CA code and ethics cram exam

Any situation that presents the possibility of a loss is known as?

A loss exposure

making an insured whole by restoring them to the same condition as before a loss is an example of?

the principle of indemnity

Which of the following is a requirement of a contract?

there must be an offer and acceptance of the contract terms

All of the following are benefits of insurance EXCEPT it

eliminates fradulent losses

According to the california insurance code, if an insurer's certificate of authority is revoked, the commissoner can proced with any of the following EXCEPT?

Using gauantee funds to pay salaries

Upon notification of a claim, a claimant must be given access to the california fair claims settlement practives by all the following mean EXCEPT

By interview appointment with the agent of record

All the following would be considered unfair trade practicesEXCEPT

Commiting any act of discrimination whether it be deemed fair or unfair

Why is having a large number of similar exposure units important to insurers?

The greater the number insured, the more accurately the insurer can predict losses and set appropriate premiums

Loss retention is an effective risk management technique when all the follwing exist EXCEPT the

Probability of loss is unknown

The required contents of a policy include all the following EXCEPT

The probability of loss

Risk can be defined as all the folowing EXCEPT

The cause of loss

As authorized by the California insurance code, the insurance commissioner has provided standards for names used by life insurance agents. Under these standards which, if any, of the following are automatically acceptable for Mary Brown, a holder of the CLU designation?

Mary Brown insurance Services

insureds are entiteles to recover an amount NOT greater than the amount of their loss under the principle of

indemnity

A contract in which one party pomises to indemnify another against loss that arise fom an uknown event is

an insurance policy

the process by which an insurer decides wheather to issue requested insurance is called

underwriting

all of the following statements about aleatory contracts are true EXCEPT

the insured and insurer contribute equally to the contract

as defined in the california insurance code, “insurance" is a

contract

moral hazards can be defined as the increase

chance of a loss occuring due to an insured's dishonest tendencies

All of the occurrences listed below are examplees of an insurable event as defined by the california insurance code EXCEPT

An insured sufferes a financial loss in the state lottery

A situation in which there is a possibility of loss or a gain is a

speculative risk

insurer policy expenses include all of the following EXCEPT

premiums

which of the folowing information is not required to be communicated in a life insurance contract

pesonal judgement

unintentional concealment entitles the injured party to which course of action, if any?

rescission of the contract

all of the following are characteristics of reinsurance EXCEPT it

increases the unearned premium reserve

what is the goal of the underwriting process

to avoid selecting a disproportionate number of bad risks

what is the definition of premium

money an insured pays an insurer to obatin the benefits provided in the policy

the direct response distribution of insurance utilizes all of the following to promote the sale of insuranceEXCEPT

telephone call from an agent

According to the california insurance code, an insurance policy must specify all of the follwing EXCEPT the

financial rating of the insurer

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 or premiums for an insured?

fiduciary

moral hazard can be defined as the increased

chance of a loss occuring due to the insured's dishonest tendencies

who are members of the medical information bureau?

life and health insurers

which of the following statements regarding risk is TRUE

only pure risk are insurable

the purchase of an insurance policy may accomplish all of the following for the insured EXCEPT

the elimination of the risk

unless it is merely a statement of an exception or belief, a representaion as to the future is considered which of the following?

promise

what is meant by reffering to an insurance policy as a unilateral contract?

only one party makes a leggally enforceable promisee

what rule is used to determine the importance of a representation

the materiality of concealment

in insurance terminology, “indemnity" means

make whole

a contract of indemnity is one in which

one party is restored tot he same financial position he party was in before the loss occured

when must insurance records of insurance agents and brokers be made available to the insurance commissioner

at all times

what would a person be guilty of who refuses to deliver any books, records, or assests tot he commissioner once a seizure order has been executed?

a misdemeanor

all of the following qualify as “background information" as defined in section 1729.2 of the california insurance code, EXCEPT

misdemeanor charges filed not resulting in conviction

which type of insurer is owned by its policyholders?

A mutual insurer

The required contents of a policy include all of the following EXCEPT

The probability of loss

Section 1729.2 of the Caifornia Insurance Code requires insurance producer applications and licesees to notify the insurance commissioner in writing, within ______ Days of changes in the background information after an application has been submitted or license has been issued.

30

what rule is used to determine the importance of a representation?

the materiality of concealment

how often must an insurer file the national association of insurance commissioners (NAIC) fiancial statement?

annually

which of the following is a hazard?

a condition that may increase the lieklyhood of loss occuring

upon notification of claim, a claimant must be given access to the califnora fair claims settlement practices regulations by all of the following means EXCEPT

by interview appointment with the agent of record

The direct response distribution of insurance itilizes all of the following to promote the sale of insurance EXCEPT

telephone call from an agent

A person authorized by and on behalf of an insurer who transacts life, disability, or life and accident and helath insurance is defined as

life agent

a contract that restores an injured party to the condition that was present before the loss is

an indemnity agrement

which of the following would an agent be gulity for misrepresenting the amount of the dividends a policy will pay?

a misdemeanor

if you have been convicted of a misdemeanor and that misdemeanor conviction is later expunged pursuantto California penal code section 1203.4, which following is true?

Even though your misdemeanor conviction was expunged, you must still disclose your misdemeaner conviction on your individual application for an insurance license

policies covered under the california life and health insurance guarantee association include all of the folowing except

self-funded group life

if an inurer must have its rates acceptd by the insurance department prior to using them, the insurer would be operating in which of the following types of jurisdictions?

Prior approval

the california code of regulations governing claim settlement practives prohibits all of the following act of unfair discrimination EXCEPT denial of claim based on

reckless behavior

an insurance solicitor is a person authorized to

assist a broker or agent in selling insurance

when a person charges an insured a fee to review the insured's exsisting life policy, what type of license does that person need?

a life and disability analyst

it is considered an unfair method of competition for an agent to advertise that the insurer the agent is appointed with is

a member of the insuracne guarantee association

he increase in the probability of a loss resulting from an insured's dishonest tendencies is known as

moral hazard

all of the following are requirements of a contract EXCEPT

there must be consideration between the parties

According to the california insurance code, the commissioner can disapprove a liscensee's request to use a fictitous name for any of the following reason EXCEPT that the

name is the licensee's actual name

risk can be defined as all the following EXCEPT

the cause of loss

according to the california insurance code, an “insurance broker” is

compansated for transacting insurance on behalf of another perons with an insurer

Failure to report background changes within 30 days as required under section 1729.2 of the califnora insurance code could subject a licensee or applicant to

suspension, denial, or revocaof the license or ALL

insurer expenses include all the following

taxes, agent commissions, and home office operations

the Primary objectives of insurance regulation include all of the following EXCEPT

interpret policy provisions

what is it called when an insurer uses higher raters for an individual solely based on religion, race, or ethnic groups?

unfair discrimination

all of the following qualify as a background information as defined in section 1729.2 of the california insurance code, EXCEPT

misdemeanor charges

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

Reinsurance

loss rention is an effective risk management technique whaen all of the following conditions exsist EXCEPT the

probability of loss is unknown

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

never

when used in the california insurance code the word “may" is intended be

permissive

it is a federal offense for an insurance agent to do all of the following EXCEPT

misrepresent facts on an insurance application

all of the following statements about aleatory contracts are true EXCEPT

the insured and insurer contribute equally to the contract

a contract in which one party promises to indemnify another against another against loss that arises from an unknown event is

an insurance policy

a person who acts, offeres to act, or assumes to act in a capacity where a license is required without having a valid license, is gulity of a

misdemeanor

as defined in the california insurance code, “insurance” is a

contract

who are the members of the medical information bureau?

Life and health insurers

the purchase of an insurance policy may accomplish all of the following for the insured EXCEPT

the elimination of risk

which of the following statements regading risk is true?

only true risks are insurable

the insurer's department with PRIMARY responsility for the risk selction process is called?

underwriting

the more times an event is repeated, the more predictable the outcome becomes. This is an example of

the law of large numbers

What recourse does an insurer have if violation of a material warranty on the part of the insured is discoverd?

rescission of the policy

an insurer entitled to transact business by complying with the california insurance code is known as an

admitted carrier

which of the following is an express power given to the agent in an agency agreement?

The authority to represent the insurer.