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Contracts / Policies
Ga P & C Insurance Exam - Contracts / Policies
| Question | Answer |
|---|---|
| What validates that someone (i.e. contractor) has current insurance coverage? | Certificate of insurance |
| What are the four essential elements of a contract? | 1. Offer & Acceptance 2. Consideration 3. Legal Purpose 4. Competent parties (legal capacity) |
| In an insurance policy, which party makes the offer and how? | insured makes offer by applying for ins. & paying premium |
| In an insurance policy, which party accepts an offer and how? | insurer accepts the offer (appl) by issuing the policy |
| What is the term for an oral or written interim insuring agreement? | Binder |
| Id an insurer issues a binder, do they have to subsequently issue the insured a policy? | No |
| In contract law what is the definition of consideration? | something of value exchanged by the parties to the contract |
| What is the applicant's consideration in an insurance policy? | statements made on appl and premium |
| What is the ins. co.'s consideration in an insurance policy? | promise to pay benefits in event of loss |
| The legal purpose section of a contract (i.e. ins. policy) simply establishes what? | that the activity insured is a legal activity |
| What type of contract implies one party acting in exchange for a promise from the other party? | unilateral |
| What type of contract implies both parties making a promise to one another? | bilateral |
| What type of contracts are insurance policies? | unilateral |
| What type of contract implies one party draws contract language and the other party agrees to, accepts and adheres to the terms? | contract of adhesion |
| An ins. policy is a personal contract which implies what? | ins. co. cannot reassign policy to someone else |
| What are the six parts of an insurance policy? | 1. Declarations page 2. Insuring agreement 3. Conditions 4. Exclusions 5. Endorsements 6. Key Definitions |
| What is the second main part of an ins. policy and what are the two types? | Insuring Agreement 1. Named perils 2. All risk |
| In which part of an ins. policy are the policy cancellation procedures listed? | conditions |
| In which part of an ins. policy do you list changes or modifications to a policy? | endorsements |
| What is the term for statements on an appl. for ins. made by an applicant that he /she believes are true? | representations |
| What is the term for statements on an appl. for ins. made by an applicant that MUST be true and caan result in a policy cancellation if false? | warranties |
| What is the term for the willful failure on part of the insured to disclose relevant facts on an appl. for ins.? | concealment |
| What is the term for lying on an appl. by applicant for ins.? | misrepresentation |
| Which is easier to prove in court/ more certain to result in policy cancellation supported by court decision- concealment or misrepresentation? | misrepresentation (harder to prove concealment was willful) |
| What is the term for an insured taking advantage of an ins. policy illegally for financial gain? | fraud |
| What must be the same in a binder and the subsequent issued ins. policy? | named insured, coverages, premiums, deductibles, etc |
| What are the min. and max. time periods for a binder to be valid? | min = 30 days max = 90 days |
| What is the name of the ins. provision that states an ins. agent's oral statements cannot alter the written contract drawn by ins. co? | parole evidence rule |
| What is the term for people in a position of trust? | fiduciaries |
| What is the term for a party to a contract giving up a known right? | waiver |
| Once an ins. co. mails a policy RENEWAL to an insured, what must happen for that renewal to be subsequently denied before the end of the policy term? | insured must violate contract |
| In the ins. industry, who is the producer representing the ins. co.? What are the two types? | Agent 1. captive 2. independent |
| What type of ins. agent represents only one co. and does NOT own his/ her clients' business? (example?) | captive |
| What type of ins. agent can represent more than one company and DOES own his/ her clients' business? | independent |
| In the ins. industry, who is the producer representing the insured? | broker |
| What type of insured entity uses ins. brokers to represent their interests? | large companies |
| What type of account must agents deposit premium payments and what is the term for failing to do so? | business acct. (commingling) |
| If an agent collects $ from a customer and the $ goes missing, then who is responsible: the ins. co. or ins. agent? | Agent |
| What is the term for powers specifically expressed in an ins. agreement (i.e. power to collect premium)? | Expressed authority |
| What is the term for powers NOT specifically expressed in an ins. agreement but are implied by the contract? | Implied authority |
| What is the term for when an agent tells insured something disallowed by an ins. contract, but the client believes the agent has legal authority for the statements? | Apparent authority |
| What is an aleatory contract (i.e. ins policy)? | contract where performance of contracted duties depends on the occurrence of an uncertain event (loss) |
Created by:
jkbick
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