Bill is an insurance producer for and employed by ABC Insurance
Company (ABC). He represents only ABC when marketing insurance
products, and uses an administrative staff also employed by ABC. Bill
is a producer in the - ANSWER-Direct writer marketing system
Because the insurance company usually determines policy wording
and the insured has little choice but to "take it or leave it," an
insurance contract is a - ANSWER-Contract of adhesion
Which one of the following best explains why producers should be
alert to changes in clients' loss exposures? - ANSWER-Implemented
risk management techniques may prove to be ineffective or become
obsolete
At Greenfield Insurance Company, Bernadette and Rachel are
corporate underwriters, and Tomas and Jose are field underwriters.
All of the following are underwriting activities typically performed by
corporate (or staff) underwriters like Bernadette and Rachel, EXCEPT:
- ANSWER-Support producers and insureds
Joel is the underwriter for Stanton Industries. He received a notice
from the premium auditor on the account. After a recent visit to the
insured's location, the auditor wanted to make Joel aware of a decline
,in the business and some questionable business practices. Which
one of the following types of hazards is the auditor identifying? -
ANSWER-Moral hazards
Moral hazards - ANSWER-include questionable business practices or
a failing business.
James West is a claims rep with Hatters Insurance. As he learns how
to handle a claim from start to finish, which one of the following best
describes the correct order for him to follow during this process? -
ANSWER-Identifying the policy, calculating a loss reserve,
determining the cause of loss, preparing a loss statement
Margaret was severely injured and scarred due to a recent accident.
Which one of the following is an example of general damages
Margaret received? - ANSWER-Compensation for disfigurement
Donna is an insurance producer. She makes an appointment with
potential policyholder Sandie to review her loss exposures. She asks
Sandie to complete a questionnaire to assist her in this effort. Donna
is conducting a - ANSWER-Risk management review
Rachel is a new employee of Westley Insurance, and has been asked
to review some existing policies to become familiar with the types of
policies she will be working with. Which one of the following will
Rachel find is true as she conducts her review? - ANSWER-Rachel
,finds the policy begins with a coverage overview and then goes into
more coverage details.
Sports, Inc. is looking to obtain a commercial property policy on its
building for $400,000. If their insurer decides to charge them a rate of
$0.50 per $100 of building insurance, what premium must Sports, Inc.
pay? - ANSWER-$2,000
Destructive competition in the insurance industry could result in -
ANSWER-Insurance shortages
The financial report for Hometown Insurer contains the following
information:
Earned premiums$4,000,000Written premiums$5,000,000Net
investment income$1,000,000Incurred losses$3,000,000Incurred
underwriting expenses$2,000,000
What is Hometown Insurer's loss ratio? - ANSWER-75%
Loss Ratio - ANSWER-incurred losses divided by its earned premiums
Jessie is a new customer service representative (CSR) at the Winfield
Agency. Jessie usually engages in all the following activities,
EXCEPT: - ANSWER-Determining coverage quotes
Riley Turner is performing a comprehensive evaluation of Hardwick
Enterprises to make sure its insurance and risk management efforts
are serving the organization appropriately. Which one of the following
, will be true in regard to this effort? - ANSWER-Besides risk
management goals being attainable, they should also pose a
challenge.
Rachel is considering investing in the stock of an insurance company.
Which one of the following is likely to provide the best indication of
the insurer's financial position at this point in time? -
ANSWER-Balance sheet
Balance Sheet - ANSWER-provides the best indication of its financial
position because it shows admitted assets, liabilities, and
policyholders' surplus at a particular point in time.
Which one of the following is the amount of business an insurer can
write based on regulatory guidelines, usually a comparsion of the
insurer's written premiums to the policyholders' surplus? - ANSWER-
Capacity
The two main sectors of the insurance industry are - ANSWER-
Property-casualty insurance and life-health insurance
The difference between an independent agency and an exclusive
agency is that an - ANSWER-Exclusive agency is contracted to sell
insurance for one insurer or group of insurers
A liability loss has the following damages: Medical
expenses:$10,000Damages for disfigurement:$50,000Damages
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