TJ_Comp 20_TB_Ch36

TJ_Comp 20_TB_Ch36 - Chapter 36INSURANCE TRUE/FALSE 1....

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Chapter 36—INSURANCE TRUE/FALSE 1. Insurance is a contract by which one party for a stipulated consideration promises to pay another party a sum of money upon the occurrence of a stated event in which the other party has an interest. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 2. An insurance broker generally is an independent contractor who is not employed by any one insurance company. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 3. Generally, the terms broker and agent are synonymous because both work directly for the insurer. ANS: F TOP: AICPA BB-Legal MSC: AACSB Analytic 4. A contract of insurance ordinarily is stated in a writing called a policy. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 5. In general, there is no requirement that an insurable interest exist at the time that a property insurance contract is created. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 6. A person has an insurable interest in property if destruction of that property would cause a monetary or pecuniary loss to that person. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 7. An insurable interest in property must exist at the time that the loss is suffered, while an insurable in- terest in life must exist at the time that the policy is issued. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 8. A person who obtains life insurance generally can name anyone as beneficiary regardless of whether that beneficiary has an insurable interest in the life of the insured. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 9. A partner does not have an insurable interest in the life of each of the other partners. ANS: F TOP: AICPA BB-Legal MSC: AACSB Analytic 10. Any false statement in an application binds the insured. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 11. Insurance contracts are regulated by statute and generally must contain certain provisions.
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ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 12. An insurer may cancel any contract of insurance by the insurer's unilateral act as long as the insurer gives advance written notice. ANS: F TOP: AICPA BB-Legal MSC: AACSB Analytic 13. When a provision of an endorsement conflicts with a provision of a policy, the endorsement controls. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 14. A contract of insurance is to be interpreted as it would be understood by a person with technical know- ledge of the law or of insurance. ANS: F TOP: AICPA BB-Legal MSC: AACSB Analytic 15. An ambiguity in an insurance policy is interpreted in favor of the insured. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 16. Coverages that are expressly excluded or excepted from the policy are called exceptions. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 17. If an insurer denies liability for a loss, the insured or the beneficiary of the policy has the burden of proving that there was a loss that came within the coverage of the policy. ANS: T
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This note was uploaded on 02/22/2012 for the course BUS BUS212 taught by Professor Manney during the Spring '12 term at FSU.

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TJ_Comp 20_TB_Ch36 - Chapter 36INSURANCE TRUE/FALSE 1....

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