Florida Insurance 2-15 Exam Terms Multi Choice Exam Questions And 100% Solved Solutions.
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Course
Florida 2-15 Insurance License
Institution
Florida 2-15 Insurance License
Insurance - Answer 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 - Answer Is based on actuarial or mathematical principles and gua...
Florida Insurance 2-15 Exam Terms Multi
Choice Exam Questions And 100%
Solved Solutions.
Insurance - Answer 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 - Answer 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 - Answer Evolved from scientific principles to provide funds for medical expensed due
to sickness or injury and to cover loss of income during disability
Annuities - Answer 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.
Risk - Answer Uncertainty regarding loss; the probability of loss occurring for an insured or prospect
Speculative Risks - Answer Involve the possibility of loss and gain. (Not Insurable)
Pure Risks - Answer Involve the possibility of loss only. (Insurable)
Peril - Answer Cause of risk (when a building burns, fire is the peril)
Hazards - Answer The source of danger
Physical Hazard - Answer A hazard being of physical nature.
A person being treated of cancer, the disease is the physical endangerment. (Blindness & deafness)
,Risk Avoidance - Answer Occurs when individuals evade risk entirely. "If you don't drive, then you avoid
getting in an auto accident."
Risk Reduction - Answer Takes place when the chances of loss are lessened. Changing a lifestyle to
minimize a known risk.
Risk Retention - Answer Being aware of the risks involved and taking precautions for financial
protection. Auto policy's deductible is an illustration of risk retention
Risk Transference - Answer The act of shifting the responsibility of risk to another in the form of an
insurance contract.
Adverse Selection - Answer 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 - Answer 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 - Answer Participating policies
Owned by policyholders
Vote for directors and trustees
Directors and management have control
Typically higher rates
Assessment Mutual Insurers - Answer Prohibited in Florida
,Pure Assessment Mutual Company - Answer Don't pay premium and total loss is divided among
members
Lloyds of London - Answer NOT considered an insurance company
- An association of individuals and companies that individually underwriter insurance.
Fraternal Benefit Societies - Answer Must be nonprofit, have a lodge system, and offer insurance to its
members only
Service Providers - Answer Contract for and sell medical and hospital care services. Participants are
known as subscribers.
Home Service Insurer - Answer Insurer that offers relatively small policies with premiums payable on a
weekly basis.
Captive Agents - Answer A.k.a. Career agents
Works for only one insurer and sells only that insurers products
Independent Agents - Answer Is self-governing and actually works for himself. This affords him the
versatility to represent several insurers and their different insurance products.
Special Agents - Answer Usually not license and don't sell insurance. Assist insurance companies field
representatives.
Career Agency System - Answer (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 - Answer (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 - Answer Agents represent several insurers through signed contracts and
are paid on commission or fee basis, not through salary.
Regulating the business of insurance - Answer Legislation
The Court System
State Insurance Departments
Paul v. Virginia - Answer - 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) - Answer - Ruling is a form of interstate
commerce
- Should be regulated by the federal government
- Fed Gov. WINS
The McCarran-Ferguson Act - Answer - 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 - Answer - 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 - Answer - 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.
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