General Insurance PrinciplesQuestion 605 of 716
The principle of utmost good faith in insurance means that:
a.Only the insured is required to be completely honest, while the insurer owes no comparable duty of disclosure
b.The producer personally guarantees the insurer's performance
c.Both parties rely on the honesty and full disclosure of the other
d.Neither party owes the other any duty of honesty
Explanation
Utmost good faith obligates both the applicant and the insurer to deal honestly and disclose material facts. It is not a one-sided duty, nor a producer guarantee.
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Related questions on this topic
- In insurance, a 'replacement' occurs when a new policy is purchased and an existing policy is:
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- In a replacement transaction, the producer generally must:
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PrepPass team · Verified against California Life & Health Insurance License Exam · How we review
Reviewed by John Zihao Zhang — California-Licensed Life Insurance Agent (CA Dept. of Insurance License #4396095 — verify)