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Chapter 2 Quiz
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Questions in this quiz (35)
1_________ is the uncertainty or possibility for loss in a given policy.
- AExposure
- BHazard
- CRisk
- DPeril
- ELoss
2_________ is the total outstanding risk for loss.
- AExposure
- BHazard
- CRisk
- DPeril
- ELoss
3__________ is a situation that increases the likelihood for loss; or the severity of loss:
- AExposure
- BHazard
- CRisk
- DPeril
- ELoss
4___________ is the cause of damage or loss
- AExposure
- BHazard
- CRisk
- DPeril
- ELoss
5________ is the physical damage or loss of income
- ALoss
- BPeril
- CRisk
- DHazard
- EExposure
6_______ is avoiding as much risk as possible; avoiding high-risk policies
- AReduction
- BRetention
- CTransfer
- DSharing
- EAvoidance
7________ is dealing with risk as it occurs; often consumers will pay a higher deductible.
- AReduction
- BRetention
- CTransfer
- DSharing
- EAvoidance
8________ is dealing with risk for a group of people with the same risk to reduce the loss for the individual:
- AAvoidance
- BSharing
- CTransfer
- DRetention
- EReduction
9_______ is limiting the probability for risk by taking preventative steps:
- AReduction
- BRetention
- CTransfer
- DSharing
- EAvoidance
10_________ is placing risk to another party whom assumes liability if and when loss should occur.
- AReduction
- BRetention
- CTransfer
- DSharing
- EAvoidance
11________ is the social phenomenon whereby persons with a higher than average probability of loss seek greater insurance coverage than those with less risk..
- ALaw of large numbers
- BReinsurance
- CAdverse selection
12________ indicates the larger the pool of insurance policies written the greater probability to estimate the loss expected. This allows companies to estimate how many policies should be written in order to cover the expected loss.
- ALaw of large numbers
- BReinsurance
- CAdverse selection
13_______ is a transaction between a primary insurer and another licensed (re) insurer where the reinsurer agrees to cover all or part of the losses and/or loss adjustment expenses of the primary insurer. The assumption is in exchange for a premium.
- ALaw of large number
- BReinsurance
- CAdverse selection
14______ is a type of insurance company whom gains its capital from its shareholders, or those who purchase stock in the company.
- AStock Companies
- BLloyd's Associations
- CFraternal Benefit Societies
- DMutual Companies
15_______ is a type of insurance company owned entirely by the policyholders (consumer).
- AStock companies
- BLloyd’s associations
- CFraternal benefit societies
- DMutual companies
16______ is an organization of people who usually share a common ethnic, religious, or vocational affiliation. This type of society may provide insurance to its members.
- AStock companies
- BLloyd’s associations
- CFraternal benefit societies
- DMutual companies
17In a _______ individuals who are not in business together come together and each is only responsible for the portion of the risk they choose to insure.
- AStock companies
- BLloyd’s associations
- CFraternal benefit societies
- DMutual companies
18Self-insured funds is a method of managing risk by setting aside a pool of money to be used if an unexpected loss occurs..
- ATrue
- BFalse
19_______ is any insurance company operating in a country for which the company did not originate..
- ADomestic
- BForeign
- CAlien
20______ is any insurance company operating within the same state for which the company originated.
- ADomestic
- BForeign
- CAlien
21 _______ is any insurance company operating in a state for which the company did not originate.
- ADomestic
- BForeign
- CAlien
22______ authority is granted to an individual based upon a mutual agreement, and is explicitly stated and understood. .
- AApparent
- BImplied
- CExpress
23_______ authority is not explicitly stated, but is reasonably assumed.
- AApparent
- BImplied
- CExpress
24______ is an agent's power to act on behalf of a principal, even though not expressly or impliedly granted.
- AApparent
- BImplied
- CExpress
25Which of the following are elements of a legal contract?
- AOffer and acceptance
- BConsideration
- CCompetent parties
- DLegal purpose
- EAll of the above
26______ is a contract in which one party has substantially more power than the other in creating the contract.
- AUnilateral contract
- BPersonal contract
- CConditional contract
- DAleatory contract
- EContract of adhesion
27______ is an agreement concerned with an uncertain event that provides for unequal transfer of value between the parties.
- AUnilateral contract
- BPersonal contract
- CConditional contract
- DAleatory contract
- EContract of adhesion
28______ is a contract written to a named individual that may not be transferred.
- AUnilateral contract
- BPersonal contract
- CConditional contract
- DAleatory contract
- EContract of adhesion
29______ is a contract in which only one party makes an enforceable promise..
- AUnilateral contract
- BPersonal contract
- CConditional contract
- DAleatory contract
- EContract of adhesion
30_____ is a legal agreement that requires the prior performance of another agreement or clause in order to be enforceable.
- AUnilateral contract
- BPersonal contract
- CConditional contract
- DAleatory contract
- EContract of adhesion
31Indemnity is the form of a contract that ensures a party be brought back to whole in the event of a peril.
- ATrue
- BFalse
32______ are any statements made by the applicant in the process of filling out an application that are believed to be correct in nature to the best of their knowledge
- AEstoppel
- BRepresentations
- CWarranties
- DWaiver
33______ is any statement made in the application process for insurance that is guaranteed to be true in nature. .
- AEstoppel
- BRepresentations
- CWarranties
- DWaiver
34_________ is the voluntary withholding of a given legal right, or advantage known by the insurer
- AEstoppel
- BRepresentations
- CWarranties
- DWaiver
35________ is utilized to prevent the denial of a fact if the fact was admitted to be true by a previous action
- AEstoppel
- BRepresentations
- CWarranties
- DWaiver
Information
- Description
- This chapter will make up roughly 20%, 10 questions, of the required examination.
- Author
- L S
- Language
- English
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