100%
CORRECT ANSWERS
Insurance - CORRECT ANSWERS- Financial protection against loss or harm -
An arrangement by which company gives customers financial protection
against loss or harm such as theft or illness in return for premium payments.
Life Insurance - CORRECT ANSWERS- Is based on actuarial or mathematical
principles and guarantees a specified sum of money upon the death of the
person who is insured.
Health Insurance - CORRECT ANSWERS- Evolved from scientific principles to
provide funds for medical expensed due to sickness or injury and to cover
loss of income during disability
Annuities - CORRECT ANSWERS- Provide a stream of income by making a
series of payments to the annuitant for the annuitant's lifetime or for a
specifically designated period of time.
Newborn Children - CORRECT ANSWERS- - Must be covered immediately at
birth till 18 months
Alcoholism and Drug Dependency - CORRECT ANSWERS- - Health insurers
are required by Florida law to offer coverage for alcoholism and drug
dependency to the policyowner.
Optometrists and Podiatrists - CORRECT ANSWERS- - Medical expense
policies must provide payment to an optometrist or podiatrist
Chiropractic Treatment - CORRECT ANSWERS- - insurers must either provide
or offer chiropractic coverage
Diabetes - CORRECT ANSWERS- - Health insurance policies and HMO
contracts must provide coverage for all medically necessary equipment~
Breast Cancer and Mastectomies - CORRECT ANSWERS- - Must provide
coverage for prosthetic devices and reconstructive surgery following a
mastectomy, including all surgery necessary to reestablish symmetry
between the breasts
,- Cannot deny or exclude coverage if they have been breast cancer free for
two years
Cleft Lip and Palate - CORRECT ANSWERS- - must cover a child under 18
- Must include: Medical, Dental, Speech therapy, Audiology, and Nutrition
Mini COBRA - CORRECT ANSWERS- - What Florida Health Insurance
Coverage Continuation Act is considered
- Up to 18 months without proof of insurability, after being fired
- Conversion must take place within 31 days after termination
Risk - CORRECT ANSWERS- Uncertainty regarding loss; the probability of loss
occurring for an insured or prospect
Speculative Risks - CORRECT ANSWERS- Involve the possibility of loss and
gain. (Not Insurable)
Pure Risks - CORRECT ANSWERS- Involve the possibility of loss only.
(Insurable)
Peril - CORRECT ANSWERS- Cause of risk (when a building burns, fire is the
peril)
Hazards - CORRECT ANSWERS- The source of danger
Physical Hazard - CORRECT ANSWERS- A hazard being of physical nature.
A person being treated of cancer, the disease is the physical endangerment.
(Blindness & deafness)
Risk Avoidance - CORRECT ANSWERS- Occurs when individuals evade risk
entirely. "If you don't drive, then you avoid getting in an auto accident."
Risk Reduction - CORRECT ANSWERS- Takes place when the chances of loss
are lessened. Changing a lifestyle to minimize a known risk.
Risk Retention - CORRECT ANSWERS- Being aware of the risks involved and
taking precautions for financial protection. Auto policy's deductible is an
illustration of risk retention
Risk Transference - CORRECT ANSWERS- The act of shifting the
responsibility of risk to another in the form of an insurance contract.
Adverse Selection - CORRECT ANSWERS- Refers to the tendency for those
individuals who present less favorable insurance risk to seek or continue
insurance to a great extent than other risks.
,Insuring Pure Risk - CORRECT ANSWERS- Loss must be due to chance
Loss must be definite and measurable
Risk must be predictable
Loss must NOT be catastrophic
Exposure to loss must be large
Loss exposures must be randomly selected
Mutual Insurers - CORRECT ANSWERS- Participating policies
Owned by policyholders
Vote for directors and trustees
Directors and management have control
Typically higher rates
Assessment Mutual Insurers - CORRECT ANSWERS- Prohibited in Florida
Pure Assessment Mutual Company - CORRECT ANSWERS- Don't pay
premium and total loss is divided among members
Lloyds of London - CORRECT ANSWERS- NOT considered an insurance
company
- An association of individuals and companies that individually underwriter
insurance.
Fraternal Benefit Societies - CORRECT ANSWERS- Must be nonprofit, have a
lodge system, and offer insurance to its members only
Service Providers - CORRECT ANSWERS- Contract for and sell medical and
hospital care services. Participants are known as subscribers.
Home Service Insurer - CORRECT ANSWERS- Insurer that offers relatively
small policies with premiums payable on a weekly basis.
Captive Agents - CORRECT ANSWERS- A.k.a. Career agents
Works for only one insurer and sells only that insurers products
Independent Agents - CORRECT ANSWERS- Is self-governing and actually
works for himself. This affords him the versatility to represent several
insurers and their different insurance products.
Special Agents - CORRECT ANSWERS- Usually not license and don't sell
insurance. Assist insurance companies field representatives.
Career Agency System - CORRECT ANSWERS- (GA) - Build sales staffs and
agents are treated as employees. They are recruited and trained. A principal
of the company supervises agents.
, Personal Producing General Agency System - CORRECT ANSWERS- (PPGA) -
The agent supplies his own working environment. Agents hired by a PPGA
are considered employees of the PPGA, not the insurance company, and are
supervised by the regional salary.
Independent Agency System - CORRECT ANSWERS- Agents represent
several insurers through signed contracts and are paid on commission or fee
basis, not through salary.
Regulating the business of insurance - CORRECT ANSWERS- Legislation
The Court System
State Insurance Departments
Paul v. Virginia - CORRECT ANSWERS- - State tried to control insurance
domiciled from another state.
- U.S. Supreme Court sided against insurance company
- Upholding the right of sate to regulate insurance
- States WIN
United States v. Southeastern Underwriters Association (SEUA) - CORRECT
ANSWERS- - Ruling is a form of interstate commerce
- Should be regulated by the federal government
- Fed Gov. WINS
The McCarran-Ferguson Act - CORRECT ANSWERS- - Gave back some
regulatory authority to the states
- Did not provide the states to regulate individually
- Insurance regulated by state law "is in the publics best interest"
Intervention by the FTC - CORRECT ANSWERS- - FTC tried to control the
advertising and sales literature used by the health insurance industry
- Thus, supreme court held that the McCarran-Ferguson Act disallowed this
- FTC tried even harder to force more federal control
Intervention by SEC - CORRECT ANSWERS- - Dealing with variable annuities
- Securities and Exchange Commission (SEC) should regulate the variable
annuities (since they're used for investments) & variable life insurance.
- Therefore, agents must obey the rules to both SEC and state regulation.
Fair Credit Reporting Act - CORRECT ANSWERS- - Fair and accurate report of
information about consumers
- Insurers must inform them about any investigations being made
- Then insurers must let the applicants know the name of the reporting
agency
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