CA Life, Accident, & Health Practice Exam Questions With Complete Solutions Why would a large manufacturer choose to self-insure rather than buy an insurance policy from an insurance company? - Correct Answers ✅to save insurance premiums by paying relatively minor losses out of company funds The federal Risk Retention Act of 1986 contains guidelines for which of the following entities? - Correct Answers ✅Risk retention groups Which of the following is an example of an unauthorized insurance company in Illinois? - Correct Answers ✅Company B, an Iowa-based company that does not hold a certificate of authority in Illinois and sells products that are not approved by the Illinois insurance department Which insurance company function calculates company mortality and morbidity rates as well as the dividends on participating life insurance policies? - Correct Answers ✅Actuarial Division The purpose for the Buyer's Guide, which must be given to every insurance prospect in the first meeting with a producer,
is to: - Correct Answers ✅explain the general features,
benefits, and conditions of the type of insurance being considered 1 / 4
CA Life, Accident, & Health Practice Exam Questions With Complete Solutions The purpose for the Policy Summary, which must be given to every insurance applicant before an application is signed, is
to: - Correct Answers ✅provide buyers with details of the
specific insurance contract they are considering for purchase The main purpose for errors and omissions insurance (E&O) is
to: - Correct Answers ✅cover damages that arise due to
services a producer non-willfully failed to render (does not protect against willful misconduct, and will not protect the producer who willfully engages in an unfair trade practice) Though not specifically cited in the producer's contract, the producer is expected to telephone prospects on the insurer's behalf to arrange sales appointments. This is an example of what kind of producer authority? - Correct Answers ✅implied authority Jerry owns a life insurance policy with premiums payable directly to the insurer's home office. However, for the past five years Jerry has sent his payments to his agent, who then forwards them to the insurer. The insurer had accepted this arrangement but then tries to cancel Jerry's policy when it learns he had died while the premium was being forwarded by the agent. The insurer will probably not be able to cancel the policy in this case because of which of the following legal principles? 2 / 4
CA Life, Accident, & Health Practice Exam Questions With Complete Solutions misrepresentation waiver estoppel fraud - Correct Answers ✅estoppel (In this case, the insurance company has allowed Jerry to send payments to his agent instead of directly to the home office for more than five years. As a result, the insurer has given up its right to have payments sent to the home office.The insurer is estopped from later asserting its right to receive direct payment.) An applicant for a $500,000 whole life insurance policy pays the initial premium along with his application. In this case, what has the applicant done?accepted an offer from the insurer made a counteroffer to the insurer accepted a counteroffer from the insurer made an offer to the insurer - Correct Answers ✅made an offer to the insurer 3 / 4
CA Life, Accident, & Health Practice Exam Questions With Complete Solutions Ambiguities in an insurance contract are most often interpreted in favor of the policyowner because insurance
contracts are:
unilateral conditional contracts of adhesion aleatory - Correct Answers ✅contracts of adhesion For a life insurance contract to be enforceable, which of the following parties must be legally competent?insurer applicant, insurer, and beneficiary applicant and insurer applicant - Correct Answers ✅applicant and insurer Specific to California, what does the term "twenty-four hour coverage" refer to?-joint issue of a workers' compensation policy with non- occupational health insurance coverage -a policy that is guaranteed to be issued within 24 hours of application
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