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Pearson Vue Property Insurance Exam
Practice Questions with Verified Answers
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Consist of 50 multichoice Questions with Answers
- In this state, a domestic insurer is defined as a company that:
A. Operates in this state but is incorporated in another state B. operates in this state but is domiciled in another state C. is headquartered in this state D. is incorporated in this state Answer is incorporated in this state
- The Insurance Commissioner may issue a limited insurance representative license to an individual who wants to sell which of the following types of policies?
A. Fire B. Automobile C. Mortgage Guaranty D. Health Answer Mortgage Guaranty
- Upon determining that a producer has violated the insurance law, the Insur- ance Commissioner is required to take which of the following actions?
A. Place the licensee on probation immediately B. Publish notice of the violation C. Hold a hearing on the infraction D. Submit the infraction to the Department of Insurance for review Answer Hold a hearing on the infraction
- An insurer that intends to nonrenew a Homeowners policy MUST take which of the following actions?
A. Obtain coverage for the policyholder from another insurer B. Obtain coverage for the policyholder under the FAIR Plan C. Send a nonrenewal notice to the Commissioner of Insurance thirty days prior to the policy expiration date
premium D. pay a $3,000 fine per violation to the Division of Insurance Answer provide a renewal policy that matches the expiring policy's coverages and premium
- Which of the following persons may assign a Standard Fire policy?
A. A claims adjuster B. The Superintendent of Insurance C. The insured with the permission of the insurance company D. The insured only Answer The insured with the permission of the insurance company
- The Insurance Commissioner may suspend, revoke, or deny a producer's license for all of the following reasons EXCEPT:
A. Untrue statements on the license application B. Conviction of a misdemeanor C. Incompetency D. Coverting funds Answer Conviction of a misdemeanor
- An insurer that generally fails to affirm or deny coverage of claims within a
reasonable period of time after receiving Proof of Loss may be found guilty of:
A. a breach of fiduciary responsibility B. an improper claims practice C. defamation D. misrepresentation Answer an improper claims practice
- After an insurance producer license is issued, a licensee MUST complete how many hours of approved continuing education courses every two years?
Answer 15
Prelicensing: 15 hrs Continuing education: 24 hrs in 24 mo
- Making false or misleading statements about dividends or shares of sur- plus previously paid on an insurance policy is known as:
A. unfair discrimination B. rebating C. coercion D. misrepresentation Answer misrepresentation
- An insurer that permits different rate classifications for individuals of the same class and same hazard may be guilty of
A. boycotting B. unfair discrimination C. misrepresentation D. defamation Answer unfair discrimination
- Which of the following situations is considered an insurance transaction?
A. Two insurance companies share actuarial data
D. the value of work, at the federal minimum wage, that a member of the household performs Answer Tools required to secure the property
- An incorporated insurer with capital divided into shares and owned by its shareholders is known as:
A. a stock company B. a mutual company C. a fraternal benefit society D. an association group Answer a stock company
- After an insurer receives a satisfactory proof of loss from an insured on a fire loss, payment is due within a MAXIMUM of how many days?
A. 5 B. 30 C. 60 D. 90 Answer 5
- To obtain coverage from this state's FAIR Plan, an applicant MUST
A. show that a diligent search was made through established markets B. apply at least thirty days prior to the desired effective data of the coverage C. pay a premium surcharge based on the applicants past claims experience D. pay a premium surcharge based on the type of property to be insured Answer show that a diligent search was made through established markets
FAIR plan source: Established markets
- An individual appointed by an insurer to solicit applications for a policy of insurance or to negotiate a policy on its behalf is known as:
A. an adjuster B. a consultant C. an insurance broker D. an insurance producer Answer an insurance producer
- XYZ Insurance Company recently received its certificate of authority to sell property insurance in Illinois. XYZ is an Iowa insurer but will sell its products through its licensed Illinois producers. Which of the following statements is CORRECT about XYZ Company's involvement in the FAIR Plan?
A. XYZ may not join the FAIR Plan, because it is a foreign company B. XYZ may not join the FAIR Plan, because its producers are licensed in
unavailable in the regular market D. Basic property insurance for which coverage is not available in the regular market Answer Basic property insurance for which coverage is not available in the regular market
- The insurance commissioner is empowered to:
A. enforce state laws relating to insurance B. pass state laws relating to insurance C. write policy forms for mandatory insurance coverages D. set rates for mandatory insurance coverages Answer enforce state laws relating to insurance
- The Insurance Commissioner is:
A. Appointed by the President of the NAIC B. Appointed by the Governor and confirmed by the State Senate C. Appointed by the State Senate and confirmed by the Governor D. Elected through public nominations Answer Appointed by the State Senate and confirmed by the Governor
- All of the following are powers and duties of the Commissioner, except:
A. Issuing, denying, revoking, or suspending insurance licenses.
B. enforce state insurance laws C. Ensuring that insurance rates are adequate D. Performing all duties in the best interest of independent insurance agent Answer Performing all duties in the best interest of independent insurance agent
- A licensed insurer must be examined by the Commissioner at least every year(s).
A. 1 B. 3 C. 5 D. 7: 5
- The Commissioner can impose a penalty for all of the following, except a person who has:
A. Surrendered his/her license B. Not surrendered his/her license C. Engaged in an unfair trade practice D. Failed to pass the licensing examination Answer Failed to pass the licensing
A. $1,000 per accident, $5,000 max per 12 months B. $20,000 per accident, $750,000 max per 12 months C. $3,000 per accident, $30,000 max per 12 months D. $30,000 per accident, $750,000 max per 12 months Answer $3,000 per accident
Unintentional 3k up to 30k Intentional 30k up to 750k
- How much is the penalty for a willful violation per accident and max per year?
A. $1,000 per accident, $5,000 max per 12 months B. $20,000 per accident, $750,000 max per 12 months C. $3,000 per accident, $30,000 max per 12 months per accident and max per year D. $30,000 per accident, $750,000 max per 12 months Answer $30,000 per accident, $750,000 max per 12 months
- The Commissioner can refuse, suspend, revoke, or nonrenew a license if the licensee has committed any of the following, except:
A. Failed to pay child support B. Issued insufficient coverage to a customer through apparent authority C. Had a license suspended or revoked in another state D. Cheated on an insurance examination Answer Issued insufficient coverage to a customer through apparent authority
(Explanation in book: Being convicted of a felony, misappropriating funds belonging to someone else, demonstrating a lack of trustworthiness or competence, or com- mitting an unfair trade practice are also grounds for license suspension, non-renewal or revocation)
- Concerning license suspension and revocation, the Commissioner can take all of the following actions, except:
A. Notify the producer of any license suspension, revocation, or termination B. Notify the NAIC of any license suspension, revocation, or termination C. Notify the Attorney General or District Attorney of criminal violations of the insurance code D. Impose a civil penalty of $1,500 per violation, up to $10,000 per fine in addition to or in lieu of, license termination Answer Impose a civil penalty of $1,500 per violation, up to $10,000 per fine in addition to or in lieu of, license termination
- Each of the following is a component of the legal responsibility of main- taining an insurance license, except:
A. A producer must register any assumed name in writing to the Commission- er within 30 days of use B. A producer must inform the Commissioner of any change in address within 30 days C. An insurer must notify the Commissioner within 30 days of terminating a producer's appointment D. The producer must be given a copy of the termination within 15 days of the Commissioner's notification, but has 30 days to file comments about that termination with the Commissioner Answer A producer must register any assumed name in writing to the Commissioner within 30 days of use
- All of the following are true about surplus lines insurance, except:
A. Within 30 days, surplus lines producer must file an affidavit with the Com- missioner describing coverage placed with a non-admitted insurer within 30 days B. To write surplus lines insurance in Colorado, a non-admitted insurer must be on the Commissioner's approved list that is issued each year on July 1 C. The written record documenting the search for admitted insurance must be
maintained by the producer for at least one year from the effective data of coverage D. Each surplus lines produce must remit a 3% tax on the previous year's surplus lines premiums on or before March 1st of each year. Answer The written record documenting the search for admitted insurance must be maintained by the producer for at least one year from the effective data of coverage
(Answer in the book: A written record documenting diligent search efforts must be maintained by the producer for at least 3 years from the effective date of coverage and not one year from the effective dates)
- Producers can receive the following forms of compensation for soliciting, procuring, or servicing policies:
A. Administrative fees, in addition to commissions B. Service fees, in addition to commissions C. Consulting fees, in addition to commissions D. Commissions from an insurer Answer Commissions from an insurer
