#1
Which of the following is an essential element of an insurance contract?
Premium payment
Insured's age
Insurer's profit margin
Indemnification
#2
What is the purpose of a 'rider' in an insurance policy?
An additional coverage attached to the main policy
An insurance agent
A policyholder
A type of deductible
#3
What is the purpose of an 'exclusion' in an insurance policy?
To increase the premium
To limit coverage by specifying what is not covered
To simplify policy wording
To provide additional benefits
#4
Which legal principle requires an insured to disclose all relevant information to the insurer before the policy is issued?
Subrogation
Uberrimae fidei
Indemnity
Insurable interest
#5
What does the term 'subrogation' mean in insurance?
Transferring policy to another insurer
Insurer's right to step into the insured's shoes to recover from third parties
Canceling an insurance policy
Changing the policy premium
#6
In insurance, what does the term 'co-insurance' refer to?
Joint ownership of insurance policy
Sharing of risk between multiple insurers
Insured and insurer sharing the covered losses
Exclusion of specific risks
#7
Which legal doctrine implies that an insurance policy should not provide a financial gain to the insured in the event of a loss?
Indemnity
Concealment
Insurable interest
Subrogation
#8
What does the principle of 'utmost good faith' require in insurance contracts?
Full and honest disclosure of all material facts
Maximizing profits for the insurer
Minimizing claims for the insured
Automatic renewal of policies
#9
In insurance, what is 'moral hazard'?
Risk arising from natural disasters
Risk associated with the character and integrity of the insured
Risk related to economic factors
Risk due to negligence
#10
What is the primary purpose of reinsurance in the insurance industry?
To reduce the insured's premiums
To transfer risk from the primary insurer to another insurer
To provide coverage for uninsurable risks
To increase the insurer's profit margin
#11
What is the concept of 'adverse selection' in insurance?
Insuring high-risk individuals without proper underwriting
Selecting insurance policies based on personal preferences
Choosing insurance companies with poor ratings
Excluding certain risks from coverage
#12
What is the purpose of the 'loss ratio' in insurance underwriting?
To calculate the insurer's profit margin
To determine the percentage of premiums paid out as claims
To assess the insured's financial position
To predict future losses
#13
What legal doctrine allows an insurer to deny a claim if the insured intentionally caused the loss?
Subrogation
Concealment
Estoppel
Intentional act exclusion
#14
In insurance, what does 'fiduciary responsibility' refer to?
Insurer's duty to act in the best interests of the insured
Insured's obligation to disclose information honestly
Agent's responsibility to maximize profits for the insurer
Insurer's duty to deny claims
#15
What is the purpose of 'cancellation provision' in an insurance policy?
To allow the insured to cancel the policy at any time
To prevent the insurer from canceling the policy
To limit coverage for specific risks
To increase the policy premium