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Unit1
Question | Answer |
---|---|
Purchasing insurance is an example of what type of risk management? | TRANSFER |
Transferring is a method of handling risk. Which of the following best describes the concept of transfer? | PURCHASING INSURANCE |
What is the term for an individual who occupies a position of trust when handling the financial affairs of another? | Fiduciary |
Faulty wiring causes a fire that destroys a building. The faulty wiring is considered to be? | A Hazard |
A chance, possibility, or uncertainty of loss is known as a | Risk |
A condition or situation that presents a possibility of loss is | An Exposure |
What is the actual cause of a loss? | Peril |
Which of the following is NOT an element of an insurable risk? | The Loss Must Be Catastrophic |
Which one of the following statements pertaining to risk is NOT correct? | A stock Market Venture Is An Example Of A Pure Risk |
The insurer of an insurance company is known as a? | Reinsurer |
Which of the following statements about risk retention groups is NOT true? | An RRG typically writes workers' compensation insurance for its members. |
With regard to insurance, risk can be defined as? | Uncertainty of financial loss |
An agent in the XYZ Insurance Company, equipped with business cards, sample XYZ policies, and an XYZ rate book, informs a prospect that XYZ has given him unlimited binding authority. The prospect assumes this true. Given the prospects assumption, which of the following correctly defines the agent's authority in this case? | Apparent |
Fire would be an example of a? | Peril |
The agent has many responsibilities to the applicant. One involves a trust relationship between the agent and the insured regarding the insured's finances and confidentiality. In this case, the agent acts in what capacity? | Fiduciary |
Robert and Carolyn live in a busy city and decides that the solution to not getting into a car accident is to avoid riding in or owning a car. Which of the following methods describes this philosophy? | Avoidance |
An insurance company that sells insurance only to people who meet specific membership requirements is known as what kind of insurance? | Fraternal |
Which of the following statements pertaining to insurance companies is CORRECT? | The primary purpose of a stock company is to earn profit for its stockholders. |
Which one of the following is NOT an agent responsibility? | Prepaying the initial premium |
Who represents the insurance company and is and direct link between the company and the insureds? | An insurance agent |