Insurance Test, Part 1

Insurer policy expenses include all of the following except

Premiums

An agent who is acting as an insurance agent, broker, solicitor, life agent, accident and health, or bail agent acts in which capacity when handling premiums/return premiums for an insured?

Fiduciary

Insured’s are entitled to recover an amount NOT greater than the amount of their loss under the principle of

Indemnity

As defined in the California Insurance Code, “insurance” is a

Contract

Unless it is merely a statement of an expectation or belief, a representation as to the future is considered which of the following?

Promise

The process by which an insurer decides whether to issue requested insurance is called

Underwriting

Which component of a life insurance premium is based on the insured’s age and gender?

Morality

Which type of life insurance policy gives an owner the right to share in the insurer’s surplus?

Participating

What do we call the process whereby insurers decide which customers to insure and what coverage to offer?

Underwriting

An attempt by an agent to deter an insured from replacing an existing life insurance policy is called

Conservation

What is the penalty tax imposed on amounts received from a modified endowment contract?

10%

In a 5-year vesting schedule, what percentage of employer contributions must be vested after 5 years of service?

100%

How much employer-provided group term life insurance is exempt from income taxation?

50,000

Section 1729.2 of the California Insurance Code requires insurance producer applications and licensees to notify the Insurance Commissioner in writing, within _days of changes in background information after an application has been submitted or a license has been issued

30

The social security blackout period ends when the surviving spouse reaches the age of

60

When are parties to a contract REQUIRED to communicate information solely based on personal judgment for a matter in question?

Never

The insurer’s department with PRIMARY responsibility for the risk selection process is called

Underwriting

How often an insurer file the national association of insurance commissioner’s NAIC financial statement?

Annually

Which is an agreement in which an insurer contracts with a third party to insure itself against losses from insurance policies it issues?

Reinsurance

When used in the California Insurance Code, the word “may” is intended to be

Permissive