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Louisiana Life, Health, and Accident Insurance Licensing Exam Questions and Correct Answers
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Louisiana Life, Health, and Accident Insurance Licensing Exam Questions and Correct Answers
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Louisiana Life, Health, and AccidentInsurance Licensing Exam
Insurance - Answer -the transfer of Pure risk to the insurance company in consideration for a premium
must be pure risk and calculable.
Pure Risk - Answer -the chance of loss without any chance of gain; insurable
Speculative Risk - Answer -possibility for gain or loss; not insurable
Risk - Answer -Chance of loss
Exposure - Answer -a condition that could result in loss
hazard - Answer -something that increases the chance of loss
eg. presence of physical hazard increases the chance of a loss occuring
peril - Answer -cause of loss
,eg. fire
law of large number - Answer -allows insurers to predict claims more accuratley; applies to grops of
people not individuals. The more people in the group, the more accurate the predictions are
Reinsurance - Answer -A form of insurance whereby one insurance company (the reinsurer) in
consideration of a premium paid to it, agrees to indemnify another insurance company (the ceding
company) for part or all of its liabilities from insurance policies it has issued.
stock insurer - Answer -may pay dividends to shareholders (stockholders), thought not guarenteed
reciprocal insurance company - Answer -managed by an attorney-in-fact; unincorporated association of
individuals who insure each other
government insurance offering - Answer -offers insurance for social needs (eg. flood insurance, workers
compensation), but doesn't offer to prevent fraud
foreign company - Answer -has their home office in another state
alien company - Answer -a insurer incorporated outside the US
producer liability - Answer -personally liable when violate producer's contract
producer represenation - Answer -represent the insurance company, not the insured
independent producer - Answer -owns their own accounts, and are not insurance company employees
producer authority - Answer -expressed
implied
, apparent
express authority of producer - Answer -authority of producer that is written in his or her contract
implied authority of producer - Answer -authority not expressly (writtten) granted, but actual authority
producer has to transact normal business activities
Legal Elements of Contract - Answer -Consideration
Offer
Acceptance
Legal Purpose
Legal Capacity
Consideration Clause - Answer -something of value must be exchanged, though it does not have to be
equal; policy can't be voided for unequal consideration
Offer - Answer -specific and definte proposal to enter into a contract
insurance contracts are - Answer -contracts of adhesion ("take it or leave it"), therefore policy
ambiguities always favor the insured; unilateral contracts (only the insurer has a legal obligation to
uphold)
Principle of Indemnity - Answer -the purpose of insurance is to restore the insured to the same position
as before the loss occurred
Principle of Utmost Good Faith - Answer -all parties to an insurance transaction are honest
Representation - Answer -the truth to the best of one's knowledge
Warranty - Answer -a sworn truth, guaranteed to be true, and if a breach of warranty is found, it could
potentially makes the contract voidable.
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