#1
What is the purpose of an insurance license?
To sell insurance
ExplanationAuthorization to engage in insurance sales
#2
Which type of insurance is typically regulated by state governments?
Auto insurance
ExplanationState-regulated coverage for automobiles
#3
In insurance, what is a deductible?
The amount paid by the insured before the insurance coverage kicks in
ExplanationInitial out-of-pocket expense before coverage starts
#4
What is a key function of state insurance departments?
Overseeing insurance licensing and compliance
ExplanationRegulatory supervision of licensing and adherence
#5
What is the purpose of an insurance policy's declarations page?
To outline the coverage provided by the policy
ExplanationSummary of policy coverage details
#6
What is the primary purpose of an insurance policy's exclusions section?
To specify situations not covered by the policy
ExplanationDefines scenarios where coverage is not provided
#7
Which regulatory body oversees insurance companies in the United States?
NAIC
ExplanationNAIC: National Association of Insurance Commissioners
#8
What is a common requirement for obtaining an insurance license?
Passing a licensing exam
ExplanationSuccessful completion of a licensing examination
#9
What does E&O insurance stand for in the insurance industry?
Errors & Omissions insurance
ExplanationCoverage for professional mistakes or negligence
#10
Which type of insurance is often required by landlords to protect against property damage caused by tenants?
Renters insurance
ExplanationCoverage for tenant-caused property damage
#11
What is the purpose of the National Flood Insurance Program (NFIP) in the United States?
To offer flood insurance to property owners
ExplanationProvides flood coverage for property owners
#12
What does the term 'indemnity' mean in the context of insurance?
Compensation for loss or damage
ExplanationReimbursement for incurred losses or damages
#13
Which insurance product is designed to cover the costs associated with long-term care services?
Long-term care insurance
ExplanationCoverage for long-term medical and personal care
#14
In insurance, what does the term 'underwriting' refer to?
Assessing risk and setting premiums
ExplanationRisk assessment and premium determination process
#15
What is the purpose of a surety bond in the insurance industry?
To guarantee the performance of an obligation
ExplanationEnsures fulfillment of contractual obligations
#16
What is the purpose of a National Producer Number (NPN) in the insurance industry?
To uniquely identify insurance producers
ExplanationUnique identifier for insurance producers
#17
Which federal law regulates the privacy of consumer financial information in the insurance industry?
GLBA
ExplanationGramm-Leach-Bliley Act: Safeguards financial data privacy
#18
In insurance, what does the term 'captive insurance company' refer to?
An insurance company owned by its insureds
ExplanationInsurer owned and controlled by insured parties
#19
What is the primary purpose of a surplus lines insurance policy?
To provide coverage for uninsurable risks
ExplanationCovers risks that standard insurers won't underwrite
#20
What is the purpose of the Financial Industry Regulatory Authority (FINRA) in the insurance industry?
To regulate securities firms and professionals
ExplanationOversees securities industry to protect investors