test 3

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riosjuank
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231804
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test 3
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2013-09-04 00:39:55
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test 3
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  1. 1. The authority that an insurer gives to its agent by means of the agent's contract is known as

    A. implied authority
    B. fiduciary responsibility
    C. general authority
    D. express authority
    D. express authority
    (this multiple choice question has been scrambled)
  2. 2. Which of the following statements about authority is NOT correct? 

    A. Express authority is granted by means of the agent's contract.
    B. Express authority is determined by a principal's conduct.
    C. Implied authority is not overtly extended to the agent's contract, but does permit many of the agent's operations.
    D. Apparent authority can be assumed from the actions of the principal.
    B. Express authority is determined by a principal's conduct.
    (this multiple choice question has been scrambled)
  3. 3. An insurance company has how many years to challenge the validity of a life insurance contract?

    A. four
    B. three
    C. one
    D. two
    D. two
    (this multiple choice question has been scrambled)
  4. 4. Bob and Tom enter into a contract in which Bob agrees to fraudulently induce sick people to sell theirinsurance contracts to Tom's company. Bob and Tom's contract can best be described as

    A. void
    B. competitive
    C. voidable
    D. conditional
    A. void
    (this multiple choice question has been scrambled)
  5. 5. An insurer is considered competent if it

    A. follows the Code of Ethics of the state Office of Insurance Regulation
    B. Is registered with NAIC
    C. is licensed or authorized by the state
    D. is registered with the Securities and Exchange Commission
    C. is licensed or authorized by the state
    (this multiple choice question has been scrambled)
  6. 6. Which of the following statements describes an insurable interest?

    A. The policyowner must expect to suffer a loss when the insured dies or becomes disabled
    B. The insured must have a personal or business relationship with the beneficiary.
    C. The policyowner must expect to benefit from the insured's death
    D. The beneficiary, by definition, has an insurable interest in the insured
    A. The policyowner must expect to suffer a loss when the insured dies or becomes disabled
    (this multiple choice question has been scrambled)
  7. 7. Which of the following terms is used for the voluntary relinquishment of a known right?

    A. Waiver
    B. Estoppel
    C. Adhesion
    D. Unilateral
    A. Waiver
    (this multiple choice question has been scrambled)
  8. 8. "An insurance contract is prepared by one party, the insurer, rather than by negotiation between thecontracting parties." Which of the following statements explains this characteristic of insurance contracts?
    A. The insurance contract names only the insurer as the competent party.
    B. The insurance contract is a contract of adhesion.
    C. The insurance contract is an aleatory contract
    D. The insurance contract is a contract of acceptance.
    B. The insurance contract is a contract of adhesion.
    (this multiple choice question has been scrambled)
  9. 9. With life and health contracts, when must an insurable interest exist?

    A. Before the beneficiary is named
    B. After the policy is licensed
    C. At the inception of the policy
    D. While the policy is in force
    C. At the inception of the policy
    (this multiple choice question has been scrambled)
  10. 10. Which of the following statements describe the parol evidence rule?

    A. A written contract cannot be changed once it is signed.
    B. A written contract cannot be changed by oral evidence.
    C. An oral contract cannot be modified by written evidence.
    D. An oral contract takes preference over any earlier written contracts.
    B. A written contract cannot be changed by oral evidence.
    (this multiple choice question has been scrambled)
  11. 11. Which of the following is a distinguishing element of an insurance contract?

    A. Competent parties
    B. Conditional
    C. Offer and acceptance
    D. Consideration
    B. Conditional
    (this multiple choice question has been scrambled)
  12. 12. Which of the following statements regarding the utmost good faith in insurance contracts is CORRECT?

    A.  Although a warranty is a statement, it is not technically part of the contract.
    B. The concept of utmost good faith - that there is no attempt to conceal, disguise, or deceive - applies only to the insurer.
    C. A representation is a statement that the applicant guarantees to be true.
    D. Most state insurance laws consider statements made in an application for an insurance policy to be representations, not warranties.
    D. Most state insurance laws consider statements made in an application for an insurance policy to be representations, not warranties.
    (this multiple choice question has been scrambled)
  13. 13. Which of the following is an example of legal consideration?

    A. Politeness
    B. Legal purpose
    C. Initial premium
    D. Offer and acceptance
    C. Initial premium
    (this multiple choice question has been scrambled)
  14. 14. Competent parties who can enter into insurance contracts are

    a. applicants
    b. trusts and estates
    c. business entities
    d. all of the above
    d. all of the above
  15. 15. Which of the following statements regarding insurable interest is NOT correct?

    A. The applicant must be subject to loss upon the death, illness or disability of the insured.
    B.  A policy obtained by a person without an insurable interest in the insured can be enforced.
    C. Insurable interest exists when the applicant is the insured.
    D. Generally, the person to be insured must give his or her consent before a policy is issued, even if the applicant has an insurable interest.
    B.  A policy obtained by a person without an insurable interest in the insured can be enforced.
    (this multiple choice question has been scrambled)

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