Alabama State Licensing Exam Property and Casualty a company in chartered in Guam or Puerto Rico doing regular business in new York would be considered by new yorkers to be a 4 international company verified answer 2 foreign company If a company cancels an auto policy mid term the refund will be made on a 1 domestic company 2 foreign company 3 alien company 1 Pro rata basis 2 short rate basis 3 retroactive basis 1 cancellation 2 non renewal 3 separation 4 exclusion verified answer 2 non renewal Which is the best example of an indirect loss 1 sequential loss 4 coinsurance basis verified answer 1 pro rata basis What is the term used to describe terminating the insurance relationship at the end of the policy period 2 liability loss 3 employee theft 4 loss of use verified answer 4 loss of use Which is a two party contract 1 property 2 casualty 3 liability 4 auto verified answer 1 Property Insurance contracts offsets 1 speculative risk 2 pure risk 3 gambling 4 created risk verified answer 2 pure risk Which of the following is a third party contact 1 property 2 casualty 3 earthquake 4 theft verified answer 2 casualty Risk is best defined as 1 chance of loss 2 certainty of loss 3 financial loss 4 sentimental loss verified answer 1 chance of loss being subjects to a loss is 1 liability 2 indemnity 3 exposure 4 subornation verified answer 3 exposure the ranking insured in a personal line contract is the 1 named insured 2 first named insured 3 mortgagee 4 husband verified answer 1 first named insured To be paid a claim under a P C contract insurable interest must exist 1 at the time of application 2 on the policy date 3 at the time of loss 4 at the time of claim settlement verified answer 3 at the time of loss this type of company is run for the benefit of the policy owners 1 stock 2 mutual 3 foreign 4 alien verified answer 2 mutual Ohio casualty is doing regular business in Indiana Within the state of Indiana Ohio casualty would be considered a Ohio casualty is doing regular business in Indiana Within the state of Indiana Ohio casualty would be considered a 1 domestic company 2 non admitted company 3 alien company 4 foreign company verified answer 4 Foreign company 1 admitted company 2 non admitted company 3 unauthorized company 4 risk retention group verified answer 1 admitted company EXCLUSION of a P C policy are verified answer Catastrophic earthquake war or nuclear Predictable wear n tear Covered elsewhere auto isn t covered by auto Stock Companies verified answer An insurance company known as a stock company is structured like in most US corporations Mutual Companies verified answer Mutual companies have no stockholders Fraternal Benefit Societies verified answer Fraternal Benefit Societies or Fraternal Associations are non profit mutual aid organizations that engage primarily in charitable or benevolent activities They offer their members insurance against death disease and disability Risk Retention Group verified answer Many States allow this form of group self insurance for business liability risk Lloyd s Association verified answer Lloyd s is not a company P C producers needs to know the 4 main channels of policy distribution verified answer 1 DIRECT WRITERS are exclusive captive producers or employees of the company they represent 2 EXCLUSIVE AGENT contracts with one company that is wishes to represent 3 INDEPENDENT AGENCY contracts with many companies on a non exclusive basis 4 DIRECT RESPONSE COMPANIES greatly reduce the importance of the producer agent these companies solicit clients on TV and the internet and then hire licensed telemarketers to respond to the inquires Power of producers verified answer 1 Expressed Authority 2 Implied Authority 3 Apparent Authority Expressed Authority verified answer These are the powers specifically expressed in your agency contracts the power to collect the premium for example Implied Authority verified answer There are certain duties that may not be specified in your agency agreement but are implied by the contract Apparent Authority verified answer Authority that is only apparent not real In agency law a person may be deemed to have had the power to act as an agent for another party if the other party s manifestations to a third party led the third party to believe that an agency existed when in fact it did not With regards to insurance the term consideration means 1 the premium and the statement on the application 2 the insured d methods of evaluating the applicant for coverage 3 the screening process all agents undergo prior to licensing 4 the side by side policy comparison by the applicant verified answer 1 the premium and the statement on the application Which of the following terms indicates contracts the applicant must accept the contract as written this type of contract is referred as a 1 adhesion 2 unilateral 3 conditional 4 aleatory verified answer 2 unilateral In purchasing an insurance contract the applicant must accept the contract as written this type of contract is referred to as 1 settle contract 2 aleatory contract 3 contract of adhesion 4 personal contract verified answer 3 contract of adhesion Which of the following principles states that in forming an insurance contract both parties have a responsibility to the other 1 doctrine of warranties 2 doctrine of representation 3 doctrine of utmost good faith 4 doctrine of reasonable expectations verified answer 3 doctrine of utmost good faith An incorrect statement made intentionally on a personal auto insurance application is a 4 concealment verified answer 3 misrepresentation 1 fraud 2 warranty 3 misrepresentation A binder is a 1 interim insuring agreement 2 application 3 counteroffer 4 endorsement verified answer 1 interim insuring agreement Which of the following is NOT true regarding consideration in a P C policy 1 part of the insured consideration is the premium 2 parts of the insured s considerations are the statements on the application 3 parts of the company s consideration are the promises in the policy 4 parts of the company s consideration is the payment of a claim verified answer 4 parts of the company s consideration is the payment of a claim Any ambiguities in a P C policy will be resolved in favor of the policy owner because the policy is a 1 contract of adhesion 2 conditional contract 3 unilateral contract 4 aleatory contract verified answer 1 contract of adhesion A person who has responsibility for the financial well being of another 1 accountant 2 attorney