Casualty insurance

In the event an insurer is found guilty of committing defamation, the insurer may be subject to the maximum penalty of

$10,000

An insured has $5000 of medical coverage on a personal auto policy at the time of a covered accident. The insured and two passengers are injured. Medical treatment costs $7000 for the insured, $4000 for the first passenger, and $8000 for the second passenger. How much will the policy pay under medical payments coverage?

$14000

A tow truck was stolen from the insured's premises. The insured has loss of use coverage on his commercial auto policy. How much will the insured be able to collect from the coverage if unable to use the town truck in its operations for 40 days?

$600

within how many days may a person who is being examined by the director for nonfinancial business practices request a hearing after receiving the examination report?

10 days

An insurer cannot be required to recalculate an insurance score any more often than once every

12 months

If a licensed producer dies, the director may issue a temporary license to that producers representative for an initial period of

180days

The Director may refuse to issue a license if a licensee's aggregate amount of premiums on controlled business exceeded the aggregate amount of premiums on all other insurance business during

2 calendar years immediately preceding the extension date of the license

Prior to requesting renewal of an insurance producer's license, how many hours of continuing education must a producer complete?

24 hours

A producer receives notice that his license has been terminated. If the producer wants to have the charges reviewed in court, within what time period must the request be made?

30 days

A person is in the process of becoming permanently licensed as a producer. A temporary producers license may be issued for a maximum period of

90 days

Which of the following persons is required to hold a producer license?

A person who negotiates insurance contracts

Which of the following statements is true regarding the premium computation for worker's compensation insurance?

A premium auditor has the right to examine the insured's compensation records at the end of the policy period to determine the actual premium basis.

No person may act as a premium finance company or hold himself out to be engaged in the business of financing premium, without obtaining a license. Which of the following would be deemed to be a premium financing activity?

A producer who allows partial payments and schedules the balance for payments that are paid throughout the policy term.

The declarations page of the homeowners policy provides all of the following information EXCEPT

A statement that earthquake damage is not covered.

Which of the following definitions best defines the term "accident"?

A sudden, unplanned and unexpected event, not under the control of the insured, resulting in injury or damage neither expected nor intended

What type of liability would a person who owns wild animals have?

Absolute Any conduct that is inherently dangerous, such as using explosives or keeping wild animals, imposes absolute liability. The claimant does not have to prove anything.

In a personal auto policy, the medical payments coverage is similar to

Accident insurance, because it pays medical expenses regardless of fault.

Which insurance companies must participate in the Illinois automobile insurance plan?

All admitted insurers that write auto insurance in the state

A person disclosing personal or privileged factual information to the director concerning an investigation of suspended fraud or arson shall be free from a cause of action in the nature of

All of the above

What are the general duties of the director of insurance?

All of the above

Workers compensation statues provide coverage for diseases that occur as a result of working in the employer's working environment. Which of the following is an example of a disease that would NOT be covered by such provisions?

An employee of a medical facility who suffers from a common cold

An insured insists that the insurer owes him $10000 for liability damages, while the insurer asserts that they owe no more than $7000. Which of the following would most likely describe the type of claim settlement that the insured and insurer might pursue?

Arbitration

Which of the following is a method of claim settlement used in a casualty insurance when the insured and insurer cannot agree on how to settle a claim?

Arbitration Arbitration is a method of casualty claim settlement used when the insured and insurer cannot agree on how to settle a claim. The arbitrator's decision is binding to both parties.

The act of rebating is considered a(n)

Class B Misdemeanor

An insured was involved in an automobile accident for which the insured was at fault. Which of the following coverages would pay for damage to the insured's automobile?

Collision The policy defines collision as the upset or impact of a covered vehicle with another vehicle or object

A professional who wants coverage for all liability exposures should purchase what form of liability insurance?

Commercial general and professional

All of the following are supplemental payments found in a liability policies EXCEPT

Costs the insured incurred in hiring an attorney.

The part of a property policy that shows the amount of insurance, premium, and policy term is the

Declarations

Which of the following is mandatory part of an insurance policy that varies with each individual policy?

Declarations

The part of a policy that clarifies terms in the policy is the

Definitions

Employment practices liability insurance (EPLI) would NOT cover claims arising from

Deliberate law violation

Most fidelity bonds have a period of time in which losses which occurred while the bond was in force are covered even though not found until after the coverage has terminated. This is known as

Discovery Period

Which of the following provisions requires that the insured protects the damaged property from further damage, cooperates with the insurer in settling the loss, and submits to the insurer signed prof of loss within a specified period of time?

Duties after loss

Directors and Officers Liability Insurance defends actions or it's officers and directors alleging wrongful acts include any of the following EXCEPT

Embezzlement

What method of premium computation relates an employer's losses, payroll, and premiums to the rating bureau's classifications of operations?

Experience modification factor

Which of the following is an example of an unfair claims settlement practice?

Failure to promptly settle a claim when liability has been clearly established

Which of the following statements would be an example of a product liability claim?

Faulty packaging of a cereal caused spoilage that resulted in someone getting sick.

The requirement that producers must account for all insurance funds collected, and without the expressed consent of the insurance company are not permitted to commingle those funds with their own funds, is known as

Fiduciary Responsibility

Which of the following would be named on the declarations page of a property or liability policy?

First named insured

Replacement cost is defined as

Full replacement of property at its current cost, new and without reduction for depreciation.

The proof of loss statement must be

In Writing

Which of the following defines the term controlled business?

Insurance written on the interests of the producer who solicits a policy

Persons covered under an insurance policy, whether named or not, are known as the

Insureds

The part of the insurance contract that describes the perils and the nature of coverage of the contractual agreement between the insurer and the insured is called the

Insuring Agreement

All of the following are conditions commonly found in the insurance policy EXCEPT

Insuring agreement

Which of the following is NOT true regarding a premium fund trust account?

It could be used as a claim payment account

All of the following are true regarding deposit premium EXCEPT

It is 50% of the actual premium

Which of the following statements is true concerning uninsured motorist property damage coverage written in Illinois?

It must be offered on all policies insuring private passenger and recreational vehicles which are not covered for collision damage under the policy.

An insurance producer fails to obtain automobile insurance for a client after agreeing to do so. The client is involved in an automobile accident after running a red light and is found to be at fault. The damage to the other vehicle totals $5000. Which statement regarding the producers errors and omissions liability policy is true?

It will provide coverage because the damage to the client resulted from the producer's negligence.

If an employer in a state with elective worker's compensation laws chooses not to be subject to those laws, what does the employer lose?

Its common law defenses against liability suits

Employee fidelity may be written in all the following ways EXCEPT

Location schedule

The process of determining the premium charged and how much insurance is required for a particular loss is called

Loss valuation

Which of the following best describes the unfair trade practice of defamation?

Making derogatory oral statements about another insurer's financial condition

In Illinois, a cancellation provision must be included in all of the following types of insurance policies, EXCEPT

Marine

The insured's house is located one mile from the county's new landfill and across the road from the entrance of a rock quarry. It would cost $150,000 to rebuild the house if something happened to it, but when the insured tried to sell it, the best offer he received was $80,000. The insurance company will insure the house for only $80,000. What method of valuation is used to insure this property?

Market value When insured for market value, it is insured for what a willing buyer would pay prior to a loss. This is different from actual cash value or replacement cost.

Untrue statements on the application unintentionally made by insureds that, if discovered, would alter the underwriting decision of the insurance company, are called

Material misrepresentations

When an insurance policy does not offer a continuation or replacement at its expiration date, it is considered a

Nonrenewal

Insureds with approved anti-theft devices installed on the insured vehicle qualify for a premium discount on

Other than collision (comprehensive) coverage.

All of the following are correct concerning the workers compensation assigned risk pool except

Participation in the Assigned risk pool is optional

When ABC Appliance's marketing stated that its mowing machine was the only safe mower available for purchase in town, ABC was sued by XYZ Lawn and Garden. ABC's coverage would come from which part of its general liability coverage?

Personal and advertising injury liability

All of the following coverages are mandatory in an automobile insurance policy issued to a resident of Illinois EXCEPT

Physical damage coverage

All policy applications must identify which of the following?

Producer who solicited the applicant's business

Before an insurer will pay any loss under a policy, what is usually required from the insured?

Proof of Loss

The risk of loss may be classified as

Pure risk and speculative risk

All of the following are true regarding rebates EXCEPT

Rebates are allowed if it's in the best interest of the client.

Any inducement offered to the insured in the sale of an insurance policy that is not specified in the policy is an unlawful practice known as

Rebating

Which of the following is used in the formula for calculating the actual cash value of a property?

Replacement cost

All of the following are factors in rating worker's compensation insurance EXCEPT

Sales

In a personal umbrella policy, the amount paid by the insured for certain losses not covered under the primary coverage is called

Self-insured retention

Which of the following is included under the physical damage coverage of a personal auto policy?

Sound reproduction equipment permanently installed in the covered auto

Events in which a person has both the chance of winning or losing are classified as

Speculative risk

Which of the following correctly explains the equipment exclusion in auto policies?

Standard and optional equipment is covered on an auto policy, unless an endorsement excluding coverage for specific named equipment has been signed and dated by the insured.

In the event of a claim under a commercial general liability policy, the insured has all of the following duties to the insurer EXCEPT

Submitting to a medical exam when requested.

The legal process that gives the insurer, after payment of a loss, the right to seek recovery from a third party that was responsible for the loss is known as

Subrogation

Burglary is defined as

Taking of property from within the premises leaving visible signs of forced entry.

Which of the following is an example of a producer being involved in an unfair trade practice of rebating?

Telling a client that his first premium will be waived if he purchased the insurance policy today

Surety bonds are written for a definite limit called

The bond penalty

The Director notifies a producer of license termination on March 1. On April 15, the Director receives a request to review the charges in a court of law. What is the latest possible court date that can be set for the hearing?

The court date will not be established

The claims-made trigger is based on which of the following?

The date the claim is first made

When an umbrella policy is broader than underlying insurance and it pays a loss that is not covered by the underlying policy, it usually only pays

The excess over the self-insured retention.

The medical payments coverage in a personal auto policy will pay reasonable medical expenses for all of the following EXCEPT

The insured is injured while exiting a friend's mobile home.

All of the following statements concerning liability coverage are true EXCEPT

The policyholder can sue the insurer whether or not all conditions and provisions of the policy have been met.

Which of the following IS considered a work-related injury/occupational disease under Worker's Compensation law?

Tom works as a painter in an auto body shop. The chemicals from the paint aggravate Tom's asthma to the point that he must be hospitalized for several days.

Supplementary payments on a CGL provide all of the following EXCEPT

Up to $500 a day for lost earnings and $2,000 for the cost of bail bonds.

An insured's 9-year old son threw a ball, accidentally breaking a neighbor's plate glass window. The insured was found legally liable for the cost of replacing the window. This is an example of

Vicarious Liability

Under what circumstances must an automobile insurance policy include underinsured motorist coverage?

When the insured purchases more than the minimum required limit of uninsured motorist coverage

Which part of an insurance policy covers claims-related expenses, reasonable expenses incurred by an insured to protect damaged property from further loss, or defense expenses?

additional coverage

The Director regulates insurance rates through detailed rate reviews. The Director will prohibit insurance rates that are

any of the above

What term best describes the act of withholding material information that would be crucial to an underwriting decision?

concealment

A professional liability policy will provide coverage for loss in all of the following cases, except, when the insured doctor was shown to be

criminally negligent

When twin brothers applied for life insurance from Company A, the company found that while neither of them smoked and both had a very similar lifestyle, one of the twins was in a much stronger financial position than the other. Because of this, the company charged him a higher rate for his insurance. This practice is considered

discrimination

How often is a resident insurance producer required to pay license fees?

every 2 years

Which insurance principle states that if a policy allows for greater compensation than the financial loss incurred, the insured may only receive benefits for the amount lost?

indemnity

Which law is the foundation of the statistical prediction of loss upon which rates for insurance are calculated?

law of large numbers

A customer was injured in a supermarket parking lot when a grocery cart rolled into the customers leg. Coverage for this claim would be provided under

premises and operations

A situation in which a person can only lose or have no change represents

pure risk

Payment for medical expenses, loss of wages, funeral expenses, or the cost to repair or replace damaged property are known as what type of compensatory damages?

special