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44 Cards in this Set
- Front
- Back
Insurance professionals should endeavor to place the public interest above their own. |
Canon 1
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Insurance professionals should seek continually to maintain and improve their professional knowledge, skills, and competence. |
Canon 2 |
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Insurance professionals should obey all laws and regulations, and should avoid any conduct or activity that would cause unjust harm to others. |
Canon 3 |
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Insurance professionals should be diligent in the performance of their occupational duties and should continually strive to improve the functionality of the insurance mechanism. |
Canon 4 |
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Insurance professionals should aspire to raise the professional and ethical standards of the insurance and risk management profession. |
Canon 5 |
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Insurance professionals should strive to establish and maintain dignifiedand honorable relationships with those whom they serve, with fellowinsurance professionals, and with members of other professions. |
Canon 6 |
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Insurance professionals should assist in improving the public understandingof insurance and risk management. |
Canon 7 |
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CPCUs should honor the integrity of the CPCU designation and respectthe limitations placed on its use. |
Canon 8 |
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CPCUs should assist in maintaining the integrity of the CPCU Code ofProfessional Conduct. |
Canon 9 |
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What are the three universal precepts that "ought to be" qualifying parameters for any belief system chosen by an insurance professional? |
Honesty, respect for other persons, and respect for others' property |
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From what two sources does business ethics stem from? |
Both official policy and practical example |
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What is the meaning of the Latin word that "client" is derived for? |
Lean. A client is someone under the care and protection of a professional, i.e. leaning on them. |
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What positives can come of a person utilizing their risk management knowledge to act on his/her special duty to spread the knowledge to safeguard others? |
- Reduce threats to many, within and beyond any given organization - Build positive relationships for combating tomorrrow's threats - Begin teaching the future risk management professionals |
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What is the relationship between ethics and risk management? |
Good risk management requires good ethics, and good ethics require good risk management. |
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What are the required contractual elements? |
1. Agreement 2. Capacity to contract 3. Consideration 4. Legal purpose |
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What constitutes an agreement? |
Offer + Acceptance. Two parties must have a "meeting of the minds." |
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What constitutes an offer? |
A promise that requires some action by the intended recipient to make an agreement. |
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What makes an offer valid? |
1. Intent to enter into a contract 2. Definite terms 3. Communication to the offeree |
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What are the three possible responses to an offer? |
Rejection, counter offer, or acceptance. |
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What are the requirements of a valid acceptance? |
1. Must be made by the offeree 2. Must be unconditional and unequivocal 3. Must communicate acceptance by appropriate word or act |
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"Unenforceable contract" - what parties lack capacity to contract? |
1. Minors 2. Insane 3. Intoxicated 4. Artificial entities |
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What is consideration? |
Something of value given by both parties to a contract that induces them to enter into the agreement. |
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Can illegal or wrongful acts be contracted? |
No. |
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What types of circumstances constitute unenforceable contracts? |
1. Fraud 2. Mistake 3. Duress 4. Undue influence 5. Innocent misrepresentation 6. Statue of Frauds 7. Parol Evidence Rule |
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What is fraud? |
INTENTIONAL misrepresentation intended/resulting in harm to a person or organization. |
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What is a mistake? |
A perception that does not agree with the facts. |
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What is duress? |
The use of restraint, violence, or threats to compel a party to act contrary to his wishes or interests. |
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What is undue influence? |
The improper use of power or trust to deprive a person of free will. |
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What is innocent misrepresentation? |
A person who has reasonably relied on an innocently misrepresented material fact can later avoid resulting contract due to a lack of genuine assent. |
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What is the Statue of Frauds? |
A law to prevent fraud and perjury by requiring that certain contracts be in writing and signed. |
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What is the Parol Evidence Rule? |
All prior negotiations, conversations, and agreements were merged into the writing. AKA cannot change the terms of the contract, only explain |
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What is repudiation? |
A party's refusal to meet obligations under a contract. |
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What is an anticipatory breach of contract? |
A party's unequivocal indication before a contract performance is due that she will not perform when performance is due. |
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What is a material breach? |
Violation of the agreement that would justify an owner's termination of the contract. |
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What are the different types of contracts? |
1. Bilateral and unilateral 2. Executed and executory 3. Express and implied 4. Void and voidable |
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What is a bilateral contract vs. a unilateral contract? |
Bilateral - each party promises a performance. Unilateral - only one party make a promise or undertakes the requested performance. |
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Examples of bilateral vs. unilateral contracts? |
B - I will paint your garage, you will give me $500. U - If I paint your garage, you will give me $500 (If I don’t you give me nothing.) |
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What is an executed contract vs. an executory? |
Executed - nothing is required of either party = completed contract Executory - contract that has not been completely performed by one or both parties |
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Examples of executed vs. an executory? |
Executed: I go onto Amazon buy a shirt my payment is good. They deliver like they are supposed to. We are done. Executory: I go onto Amazon order a shirt provide my credit card information. They take the payment and do not send me the shirt.-- Still an open requirement under the contract. |
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What is an express contract vs. an implied contract? |
An express contract is a contract whose terms and conditions are explicitly stated. An implied contract is a contract whose terms and intentions are indicated by the actions of the parties to the contract and the surrounding circumstances. |
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What is a void vs. voidable contract? |
Voidable contract = a valid contract that one of the parties can reject based on some problem with its execution. Void contract = an agreement that despite the parties' intentions, never reaches contract status and therefore is not legally enforceable or binding |
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What are the additional insurance contract characteristics? |
1. Conditional 2. Involves fortuitous events and exchange of unequal amounts 3. Utmost good faither 4. Adhesion 5. Indemnity 6. Non-transferable contract |
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What is the conditional characteristic? |
A contract that one or more parties must perform ONLY under certain conditions, i.e. loss.
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What must a policyholder show to get punitive damages? |
"Actual malice, fraud, or insult." |