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XCEL Solutions Exam Questions And Complete Solutions
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XCEL Solutions Exam Questions And Complete Solutions
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XCEL Solutions Exam Questions AndComplete Solutions
Johns owns an insurance policy that gives him the right to share in the insurer's surplus.
What kind of policy is this? CORRECT ANSWERS Participating
A participating company is also referred to as which type of insurer? CORRECT ANSWERS Mutual insurer
Which of the following is NOT a benefit of insurance? CORRECT ANSWERS LOSSES DUE TO FRAUD ARE ELIMINATED
Reduces the uncertainty of loss
Makes a loss whole again
Source of investment funds
An insurer enters into a contract with a third party to insure itself against losses from insurance policies it issues. What is this agreement called? CORRECT ANSWERS Reinsurance
Which of the following is an insurer established by a parent company for the purpose of insuring the parent company's loss exposures? CORRECT ANSWERS Captive insurer
Which of the following is a type of insurance where an insurer transfers loss exposures from policies written for its insureds? CORRECT ANSWERS Reinsurance
AAA Insurance Company has transferred a portion of its loss exposure to BBB Insurance Company. In this reinsurance transaction, what is AAA Insurance Company called? CORRECT ANSWERS Primary insurer
An insurer owned by its policyholders is called a CORRECT ANSWERS Mutual insurer
One important function of an insurance company is to identify and sell to potential customers. Which of these BEST describes this function? CORRECT ANSWERS Marketing
Which of the following is a contract that involves one party which indemnifies another when a loss arises from an unknown event? CORRECT ANSWERS Insurance Policy
A situation in which there is ONLY a chance of loss or no loss is a CORRECT ANSWERS Pure Risk
Which of the following is NOT an element of an insurable risk? CORRECT ANSWERS Loss must be catastrophic An insurer having a large number of similar exposure units is considered important because CORRECT ANSWERS the greater the number insured, the more accurately the insurer can predict losses and set appropriate premiums
Which of the following is considered to be any situation that has the potential for loss? CORRECT ANSWERS Loss exposure
Which of the following is any situation that presents the possibility of a loss? CORRECT
ANSWERS Loss exposure
All of the following circumstances must be met for loss retention to be an effective risk management technique, EXCEPT CORRECT ANSWERS Probability of loss is unknown
Which of the following is NOT considered a definition of risk? CORRECT ANSWERS The cause of a loss
Which of the following refers to a condition that may increase the chance of loss? CORRECT ANSWERS Hazard
Which of the following is a situation where there is a possibility of either a loss or a gain? CORRECT ANSWERS Speculative risk
Which of the following best describes the statement "The more times an event is repeated, the more predictable the outcome becomes"? CORRECT ANSWERS Law of Large numbers
Which of the following is NOT considered to be a definition of the term "loss"? CORRECT ANSWERS Probability that an event will occur
Which of these statements correctly describes risk? CORRECT ANSWERS Pure risk is the only insurable risk
A hazard can be best described as CORRECT ANSWERS a condition that may increase the likelihood of a loss occuring
Which of the following describes the increase in the probability of a loss due to an insured's dishonest tendencies? CORRECT ANSWERS Moral hazard
Which of the following would NOT be accomplished with the purchase of an insurance policy? CORRECT ANSWERS Risk is eliminated
Which of the following statements correctly describes a contract of indemnity? CORRECT ANSWERS One party is restored to the same financial position the party was in before the loss occurred Which course of action is the insurer entitled to when deliberate concealment is committed by the insured? CORRECT ANSWERS Rescinding the contract
Reasonably necessary acts that an agent must perform for carrying out his/her expressly authorized duties are covered by an agent's CORRECT ANSWERS Implied authority
Which of the following is NOT a requirement of a contact? CORRECT ANSWERS -
Parties involved must be competent
-EQUAL CONSIDERATION IS REQUIRED BETWEEN THE INVOLVED PARTIES
-Contract must have a legal purpose
-Offer and acceptance must be involved
When handling premiums for an insured, an agent is acting in which capacity? CORRECT ANSWERS Fiduciary
Which statement is CORRECT when describing a contract of adhesion? CORRECT ANSWERS Contract may be accepted or rejected by the insured
Which of the following contracts is defined as "one that restores an injured party to the condition that was present before the loss"? CORRECT ANSWERS Indemnity contract
Which of the following contracts is defined as "one that restores an injured party to the condition that was present before the loss"? CORRECT ANSWERS Which of the following contracts is defined as "one that restores an injured party to the condition that was present before the loss"? CORRECT ANSWERS Indemnity contract
A contract requires CORRECT ANSWERS Which of the following contracts is defined as "one that restores an injured party to the condition that was present before the loss"? CORRECT ANSWERS Indemnity contract
A contract requires CORRECT ANSWERS Who does a life settlement broker represent? CORRECT ANSWERS Individual wanting
to sell their life policy to a third party
What does the term "illustration" mean when used in the phrase "life insurance policy illustration", according to the California Insurance Code? CORRECT ANSWERS Presentation of policy features that includes non-guaranteed elements
When handling premiums for an insured, an agent is acting in which capacity? CORRECT ANSWERS Fiduciary
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