Question 1

The court in Administrative Committee of the Wal-Mart Stores, Inc. Associates' Health and Welfare Plan v. James A. Shank et al., 500 F.3d 834 (8th Cir. 2007) :

Accepted Answer

A)   reversed the trial court upon its review of the subrogation clause in Wal-Mart's employee health care policy
B)   affirmed the trial court upon its review of the subrogation clause in Wal-Mart's employee health care policy
C)   remanded the trial court upon its review of the subrogation clause in Wal-Mart's employee health care policy
D)   None of the choices are correctE) A) and D)
F) All of the above

Question 2

Actuaries are individuals trained in mathematics who use statistical models to calculate the probabilities and loss exposure of particular risks.

Accepted Answer

A) True 
 B)False

Question 3

Personal insurance represents policies related to:

Accepted Answer

A)   life insurance
B)   health insurance
C)   disability insurance
D)   All of the choices are correctE) B) and C)
F) B) and D)

Question 4

An important aspect of insurance regulation is the imposition on insurers of a duty of good faith toward the insured.

Accepted Answer

A) True 
 B)False

Question 5

The goal of the indemnity principle is to reimburse the insured for the losses sustained plus compensatory and punitive damages to third parties.

Accepted Answer

A) True 
 B)False

Question 6

Errors and omissions (E&O)  liability insurance indemnifies the directors and executive officers of a corporation if they breach any of their __________ duties.

Accepted Answer

A)   corporate
B)   mens rea
C)   voir dire
D)   fiduciaryE) C) and D)
F) A) and B)

Question 7

__________ are individuals trained in mathematics who use statistical models to calculate the probabilities and loss exposure of particular risks.

Accepted Answer

A)   Actuaries
B)   Lawyers
C)   Stewards
D)   Head huntersE) A) and C)
F) None of the above

Question 8

The insured transfers the risk of loss to the insurer for a price known as a/an __________.

Accepted Answer

A)   allocation
B)   co-pay
C)   premium
D)   All of the choices are correctE) C) and D)
F) B) and D)

Question 9

Insurance contracts require that the insured demonstrate they have an insurable interest.

Accepted Answer

A)   insurer
B)   insured
C)   corporation
D)   None of the choices are correctE) A) and B)
F) None of the above

Question 10

Legal defense is an important aspect of liability insurance because the costs of defending a lawsuit can be __________.

Accepted Answer

A)   pricey
B)   expensive
C)   substantial
D)   All of the choices are correctE) B) and C)
F) All of the above

Question 11

The requirement that an insured demonstrate an insurable interest has two policy justifications: to prevent parties from engaging in pure speculative gambling with respect to others' assets or liabilities and to reduce __________.

Accepted Answer

A)   expatriate issues
B)   bad judgment
C)   personal liability
D)   moral hazardE) A) and C)
F) All of the above

Question 12

Insurers reduce the chance of a moral hazard by including a __________ on a policy and refusing to insure intentional torts and criminal activity.

Accepted Answer

A)   deductible
B)   obligation
C)   co-pay
D)   None of the choices are correctE) B) and C)
F) None of the above

Question 13

The insured transfers the risk of loss to the insurer for a price known as a co-pay.

Accepted Answer

A) True 
 B)False

Question 14

Once a loss is paid to the insured, __________ gives the insurer the right to pursue a legal claim against the party who caused the loss to the insured.

Accepted Answer

A)   negotiation
B)   subrogation
C)   abrogation
D)   novationE) B) and C)
F) A) and D)

Question 15

An insurable interest is an interest by the insured in the value of what is being insured that arises from a financial or legal relationship.

Accepted Answer

A) True 
 B)False

Question 16

Insurance is largely governed by __________ laws and regulations.

Accepted Answer

A)   state
B)   federal
C)   county
D)   criminalE) None of the above
F) A) and B)

Question 17

Explain the formula for insurance pricing and how the premiums are achieved.

Accepted Answer

To understand how insurance is priced, o...

Question 18

An insurable interest is an interest by the insured in the value of what is being insured that arises from a/an __________ or legal relationship.

Accepted Answer

A)   administrative
B)   financial
C)   personal
D)   adversarialE) None of the above
F) A) and D)

Question 19

Insurance is largely governed by state laws and regulations.

Accepted Answer

A) True 
 B)False

Question 20

When an insured party engages in riskier behavior because he relies on insurance to cover his liability or loss, this is known as a __________.

Accepted Answer

A)   moral hazard
B)   potential liability
C)   management practice
D)   All of the choices are correctE) A) and C)
F) B) and D)

Exam 46: Insurance Law

Once a loss is paid to the insured, __________ gives the insurer the right to pursue a legal claim against the party who caused the loss to the insured.

Correct AnswerverifiedShow Answer

The goal of the indemnity principle is to reimburse the insured for the losses sustained plus compensatory and punitive damages to third parties.

Correct AnswerverifiedShow Answer

Insurance is largely governed by __________ laws and regulations.

Correct AnswerverifiedShow Answer

When an insured party engages in riskier behavior because he relies on insurance to cover his liability or loss, this is known as a __________.

Correct AnswerverifiedShow Answer

Actuaries are individuals trained in mathematics who use statistical models to calculate the probabilities and loss exposure of particular risks.

Correct AnswerverifiedShow Answer

An insurable interest is an interest by the insured in the value of what is being insured that arises from a financial or legal relationship.

Correct AnswerverifiedShow Answer

Personal insurance represents policies related to:

Correct AnswerverifiedShow Answer

The court in Administrative Committee of the Wal-Mart Stores, Inc. Associates' Health and Welfare Plan v. James A. Shank et al., 500 F.3d 834 (8th Cir. 2007) :

Correct AnswerverifiedShow Answer

The insured transfers the risk of loss to the insurer for a price known as a/an __________.

Correct AnswerverifiedShow Answer

__________ are individuals trained in mathematics who use statistical models to calculate the probabilities and loss exposure of particular risks.

Correct AnswerverifiedShow Answer

Legal defense is an important aspect of liability insurance because the costs of defending a lawsuit can be __________.

Correct AnswerverifiedShow Answer

Insurance is largely governed by state laws and regulations.

Correct AnswerverifiedShow Answer

Errors and omissions (E&O) liability insurance indemnifies the directors and executive officers of a corporation if they breach any of their __________ duties.

Correct AnswerverifiedShow Answer

Insurers reduce the chance of a moral hazard by including a __________ on a policy and refusing to insure intentional torts and criminal activity.

Correct AnswerverifiedShow Answer

An insurable interest is an interest by the insured in the value of what is being insured that arises from a/an __________ or legal relationship.

Correct AnswerverifiedShow Answer

The requirement that an insured demonstrate an insurable interest has two policy justifications: to prevent parties from engaging in pure speculative gambling with respect to others' assets or liabilities and to reduce __________.

Correct AnswerverifiedShow Answer

The insured transfers the risk of loss to the insurer for a price known as a co-pay.

Correct AnswerverifiedShow Answer

An important aspect of insurance regulation is the imposition on insurers of a duty of good faith toward the insured.

Correct AnswerverifiedShow Answer

Explain the formula for insurance pricing and how the premiums are achieved.

Correct AnswerverifiedTo understand how insurance is priced, o...View AnswerShow Answer

Insurance contracts require that the insured demonstrate they have an insurable interest.

Correct AnswerverifiedShow Answer

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To understand how insurance is priced, o...
View Answer

Correct Answer
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