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PDF Download KAPLAN P&C EXAM PREP EXAM QUESTIONS Actual Qs and Ans - Expert-Verified Explanation -Guaranteed passing score -35 Questions and Answers
-Format: Multiple-choice / Flashcard
Question 1: Stock insurer
Answer:
is a business formed as a corporation and owned by its stockholders (also known as shareholders.)
Question 2: avoidance
Answer:
eliminating a particular risk by not engaging in a certain activity
Question 3: mutual insurers
Answer:
does not have stock or stockholders. Owned by policyholders (customers)
Question 4: Alien
Answer:
Company is incorporated in another country (in the U.S but the claim is in Guam)
Question 5: fiduciary
Answer:
a person in a position of financial trust
Question 6: express
Answer:
authorities written in agent contracts
Question 7: physical hazard
Answer:
that hazard can be seen (like a wet floor sign)
Question 8: Insurance
Answer:
A contract that transfers risk or financial loss from an individual or business to an insurance company
Question 9: Speculative risk
Answer:
possibly of a loss and the possibility of a gain (ex: Gabling and investing)
Question 10: reinsurance
Answer:
insurance purchased to cover their own (insurance company) exposers to loss
Question 11: transfer
Answer:
the insurance company agrees to pay if the insured has a loss. The insured no longer bears that risk
Question 12: Insurer
Answer:
Insurance company
Question 13: Insured
Answer:
customer
Question 14: Exposure
Answer:
Risk for which insurance companies would be liable
Question 15: Foreign
Answer:
company is incorporated in another state (claim in texas but resides in ohio)
Question 16: Reciprocal insurers
Answer:
unincorporated groups of people that agree to insure each other.
Question 17: moral hazards
Answer:
losses will more likely occur to those who lack morals (likely to put in fake claims that never happened)
Question 18: captive agent
Answer:
represents only one insurance company
Question 19: Peril
Answer:
What causes the loss
Question 20: Indirect loss
Answer:
Consequences from a physical loss (House fire that houses the renters to loose out on monthly payments)
Question 21: Risk
Answer:
Is a possibility that a loss will occur (fire, Theft Car accident Ect)
Question 22: 3rd party
Answer:
insurer (Insurance company)
Question 23: reduction
Answer:
refers to lessening the chances of damages. (having sprinklers in a building during a fire will lessen what gets damaged)
Question 24: sharing
Answer:
when 2 or more individuals or businesses agree to pay a portion of any loss that occurs.
Question 25: apparent
Answer:
take the agent does that a reasonable person would assume as authority
Question 26: fraternal benefit societies
Answer:
must be a member - provide insurance and other benefits.
Question 27: Domestic
Answer:
the state where a company is incorporated (claims in texas and you are n texas)
Question 28: morale
Answer:
leaving the door unlocked when you leave (carelessness from an insured)
Question 29: Lloyds associations
Answer:
not an insurance company. Provide hub for exchange of info among members.
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