Question 1

CFP stands for:

Accepted Answer

A) Chartered Financial Planner 
B) Certified Financial Planner 
C) Casualty Finance Professional 
D) Claims and Financial Planner 
A) Chartered Financial Planner 
B) Certified Financial Planner 
C) Casualty Finance Professional 
D) Claims and Financial Planner B

Question 2

CPCU stands for:

Accepted Answer

A) Certified Property and Casualty Underwriter 
B) Claims, Property, and Casualty Underwriter 
C) Chartered Property Casual Underwriter 
D) Chartered Professional Claims Underwriter 
A) Certified Property and Casualty Underwriter 
B) Claims, Property, and Casualty Underwriter 
C) Chartered Property Casual Underwriter 
D) Chartered Professional Claims Underwriter C

Question 3

All the following are requirements for perfect competition except:

Accepted Answer

A) a well-established regulatory environment 
B) numerous sellers, each holding a small market share 
C) numerous well-informed consumers 
D) a homogeneous, perfectly substitutable product 
A) a well-established regulatory environment 
B) numerous sellers, each holding a small market share 
C) numerous well-informed consumers 
D) a homogeneous, perfectly substitutable product A

Question 4

What is the purpose of an automobile insurance plan. How does an auto plan generally work?

Accepted Answer

The purpose of an automobile insurance p

Question 5

Which of the following is a primary reason that insurance consumers are not well-informed?

Accepted Answer

A) insurers have not made much effort to inform consumers 
B) the rewards of making informed decisions are not worth the cost of obtaining the needed information 
C) state insurance regulators do not provide the needed information 
D) insurance prices are so low that most consumers do not care to be informed 
A) insurers have not made much effort to inform consumers 
B) the rewards of making informed decisions are not worth the cost of obtaining the needed information 
C) state insurance regulators do not provide the needed information 
D) insurance prices are so low that most consumers do not care to be informed

Question 6

The text suggests that insurance consumers should:

Accepted Answer

A) inform themselves about the company, policy, etc. to protect their own self interest 
B) rely on government regulation to protect their interest, since insurance companies and policies cannot be understood by the public 
C) rely on attorneys and the lawsuit process to protect themselves 
D) rely on self regulation of insurance companies and the insurer's goodwill to protect their interest 
A) inform themselves about the company, policy, etc. to protect their own self interest 
B) rely on government regulation to protect their interest, since insurance companies and policies cannot be understood by the public 
C) rely on attorneys and the lawsuit process to protect themselves 
D) rely on self regulation of insurance companies and the insurer's goodwill to protect their interest

Question 7

Briefly explain the role of the courts and the law in providing consumer protection relative to insurance products.

Accepted Answer

A great amount of consumer protection is

Question 8

The insurance markets structure has no major flaws.

Accepted Answer

A) True 
 B)False

Question 9

David and Kathy have asked you about A.M.Best Reports services. They specifically want to know if there are any criticisms of Best's and other rating agencies. You would be correct if you told them:

Accepted Answer

A) all the agencies tend to agree on the ratings for a given company, so it's difficult to compare them 
B) ratings are merely estimates, and are no guarantee that the future of the insurer will remain the same 
C) it only takes one letter grade to sum up the condition of a company 
D) the ratings firms have almost never made mistakes in their assessments of companies, so they're due to make one any time now 
A) all the agencies tend to agree on the ratings for a given company, so it's difficult to compare them 
B) ratings are merely estimates, and are no guarantee that the future of the insurer will remain the same 
C) it only takes one letter grade to sum up the condition of a company 
D) the ratings firms have almost never made mistakes in their assessments of companies, so they're due to make one any time now

Question 10

Mr.Murray has asked you to help him choose an insurance company. Which of the following criteria would you not recommend that he take into consideration?

Accepted Answer

A) insurers financial strength 
B) insurers claims service 
C) insurers service both before and after a loss 
D) the recommendation of at least two different insurance agents 
A) insurers financial strength 
B) insurers claims service 
C) insurers service both before and after a loss 
D) the recommendation of at least two different insurance agents

Question 11

The individual consumer must ultimately deal with several issues to make an efficient purchase in the insurance market. Which of the following generally should not be a major consideration?

Accepted Answer

A) the type of policy covering the exposure(s) 
B) the maximum amount of insurance coverage 
C) the commission the agent will receive from the sale 
D) the insurance agent's expertise 
A) the type of policy covering the exposure(s) 
B) the maximum amount of insurance coverage 
C) the commission the agent will receive from the sale 
D) the insurance agent's expertise

Question 12

The A.M.Best Company can help you to determine which of the following about your insurer?

Accepted Answer

A) Its reputation for settling claims 
B) Its customer service rating 
C) How many complaints have been filed against it 
D) Its financial strength rating 
A) Its reputation for settling claims 
B) Its customer service rating 
C) How many complaints have been filed against it 
D) Its financial strength rating

Question 13

Automobile insurance plans,also known as assigned risk plans,are designed to give discounts to good drivers who have had no insurance claims or motor vehicle tickets for at least three years.

Accepted Answer

A) True 
 B)False

Question 14

Prior to September 11,2001,property insurance policies:

Accepted Answer

A) covered terrorism 
B) excluded terrorism from coverage 
C) covered war 
D) were very expensive 
A) covered terrorism 
B) excluded terrorism from coverage 
C) covered war 
D) were very expensive

Question 15

Comparison shopping for insurance is generally not worthwhile since very little price variation is found in either life or property insurance.

Accepted Answer

A) True 
 B)False

Question 16

In choosing an insurance company,the most important factor is

Accepted Answer

A) how many dollars it pays for claims 
B) the amount of liquid assets the insurer has 
C) its financial strength 
D) the state in which it is domiciled 
A) how many dollars it pays for claims 
B) the amount of liquid assets the insurer has 
C) its financial strength 
D) the state in which it is domiciled

Question 17

All the following are true concerning FAIR (Fair Access to Insurance Requirements)plans except:

Accepted Answer

A) are one possible solution to the insurance availability problem 
B) are found in only four states 
C) are designed to deal with unavailability of property insurance 
D) have not been profitable in most states most years 
A) are one possible solution to the insurance availability problem 
B) are found in only four states 
C) are designed to deal with unavailability of property insurance 
D) have not been profitable in most states most years

Question 18

FAIR plans guarantee insurance to all applicants

Accepted Answer

A) True 
 B)False

Question 19

Which of the following Latin terms means "to stand by decisions," and conveys the idea that court decisions set precedents?

Accepted Answer

A) res ipsa loquitur 
B) stare decisis 
C) ab initio 
D) in hoc stare 
A) res ipsa loquitur 
B) stare decisis 
C) ab initio 
D) in hoc stare

Question 20

In most states the insurance commissioner is:

Accepted Answer

A) republican 
B) democrat 
C) appointed 
D) elected 
A) republican 
B) democrat 
C) appointed 
D) elected

Exam 6: the Insurance Market: the Economic Problem

CFP stands for:

CPCU stands for:

All the following are requirements for perfect competition except:

What is the purpose of an automobile insurance plan. How does an auto plan generally work?

Which of the following is a primary reason that insurance consumers are not well-informed?

The text suggests that insurance consumers should:

Briefly explain the role of the courts and the law in providing consumer protection relative to insurance products.

The insurance markets structure has no major flaws.

David and Kathy have asked you about A.M.Best Reports services. They specifically want to know if there are any criticisms of Best's and other rating agencies. You would be correct if you told them:

Mr.Murray has asked you to help him choose an insurance company. Which of the following criteria would you not recommend that he take into consideration?

The individual consumer must ultimately deal with several issues to make an efficient purchase in the insurance market. Which of the following generally should not be a major consideration?

The A.M.Best Company can help you to determine which of the following about your insurer?

Automobile insurance plans,also known as assigned risk plans,are designed to give discounts to good drivers who have had no insurance claims or motor vehicle tickets for at least three years.

Prior to September 11,2001,property insurance policies:

Comparison shopping for insurance is generally not worthwhile since very little price variation is found in either life or property insurance.

In choosing an insurance company,the most important factor is

All the following are true concerning FAIR (Fair Access to Insurance Requirements)plans except:

FAIR plans guarantee insurance to all applicants

Which of the following Latin terms means "to stand by decisions," and conveys the idea that court decisions set precedents?

In most states the insurance commissioner is:

Fundamentals and Terminology

Defining the Insurable Event

Risk Management

Financial Services Companies

Insurance Occupations

Insurance Regulation

Insurance Contracts

Basic Property and Liability Insurance Contracts

Homeowners Insurance

the Personal Auto Policy

Professional Financial Planning

Life Insurance Policies

Standard Life Insurance Contract Provisions And Options

Annuities

Medical Expense and Disability Insurance

Advanced Topics in Risk Management

Commercial Property Insurance

Commercial Liability Insurance

Bonding,Crime Insurance and Reinsurance

Employee Benefits

Social Security

Unemployment and Workers Compensation Insurance

Filters