pg. 1 California Life and Health Insurance Final Exam/ Actual Exam Questions with Correct Verified Answers/ Latest 2024 – Rated A+
According to California Insurance Code, an "insurance broker" is - Correct Answer - compensated for transacting insurance on behalf of another person with an insurer
The California of Regulations governing claim settlement practices prohibits all of the following acts of unfair discrimination EXCEPT denial of claim based on - Correct Answer - reckless behavior
If an insurer must have its rates accepted by the insurance department prior to using them, the insurer would be operating in which of the following types of jurisdiction? - Correct Answer - Prior approval
the more times an event is repeated, the more predictable the outcome becomes. this is an example of - Correct Answer - the law of large numbers
what rule is used to determine the importance of a representation? - Correct Answer - the materiality of concealment
the increase in the probability of a loss resulting from an insured's dishonest tendencies is known as - Correct Answer - moral hazard
which of the following would an agent be guilty of for misrepresenting the amount of dividends a policy will pay? - Correct Answer - a misdemeanor
a person who acts, offers to act, or assumes to act in a capacity where a license is REQUIRED without having a valid license, is guilty of a - Correct Answer - misdemeanor
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pg. 2 which is an agreement in which an insurer contracts with a third party to insure itself against losses from insurance policies it issues? - Correct Answer - reinsurance
what recourse does an insurer have if violation of a material warranty on the part of the insured is discovered - Correct Answer - recession of the policy
the insurer's department with PRIMARY responsibility for the risk selection process is called: - Correct Answer - underwriting
According to the California Insurance Code, the Commissioner can disapprove a licensee's request to use a fictitious name for any of the following EXCEPT that the - Correct Answer - name is the licensee's actual name
Risk can be defined as all of the following EXCEPT - Correct Answer - the cause of loss
when used in the California Insurance Code, the word "may" is intended to be - Correct Answer - permissive
which of the following statements regarding risk is TRUE - Correct Answer - only pure risks are insurable
what is it called, when an insurer uses higher rates for an individual solely based on religion, race, or ethnic group? - Correct Answer - unfair discrimination
which of the following is a hazard? - Correct Answer - a condition that may increase the likelihood of a loss occurring
as defined in the California Insurance Code, "insurance" is a - Correct Answer - contract
when are parties to a contract REQUIRED to communicate information solely based on personal judgment for a matter in question? - Correct Answer - Never
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pg. 3 Section 1729.2 of the California Insurance Code requires insurance producer applications and licensees to notify the Insurance Commissioner in writing, within _______ days of changes in background information after an application has been submitted or a license has been issued - Correct Answer - 30
How often MUST an insurer file the National Association of Insurance Commissioners (NAIC) financial statement? - Correct Answer - annually
an insurer entitled to transact business by complying with the California Insurance Code is known as an - Correct Answer - admitted carrier
who are the members of the Medical Information Bureau? - Correct Answer - life and health insurers
A person authorized by and on behalf of an insurer who transacts life, disability or life and accident and health insurance is defined as a - Correct Answer - life agent
an insurance solicitor is a person authorized to - Correct Answer - assist a broker or agent in selling insurance
which type of insurer is owned by its policyholders? - Correct Answer - a mutual insurer
it is considered an unfair method of competition for an agent to advertise that the insurer the agent is appointed with is - Correct Answer - a member of the Insurance Guarantee Association
which of the following is an express power given to the agent in an agency agreement? - Correct Answer
- the authority to represent the insurer
a contract that restores an injured party to the condition that was present before the loss is - Correct Answer - an indemnity agreement
a contract in which one party promises to indemnify another against loss that arises from an unknown event is - Correct Answer - an insurance policy
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pg. 4 if you have been convicted of a misdemeanor and the misdemeanor conviction is later expunged pursuant to California Penal Code Section 1203.4, which of the following is true? - Correct Answer - even though your misdemeanor conviction was expunged, you must still disclose your misdemeanor conviction on your individual application for an insurance license
when a person charges an insured a fee to review the insured's existing life policy, what type of license does that person need? - Correct Answer - a life and disability analyst
which of the following would an agent be guilty of for misrepresenting the amount of dividends a policy will pay? - Correct Answer - a misdemeanor
how can partners guarantee a market for their share of the business in the event of death? - Correct Answer - buy-sell agreement
people commonly purchase an annuity to protect against the risk of: - Correct Answer - outliving their financial resources
a life insurance policy written after 1988 that fails to meet the seven-pay test is known as - Correct Answer - a modified endowment contract
which of the following contracts provides benefits that fluctuate automatically with investment results - Correct Answer - variable life insurance
an attempt by an agent to deter an insured from replacing an existing life insurance policy is called - Correct Answer - conservation
what is one difference between group life and individual life underwriting? - Correct Answer - individual life insurance requires the applicant to answer medical questions
which of the following is a characteristic of non qualified annuities? - Correct Answer - tax-deferred earnings
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