CLAHS California Life, Accident and Health or Sickness Examination - Set 1 - Part 2

Test your knowledge of technical writing concepts with these practice questions. Each question includes detailed explanations to help you understand the correct answers.

Question 21: An applicant applies for coverage, and the insurer responds by issuing a policy with a higher premium and an added exclusion. The insurer's response is best described as which of the following?

An unconditional acceptance

A valid waiver

An implied warranty

A counteroffer

Question 22: Because the insurer alone drafts the wording of a policy, any genuine ambiguity in that wording is generally interpreted in whose favor?

The insurer that wrote it

The state insurance guarantee fund

The insured or beneficiary

Neither party until a court rewrites it

Question 23: One insured pays a small premium yet soon collects a far larger benefit, because the payout depends on an uncertain event. This describes which characteristic?

Aleatory

Unilateral

Conditional

Personal

Question 24: An insurance policy is described as a unilateral contract because of which of the following?

Both parties exchange enforceable promises

The insured must continue paying premiums

Only the insurer makes an enforceable promise

The contract can be freely assigned

Question 25: Under the California Insurance Code, the written instrument in which a contract of insurance is set forth is known by which term?

The application

The policy

The rider

The binder

Question 26: Under the California Insurance Code, the neglect to communicate something that a party knows and ought to communicate is defined as which of the following?

Warranty

Estoppel

Concealment

Subrogation

Question 27: Under the California Insurance Code, which of the following need a party NOT communicate to the other, even when directly asked about it?

Information of the party's own judgment

A known material change in health

A fact the insurer specifically inquires about

The existence of other coverage

Question 28: On most life and health insurance applications, the answers an applicant provides are generally treated under California practice as which of the following?

Express warranties

Implied warranties

Conditions precedent

Representations

Question 29: An applicant concealed a serious heart condition but later died in an unrelated car accident. Under the California rule, how is the materiality of that concealment determined?

By whether the fact caused death

By the size of the death benefit

By its probable influence on underwriting

By the policy's time in force

Question 30: Under the California Insurance Code, concealment entitles the injured party to rescind the insurance under which of the following circumstances?

Only if the concealment was intentional

Whether the concealment was intentional or unintentional

Only if a warranty was also breached

Only if the loss has already occurred

Question 31: The California Insurance Code lists the specifications every insurance policy must contain. Which of the following is NOT one of those required specifications?

The financial rating of the insurer

The parties to the contract

The period of coverage

The risks insured against

Question 32: An insurer markets its policies only through television, mail, and its website, with no producer involved in the sale. This distribution method is known as which of the following?

The independent agency system

The captive agency system

The general agency system

Direct response

Question 33: A producer in San Diego tells a client a policy covers a treatment it actually excludes, and the client reasonably relies on that statement. The insurer may be bound under which type of authority?

Express authority

Fiduciary authority

Apparent authority

Statutory authority

Question 34: The authority explicitly granted to a producer in writing through the agency agreement with the insurer is known as which type of authority?

Express authority

Implied authority

Apparent authority

Assumed authority

Question 35: Under the California Insurance Code, an insurance broker transacts insurance on behalf of which party?

The insurer

The insured

The Insurance Commissioner

The guarantee association

Question 36: A prospect asks an applicant about obtaining an accident and health solicitor license in California. How should the applicant respond?

It requires twelve hours of training

It is issued only to brokers

It must be renewed every two years

No such license exists in California

Question 37: Under the California Insurance Code, the accident and health or sickness agent license authorizes the licensee to transact coverage for which of the following?

Real and personal property

Automobile liability

Sickness, bodily injury, or accidental death

Workers compensation only

Question 38: Under the California Insurance Code definition of transact, which of the following activities, standing alone, requires an insurance license?

Solicitation of insurance

Printing a company brochure

Designing a policy form

Auditing an insurer's reserves

Question 39: Under the California Insurance Code, a person who transacts insurance without a valid license is guilty of which of the following?

A felony with mandatory prison

A licensing fee surcharge only

A civil violation with no criminal penalty

A misdemeanor with fine, jail, or both

Question 40: A producer in Sacramento deposits client premiums into the producer's personal checking account for a few days before remitting them. This handling of trust funds is known as which of the following?

Coinsurance

Commingling

Subrogation

Rebating

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