Insurance and Financial Services Flashcard

Front

In the context of insurance, what is the promise called when the insured agrees to meet certain conditions, like installing a security system?

Back

A promise made by the insured that certain conditions will be met

Answer explanation

This promise is known as a "promise made by the insured that certain conditions will be met," which refers to Nora's commitment to install and maintain a security system as part of her insurance agreement.

Front

Isla is applying for home insurance. Which action is an example of a representation?

Back

Stating you have a home security system

Answer explanation

Stating you have a home security system is a representation because it is a statement made by Isla that influences the insurer's decision. The other options do not directly represent information about the home.

Front

In insurance terms, what does it represent when someone does not mention a recent medical diagnosis on an application form?

Back

Intentional withholding of material information

Answer explanation

Zoe's decision to omit her medical diagnosis is an example of intentional withholding of material information, as it directly affects the insurer's assessment of risk and coverage.

Front

What is the primary purpose of the process the insurance company uses when determining coverage terms for Emma's health insurance policy?

Back

To assess the risk of insuring a person or entity

Answer explanation

The primary purpose of the insurance company's process is to assess the risk of insuring a person or entity. This evaluation helps determine whether to provide coverage and under what terms.

Front

Which of the following is NOT a source of underwriting information for a life insurance application?

• Privacy notices
• Medical records
• Driving history
• Credit reports

Back

Privacy notices

Answer explanation

Privacy notices are not a source of underwriting information; they inform applicants about their rights and how their information will be used, unlike medical records, driving history, and credit reports, which are used for assessment.

Front

Which law regulates the collection, dissemination, and use of Elijah's consumer information when applying for a loan?

Back

The collection, dissemination, and use of consumer information

Answer explanation

The correct choice is 'The collection, dissemination, and use of consumer information' as it directly pertains to the regulation of Elijah's credit history during the loan application process.

Front

What is the Gramm-Leach-Bliley Act primarily concerned with?

Back

Explaining information-sharing practices of financial institutions

Answer explanation

The Gramm-Leach-Bliley Act focuses on requiring financial institutions to explain their information-sharing practices to customers, making the first answer choice the correct one.

Front

What is the document called that Scarlett fills out to request insurance coverage for her new car?

Back

A form used to request insurance coverage

Answer explanation

The document Scarlett fills out to request coverage is called a form used to request insurance coverage. This is the correct choice as it directly describes the action she is taking.

Front

What does the Terrorism Risk Insurance Act (TRIA) provide?

Back

A government backstop for insurance claims related to terrorism

Answer explanation

TRIA provides a government backstop for insurance claims related to terrorism, ensuring that insurers can cover losses from terrorist attacks, which helps stabilize the insurance market.

Front

What does the territory provision in an insurance policy define?

Back

The geographic area where coverage applies

Answer explanation

The territory provision in Anika's insurance policy defines the geographic area where coverage applies, ensuring she knows where she is protected while traveling.