The voluntary relinquishment of a legal right is called

What is the practical effect of an insurance contract being a contract of adhesion?

Granite Insurance Company entered into a treaty reinsurance agreement with Rock Solid Reinsurance (RSR). Granite’s retention limit is $400,000 and RSR agreed to provide reinsurance for up to $2.0 million. If Granite writes an $800,000 policy, RSR is responsible for 50 percent of the losses. If Granite insures a $1.6 million risk, RSR is responsible for 25 percent of any losses. What type of reinsurance arrangement did Granite enter into with RSR?

Which of the following statements about the use of risk-based capital requirements is (are) true?I.Insurers must have a certain amount of capital depending on the riskiness of their investments and insurance operations.II.Insurers may be required to take certain actions depending on how much capital they have relative to their risk-based capital requirements.

Which of the following statements is (are) true with respect to catastrophe bonds?I.The bonds are issued by the U.S. Government.II.The bonds have relatively high interest (coupon) rates.

Why does the insured get the benefit of the doubt if an insurance policy contains any ambiguities or uncertainties?

Which of the following statements is (are) true about life insurance company investments?I.The majority of life insurance company general account assets are invested in bonds. II.The majority of life insurance company separate account assets are invested in stocks.

Which of the following statements about an insurable interest in life insurance is (are) true?I.It is required of any person named as beneficiary.II.It may result from a pecuniary (financial) interest.

Melody’s car was damaged when another driver ran a stop sign and hit her car. Melody decided to collect from her own insurer and to let her insurer recoup the loss payment from the negligent driver who hit her. What fundamental legal principle is illustrated in this scenario?

Which of the following statements about the sale of property and liability insurance through the direct response system is (are) true?I.Selling expenses are higher because market segmentation tends to be less precise than with other marketing methods.II.It is the most appropriate system for selling complex products.