CLAHS California Life, Accident and Health or Sickness Examination - Set 1 - Part 3

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

Question 41: A producer carries errors and omissions insurance. Which of the following situations would generally fall OUTSIDE the protection that coverage provides?

Negligently failing to submit an application

Accidentally misstating a policy benefit

Intentionally defrauding a client of premium

Overlooking a needed coverage recommendation

Question 42: Under the California Insurance Code, an insurer that is entitled to transact insurance in California, having complied with the conditions the law imposes, is described as which of the following?

Admitted

Alien

Domestic

Reciprocal

Question 43: An insurer organized under the laws of a country other than the United States and doing business in California is classified as which of the following?

A domestic insurer

A foreign insurer

A fraternal insurer

An alien insurer

Question 44: The California Life and Health Insurance Guarantee Association protects policyholders when an insurer becomes insolvent. Coverage from which type of insurer is generally NOT protected by the association?

An admitted stock insurer

An admitted mutual insurer

A non-admitted surplus line insurer

An admitted fraternal insurer

Question 45: A mutual insurer returns part of its divisible surplus to the policyowners who own the company. These distributions are issued on participating policies and are generally treated in what way for tax purposes?

As fully taxable interest income

As a non-taxable return of premium

As a taxable capital gain

As taxable wages to the insured

Question 46: Within an insurance company, the division that uses statistics and the law of large numbers to calculate premium rates and set reserves is which of the following?

The claims division

The marketing division

The underwriting division

The actuarial division

Question 47: In California, how does a person become the Insurance Commissioner who heads the Department of Insurance?

The person is elected by the people

The Governor appoints the person

The Legislature selects the person

Insurers vote the person into office

Question 48: The California Unfair Practices Act prohibits acts such as twisting and false advertising in the business of insurance. Who has authority to enforce the Act?

Any consumer through a private lawsuit

The federal Department of Insurance

Only the Insurance Commissioner

The county district attorney alone

Question 49: Under the Fair Claims Settlement Practices Regulations, when an insurer denies a claim in whole or in part, the denial must take which of the following forms?

An oral explanation by phone is sufficient

No explanation is required

A note in the claim file

A written denial stating the specific reasons

Question 50: In a reinsurance arrangement, the insurer that issued the original policy and transfers part of its risk to another insurer is known as which of the following?

The excess insurer

The ceding company

The retrocessionaire

The guarantee association

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