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XCEL Solutions Exam Questions and Answers
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XCEL Solutions Exam Questions
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XCEL Solutions Exam QuestionsJohns owns an insurance policy that gives him the right to share in the insurer's surplus.
What kind of policy is this? - answer Participating
A participating company is also referred to as which type of insurer? - answer Mutual
insurer
Which of the following is NOT a benefit of insurance? - answer 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? - answer Reinsurance
Which of the following is an insurer established by a parent company for the purpose of
insuring the parent company's loss exposures? - answer Captive insurer
Which of the following is a type of insurance where an insurer transfers loss exposures
from policies written for its insureds? - answerReinsurance
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? - answerPrimary insurer
An insurer owned by its policyholders is called a - answerMutual insurer
One important function of an insurance company is to identify and sell to potential
customers. Which of these BEST describes this function? - answerMarketing
Which of the following is a contract that involves one party which indemnifies another
when a loss arises from an unknown event? - answerInsurance Policy
A situation in which there is ONLY a chance of loss or no loss is a - answerPure Risk
Which of the following is NOT an element of an insurable risk? - answerLoss must be
catastrophic
,An insurer having a large number of similar exposure units is considered important
because - answerthe 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? -
answerLoss exposure
Which of the following is any situation that presents the possibility of a loss? -
answerLoss exposure
All of the following circumstances must be met for loss retention to be an effective risk
management technique, EXCEPT - answerProbability of loss is unknown
Which of the following is NOT considered a definition of risk? - answerThe cause of a
loss
Which of the following refers to a condition that may increase the chance of loss? -
answerHazard
Which of the following is a situation where there is a possibility of either a loss or a
gain? - answerSpeculative risk
Which of the following best describes the statement "The more times an event is
repeated, the more predictable the outcome becomes"? - answerLaw of Large numbers
Which of the following is NOT considered to be a definition of the term "loss"? -
answerProbability that an event will occur
Which of these statements correctly describes risk? - answerPure risk is the only
insurable risk
A hazard can be best described as - answera 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? - answerMoral hazard
Which of the following would NOT be accomplished with the purchase of an insurance
policy? - answerRisk is eliminated
Which of the following statements correctly describes a contract of indemnity? -
answerOne 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? - answerRescinding the contract
, Reasonably necessary acts that an agent must perform for carrying out his/her
expressly authorized duties are covered by an agent's - answerImplied authority
Which of the following is NOT a requirement of a contact? - answer-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? -
answerFiduciary
Which statement is CORRECT when describing a contract of adhesion? -
answerContract 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"? - answerIndemnity contract
Which of the following contracts is defined as "one that restores an injured party to the
condition that was present before the loss"? - answer
Which of the following contracts is defined as "one that restores an injured party to the
condition that was present before the loss"? - answerIndemnity contract
A contract requires - answer
Which of the following contracts is defined as "one that restores an injured party to the
condition that was present before the loss"? - answerIndemnity contract
A contract requires - answer
Who does a life settlement broker represent? - answerIndividual 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? - answerPresentation of policy
features that includes non-guaranteed elements
When handling premiums for an insured, an agent is acting in which capacity? -
answerFiduciary
Anyone employed in California to assist an insurance agent in transacting insurance is
called an insurance - answerSolicitor
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