Why was the commercial Insurance Deregulation Act Created? - ANSWER-To protect the public from the adverse effects of excessive, inadequate, & unfair
... [Show More] discriminatory rates & marketing practices
Which policies issued must follow the provisions of the Commercial Insurance Deregulation Act? - ANSWER-Commercial policies
When must rate amendments & policy forms be filed with the commissioner? - ANSWER-30 days before
What losses are excluded from flood insurance? - ANSWER--Landslides
-Sewer backup
-Windblown Rain
-Snow
-Sleet
Who administers the NFIP? - ANSWER-Federal Insurance Administration (FIA)
What does the NFIP stand for? - ANSWER-National Flood Insurance Program
Why was the National Flood insurance Program constructed? - ANSWER-to fill in gaps of flood coverage by the private sector
What are the 3 NFIP requirements for coverage? - ANSWER--community land management & flood control programs must reduce flood losses in the future
-Flood insurance required in specific flood prone areas as a condition for receiving loans through/ backed by the federal government
-Property owners that fail to purchase flood insurance within 1 year after it is available will not be eligible for full disaster relief funding. It will be reduced by an amount of insurance that could have been purchased
What is the NFIP max coverage for a single family? - ANSWER-Building $250K, Contents $100K
What is the NFIP max coverage for other residential? - ANSWER-Building $250K, Contents $100K
What is the NFIP max coverage for small business? - ANSWER-Building $500K, Contents $500K
What is the NFIP max coverage for Other Non-Residential? - ANSWER-Building $500k, Contents $500K
What is the NFIP subsidized rate for a single family? - ANSWER-Building $35K, Contents $10K
What is the NFIP subsidized rate for Other Residential? - ANSWER-Building $100K , Contents $100K
What is the NFIP subsidized rate for small businesses? - ANSWER-Building $100K, Contents $100K
What is the NFIP subsidized rate for other non-residential? - ANSWER-Building $100K, Contents $100K
What is the wait period before flood insurance can be effective? - ANSWER-30 days, no binders issued
What are the exceptions to the 30 day NFIP wait period? - ANSWER--1st 30 days after coverage, community enters standard or emergency program, coverage will begin at 12:01 am the date after application and premium were mailed
-When an existing policy was assigned to a property purchaser
-At 12:01 am on the 5th day after an endorsement request & premium has been mailed for existing policy
What was the Supreme Court's decision regarding the Paul v. Virginia case? - ANSWER-insurance was NOT interstate commerce and could not be regulated by the federal govt.
Who heard the Paul v. Virginia case? - ANSWER-Supreme Court
Who heard the US v Southeastern Underwriting Association case? - ANSWER-Supreme Court
What was the decision in the US v Southeastern Underwriting Association Case? - ANSWER-Insurance is interstate commerce and should be subject to federal regulations (currently in effect today)
What is the McCarran-Ferguson Act? - ANSWER-The federal govt won't regulate insurance business as long as states perform an adequate job of managing their own insurance industries.
When was the McCarran-Ferguson Act passed? - ANSWER-March 9, 1945
To whom does the insurance commissioner have to provide a report? - ANSWER-Governor & Legislature
How often must the insurance Commissioner provide a report? - ANSWER-Annually
How long before a disciplinary hearing must the insurance commissioner notify interested parties? - ANSWER-10 days before
What is the fine for failing to comply with a court-ordered subpoena? - ANSWER-$5000
If the commissioner decides one has violated the insurance code, what is the fine for unintentional acts performed? - ANSWER-$1000
If the commissioner decides one has violated the insurance code, what is the max fine? - ANSWER-1st offense: $5K, 2nd offense $10K, each additional $15K
If the insurance commissioner decides one has violated the insurance code, what is the fine for violating a cease & desist? - ANSWER-$5k each violation
If the insurance commissioner decides one has violated the insurance code, what is the fine for unlawful acts with intentional & material thought? - ANSWER-$5k
What is the fine for not contacting the dept with an address or name change within 30 days? - ANSWER-$250 max if over 60 days
What is the fine for if a license fee check is returned for insufficient funds? - ANSWER-$500
What is the fine for if you do not contact the department regarding a change in partners, owners, officers, or directors? - ANSWER-$250
What is the fine for not returning a license to a producer? - ANSWER-$500
What is the fine for not maintaining an office address or employment contracts on file with the department? - ANSWER-$100 for each contract
What document is required before an insurance company may transact business in a state? - ANSWER-Certificate of Authority
What is a domestic insurer? - ANSWER-An insurer that conducts business in the state in which it was incorporated
A producer who is appointed with more than one insurer is considered to be... - ANSWER-A Licensed Solicitor
Implied authority is defined as... - ANSWER-Ability to act outside the authority specifically granted in an agency agreement & extends company's liability
What kind of clause relates to this statement: E&N Company issued a policy in consideration of the representations on an application & the payment of the 1st premium? - ANSWER-Consideration
An insured's representations and warranties are incorrectly stated in which of the following statements?
a. Statements made by an applicant that are guaranteed true are considered to be warranties
b. Statements that an applicant believes to be true, but does not guarantee to be true, are considered to be representations
c. An applicant's statements on an application are considered warranties
d. An applicant's statements on an application are considered representations - ANSWER-c. An applicant's statements on an application are considered warranties
What term relates to an agreement without legal effect? - ANSWER-Void
An authorized but non-admitted insurer can be represented in this state only by which of the following? - ANSWER-Surplus lines broker
In franchise groups, how many master policies will be issued? - ANSWER-None
Self-insurance is an example of what kind of risk management? - ANSWER-retention
What kind of plan is a Stock life insurance company conducting when it issues participating and non-participating policies? - ANSWER-Mixed
What is the fine for if you do not contact the department regarding a change in partners, owners, officers, or directors? - ANSWER-$250
What is this an example of: Doctors pooling their funds to cover their malpractice exposures? - ANSWER-risk sharing
Which entity makes an enforceable promise in a unilateral contract? - ANSWER-Insurer
In a court of law, any ambiguity found in a policy will go in favor of the insured because an insurance policy is what kind of contract? - ANSWER-contract of adhesion
In regard to an informal contract, when will it become binding? - ANSWER-When one party makes an offer and the other party accepts the offer
When a risk is insurable, what must be calculable? - ANSWER-chance of loss
What is a non-profit provider of insurance that is covered by a unique section of the insurance code called? - ANSWER-Fraternal Life Insurance Organization
All of the following are examples of conditions except:
a. Inspections
b. Liberalization clause
c. Return of premium
d. Appraisal - ANSWER-d. Appraisal
If a driver had lots of accidents & violations, compared to other drivers their age, which rating type would most closely reflect their risk? - ANSWER-Merit
What construction class has a 2 hour fire resistance rating? - ANSWER-fire resistive
What rating system is the most common approach used in the insurance industry? - ANSWER-class
A consequential loss is known as what kind of loss? - ANSWER-indirect
What is ACV? - ANSWER-Actual cash value
Replacement cost-depreciation= ACV
Which kind of penalty does the insured suffer if the insured does NOT carry sufficient insurance to meet the policy requirement? - ANSWER-coinsurance
Which policy part contains the policy's premium & coverage? - ANSWER-declarations
The Pro Rata provision is most closely associated with which principle? - ANSWER-indemnity
Jan rarely cleans her home & often lets trash build up on her steps. What type of hazard is this? - ANSWER-physical
What is the location of the property called? - ANSWER-policy territory
What would be the result if a producer sold a policy at a loss cost rate? - ANSWER-Financial loss to an insurer
What contract part contains an insurer's promise to pay? - ANSWER-insuring agreement
What determines the unit of exposure in the measure of insurance? - ANSWER-rate
An individual insured under a policy that is not named is known as: - ANSWER-the insured
William wants to know whether theft will be covered under his basic form dwelling policy. Will it be covered? - ANSWER-No, it will not be covered.
Which coverage insures contents damaged by fire? - ANSWER-Coverage c
The broad form dwelling policy with removal coverage will cover property temporarily removed from the premises to protect it from damage. What is the length of this coverage? - ANSWER-30 days
What would be covered by Jan's dwelling policy?
a. Theft of her car from detached garage
b. Death of her dog due to smoke inhalation
c. Fire damage to her canoe in her garage
d. Fire damage to her garage on her premises used as a repair shop for cars - ANSWER-c. Fire damage to her canoe in her garage
Sally is moving to a new location. Her personal property coverage under her dwelling policy will apply on a pro rata basis for how many days? - ANSWER-30 days
Which coverage provides additional living expenses? - ANSWER-Coverage E
What are the max coverage limits for Coverage A and Coverage C under the JIA? - ANSWER-$455,000 & $228,000
Vandalism would be covered if an insured's premises was vacant for how many days? - ANSWER-35
Under dwelling policy coverage C, which is included
a. Small plane belonging to a renter
b. Sofa belonging to a renter
c. Watch belonging to a guest
d. Garden shed belonging to a neighbor - ANSWER-c. Watch belonging to a guest
Which of the following is not covered in the broad and special form dwelling policy?
a. glass breakage
b. trees
c. collapse
d. theft of personal property - ANSWER-d. theft of personal property
Under a dwelling policy, how many separate causes of loss forms are available? - ANSWER-3
Which coverage would replace the cost of a dwelling? - ANSWER-DP-2 & DP-3
Frank had his dwelling policy for 30 days. How much notice must his insurer give to cancel his policy? - ANSWER-10 days
Which of the following is NOT covered under a dwelling policy:
a. earth movement
b. other structures
c. debris removal
d. improvements - ANSWER-a. earth movement
When do mobile homes qualify for basic coverage? - ANSWER-If permanently located on a private lot
What is excluded from other coverages in the Basic Dwelling policy? - ANSWER-breakage of glass
DP-2 differs from dwelling basic form with extended coverage because DP-2 adds... - ANSWER-coverage for damage caused by burgulars
Which of the following clauses under a Dwelling policy would apply to Jane who lost one of her two matching crystal candlesticks? - ANSWER-Pair or set
In all homeowner's forms, additional coverage for a fire department service charge covers charges made by the fire department to... - ANSWER-save covered property from a fire
What homeowner's policy has the broad form? - ANSWER-HO-2
What condition voids a homeowner's policy? - ANSWER-Concealment/fraud
An exclusive home would likely be insured under which form? - ANSWER-HO-8
The Jackson's house is under repair after last month's storm. Which coverage will allow the family to maintain its normal standard of living? - ANSWER-Additional Living Expense Coverage
When can a policy be voided if an insured committed fraud? - ANSWER-Before or after a loss
All forms of homeowner's policies exclude:
a. hail
b. earth movement
c. volcanic explosion
d. cyclones - ANSWER-b. earth movement
Which homeowner's policy is called the renter's policy? - ANSWER-HO-4
Which of the following would be considered an insured location under the HO-3?
a. cemetery plot of the insured
b. aircraft
c. stored business data
d. rented, vacant farmland - ANSWER-d. rented, vacant farmland
Failure to use reasonable means to save & preserve property after a loss is... - ANSWER-Neglect
Coverage F- medical payments to others contains a basic limit of which amount? - ANSWER-$1,000
Under the homeowner's program, which policy contains the modified coverage form? - ANSWER-HO-8
Which HO policy has the contents broad form? - ANSWER-HO-4
What will a HO policy pay for the removal of one fallen tree in a covered loss? - ANSWER-$500
What is the HO-8 limit on worldwide coverage? - ANSWER-$1,000
Under a homeowner's policy, which of the following statements are TRUE regarding coverage of the Fire Dept. Service charge:
a. the cost is included in Dwelling Coverage A
b. the cost is included in addition to the limit of insurance property
c. included in personal coverage c
d. no coverage at all - ANSWER-b. the cost is included in addition to the limit of insurance property
Under the HO-5 landlord furnishings in a rental apartment is limited to what amount? - ANSWER-$2500
The collapse additional coverage is included in what form? - ANSWER-All forms except HO-8
Under HO Property additional coverage, how much is covered for debris removal? - ANSWER-All reasonable costs up to $1,000
What is the limitation on platinum coins under a HO policy? - ANSWER-$200
When does a watercraft endorsement cover a rented [Show Less]