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6) If a doctor, who is the agent an insurance company, makes a…
6) If a doctor, who is the agent an insurance company, makes a mistake on an insurance application, what is the most likely result under agency law?
A) The company is bound to the mistake even if they would not have issued the policy as they did had the mistake had not been made.
B) The doctor would be liable because it was his mistake.
C) The company is bound only if the doctor was not a licensed physician
D) The company would not be bound under any circumstance where an agent makes a mistake critical to acceptance of an application.
7) When an action which is otherwise unauthorized is validated because an individual is a purported agent such validation is known as
A) Reasonable belief
B) Implied authority
C) Actual authority
D) Ratification
8) An insurance agent is authorized to act on behalf of a principal in all of the following ways EXCEPT:
A) collect the first premium due on a policy
B) collect renewal premium due on a policy
C) solicit insurance sales for the company
D) sometimes the agent can pay the premium for an applicant in exchange for a promissory note.
9) If an applicant and an insurance agent conspire to defraud an insurance company by putting false information on an application, it is known as
A) Collusion
B) Waiver
C) Estoppel
D) Forbidden Condition
10) Under the Doctrine of Election, an individual
A) must decide whether or not to file suit against an insurance company within 1 year from a perceived injury.
B) can select as many legal remedies for injury asthe law allows.
C) must decide between two inconsistent remedies
D) must decide on a single remedy when two or more inconsistent remedies are present.
11) Mr. Ashton applies for life insurance and the company offers him a life contract. Mr. Ashton writes to the company that he will take the policy if he can have a 10% discount on the premium quoted in the policy. Mr. Ashton’s action is
A) a counteroffer and, if he dies before the company responds to his request, he will still be insured as long as he paid the original premium requested.
B) not allowed under the insurance laws of most states
C) a counteroffer and the offer by the insurance company to give him a policy is terminated.
D) simply a request and does not terminate the offer of the insurance company to insure him.
12) When an insurance company delays in rejecting or accepting an application, the majority view of most courts is
A) silence or inaction does not constitute automatic acceptance.
B) delay implies acceptance
C) delay implies rejection
D) the company will be liable for the death benefit if the applicant dies prior to underwriting.
13) Requiring a premium to be paid before insurance coverage is extended is a
A) Condition precedent B) Condition subsequent C) Conditional receipt D) Binding Receipt
