Chapter 15 Test
The Pennsylvania Department of Insurance may issue a non-transferable temporary insurance license for up to ____ days to certain persons in specified circumstances. 120 180 90 60
90
All of the following are unfair claims practices, except: Making claim payments without indicating the coverage under which payment was made Failing to settle a claim where liability is reasonably clear Paying claims without conducting an investigation based upon all information Attempting to settle claims on the basis of an altered application
Paying claims without conducting an investigation based upon all information
If an insurer terminates the relationship between them and an insurance producer, how many days does the insurer have in which to notify the licensee in writing, at his/her home address, from the time the insurer notifies the Department of Insurance? 20 15 30 45
15
An exclusive general agent is a licensee granted sole authority to act as a producer for a domestic insurer who produces business equal to or more than ______% of the surplus. 10 20 15 25
25
An insurer may cancel a private residential policy with _____ days' written notice for any reason during the first 60 days of a policy. 50 60 30 40
30
The Pennsylvania Insurance Guaranty Association covers which of the following claims? A $300,000 liability claim against an automobile policy A $300,000 claim against an employer's liability insurance policy A claim which arose more than 30 days after the insurer was declared insolvent Unearned premiums up to $300,000
A $300,000 liability claim against an automobile policy
Which of the following individuals would be covered by the Workers' Compensation program in the state of Pennsylvania? A licensed real estate salesperson A farm worker An individual doing "piece work" in his/her own home A domestic servant
A farm worker
Which of the following statements regarding the regulation of insurance policy forms and rates is correct? Insurers must notify the Commissioner of premium rate changes within 90 days of implementation The Commissioner participates with the NAIC to establish a national database of approved insurance forms A rate may be considered discriminatory if it clearly fails to reflect differences in expected losses and expenses The Commissioner can set insurance rates in Pennsylvania
A rate may be considered discriminatory if it clearly fails to reflect differences in expected losses and expenses
Which of the following statements regarding the duration and termination of policies is correct? Insurers must give 10 days' notice of cancellation for failure to pay premiums The insurer is always required to give 30 days of cancellation Personal lines policies require 60 days' notice of cancellation After the death of a named insured, the insurer must continue coverage for 180 days
After the death of a named insured, the insurer must continue coverage for 180 days
Which of the following statements regarding the duration and termination of policies is correct? Personal lines policies require 60 days notice of cancellation Insurers must give 10-days notice of cancellation for failure to pay premiums The insurer is always required to give 30 days of cancellation Binders may be in force for up to 30 days
Binders may be in force for up to 30 days
All of the following statements regarding prerequisites for producer licensing are correct, except: Applicants for credit insurance need not take a licensing exam Business entities must complete prelicensing education requirements Individual applicants must be fingerprinted An applicant holding a CLU is exempt from prelicensing education requirements
Business entities must complete prelicensing education requirements
All of the following statements regarding producer licensing are correct, EXCEPT: Business entities must complete prelicensing education requirements hose with a CIC professional designation are exempt Those with a CPCU professional designation are exempt Applicants for credit insurance need not take a licensing exam
Business entities must complete prelicensing education requirements
T was under investigation for a violation of the regulations regarding the payment of fees and commissions because he was accused of: Paying a deferred compensation to a retired producer Paying a flat referral fee per referral to unlicensed individuals Charging a fee for the process of completing insurance applications for prospective clients Refusing to share a commission with an associate whose license had been suspended
Charging a fee for the process of completing insurance applications for prospective clients
Because Marilyn made statements that were false and maliciously critical of her competitor's company and its products while attempting to conserve several policies, she was fined for: Misrepresentation Defamation Twisting Illegal inducements
Defamation
Producers that maintain a premium trust account: Must maintain a separate account for each insurance entity with whom they are appointed Must make immediate remittance of all funds collected to their insurers May make voluntary deposits to maintain a minimum balance Must not comingle net premiums and commissions in a separate bank account
May make voluntary deposits to maintain a minimum balance
All of the following statements regarding financial responsibility and the regulation of the automobile insurance in Pennsylvania are correct, EXCEPT: Insurers may issue digital Financial Responsibility Identification cards Policyholders have a choice between full tort and limited tort coverage The minimum amount of liability coverage is $15,000/$30,000/$5,000 Pennsylvania has a compulsory insurance law; everyone must buy a policy
Pennsylvania has a compulsory insurance law; everyone must buy a policy
Temporary licenses are granted by the Commissioner in the following situations, excepts: A designee may act on behalf of an individual entering active duty in the armed forces Maintain the license of a business entity following the death of the entity's designated licensee The spouse of a disabled producer may operate their agency until he can return to work Prospective licensees can sell insurance while preparing to take the state licensing exam
Prospective licensees can sell insurance while preparing to take the state licensing exam
All of the following statements regarding uninsured and underinsured coverage are true, EXCEPT: Underinsured motorist coverage can pay for damage to one's vehicle if the at-fault driver has insufficient coverage A hit and run driver is a motor vehicle that causes an accident resulting in no injuries Stacking is allowed for uninsured and underinsured motorist coverage An insured driver with less than the amount of coverage needed for the claim is considered an uninsured motorist
Stacking is allowed for uninsured and underinsured motorist coverage
Which of the following statements regarding the maintenance and duration of producer licenses is false? Producers must notify the Commissioner prior to using a fictitious name The department will reinstate licenses retroactively for 30 days after the due date Producers must notify the Department of a change of address within 30 days Administrative actions against a producer must be reported within 30 days of final disposition
The department will reinstate licenses retroactively for 30 days after the due date
Which of the following is true regarding risk retention groups (RRGs): RRGs must report biannually to the insurance Department the amount of gross direct premiums, less returns, they receive for risks in Pennsylvania They can sell insurance to a person who isn't eligible for membership in the group RRGs are required to contribute to the Pennsylvania Property and Casualty Insurance Guaranty Association They are prohibited from the solicitation or sale of insurance if the group has been found by a court to be financially impaired
They are prohibited from the solicitation or sale of insurance if the group has been found by a court to be financially impaired
Which of the following statements regarding the cancellation of auto insurance is correct? A policy may never be cancelled because the insured had one moving violation within the past 24-month period A policy may not be cancelled because the insured was in one accident within a 36-month period Insurers may cancel an insurance policy if the license of any insured driver in the covered household is suspended Requirements for cancellation do not apply to a policy insuring more than 3 vehicles
A policy may not be cancelled because the insured was in one accident within a 36-month period
The Pennsylvania laws governing the privacy of consumer information: Insurers must provide a notice of privacy policies every 2 years Define their scope as governing the disclosure of both non-public financial and health related information to unaffiliated 3rd parties Apply to all parties seeking to purchase insurance, both for personal and commercial purposes Allows disclosure of nonpublic the consumer is given both an initial notice and opt out notice, but does not opt out after a reasonable opportunity to do so
Allows disclosure of nonpublic the consumer is given both an initial notice and opt out notice, but does not opt out after a reasonable opportunity to do so
All of the following statements regarding auto insurance in Pennsylvania are correct, EXCEPT: Failure to maintain financial responsibility can result in license revocation The maximum weight of private passenger vehicle covered under a personal auto policy is 9,000 pounds The minimum liability coverage per person for bodily injury is $15,000 The personal auto policy defines a "serious injury" as one resulting in death, disfigurement or impairment
Failure to maintain financial responsibility can result in license revocation
The continuing education laws of the Commonwealth of Pennsylvania require that: Nonresident licensees must also complete CE requirements for Pennsylvania Producers may not carry over any continuing education credits to the next licensing period Producers must complete 24 hours of CE credit per line of license Producers must complete 24 hours of CE credit every two years
Producers must complete 24 hours of CE credit every two years
Temporary licenses are granted by the Commissioner in the following situations, excepts: The spouse of a disabled producer may operate their agency until he can return to work Maintain the license of a business entity following the death of the entity's designated licensee Prospective licensees can sell insurance while preparing to take the state licensing exam A designee may act on behalf of an individual entering active duty in the armed forces
Prospective licensees can sell insurance while preparing to take the state licensing exam
Which of the following statements regarding the maintenance and duration of producer licenses is false? Producers must notify the Department of a change of address within 30 days The department will reinstate licenses retroactively for 30 days after the due date Administrative actions against a producer must be reported within 30 days of final disposition Producers must notify the Commissioner prior to using a fictitious name
The department will reinstate licenses retroactively for 30 days after the due date
Under what circumstances may a licensee charge a reasonable fee in addition to a commission for the sale, solicitation, or negotiation of a contract of commercial lines insurance? The fee is disclosed in advance in writing The fee is not more than $500 The licensee is a licensed broker The licensee is a licensed consultant with an industry recognized professional designation
The fee is disclosed in advance in writing
Which of the following is a coverage limit included in the combination benefit? $10,000 in Disability $25,000 in Accidental Death $5,000 in Funeral $10,000 in Loss of Income
$25,000 in Accidental Death
The Pennsylvania Department of Insurance may issue a non-transferable temporary insurance license for up to ____ days to certain persons in specified circumstances. 120 180 90 60
180
The Pennsylvania Department of Insurance issues nontransferable insurance producer licenses for a maximum time period of _____ years. 2 4 5 3
2
Any time an agent's appointment is terminated, an insurer must notice the Commissioner within: 30 days 10 days 15 days 20 days
30 days
Insurance companies must update their do not call list at least once every _____ days. 45 60 90 31
31
For dependent benefits, the maximum percentage for a widow/widower is ______%. 75 66 2/3 100 51
66 2/3
Which of the following individuals would need to be licensed as a producer under the laws of Pennsylvania? A person engaged in the advertising of insurance in Pennsylvania An employee whose entire function is to train insurance producers A salaried agency employee that contacts prospective buyers on behalf of a producer A salaried employee that secures and furnishes written information for group insurance
A salaried agency employee that contacts prospective buyers on behalf of a producer
Which of the following individuals would need to be licensed as a producer under the laws of Pennsylvania? A salaried employee that secures and furnishes written information for group insurance A salaried agency employee that contacts prospective buyers on behalf of a producer A person engaged in the advertising of insurance in Pennsylvania An employee whose entire function is to train insurance producers
A salaried agency employee that contacts prospective buyers on behalf of a producer
Making statements that are false and maliciously critical of a competitor's company and its products while attempting to conserve several policies is an example of: Twisting Misrepresentation Defamation Illegal inducements
Defamation
The Commissioner has the power to do all of the following, except: Administer prelicensing education requirements for producers Establish new laws to regulate the business of insurance Investigate alleged incidences of unfair business practices Issues Certificates of Authority
Establish new laws to regulate the business of insurance
All of the following statements regarding the Pennsylvania statutes governing financial responsibility and the regulation of the automobile insurance in Pennsylvania are correct, except: The minimum amount of liability coverage is $15,000/$30,000/$5,000 Pennsylvania has a compulsory insurance law; everyone must buy a policy Policyholders have choice between full tort and limited tort coverage Insurers may issue digital Financial Responsibility Identification cards
Pennsylvania has a compulsory insurance law; everyone must buy a policy
An employer is liable for all of the following damages under the Workers' Compensation Act, EXCEPT: An injury caused by the injured employee while intoxicated Losses caused by disease more common among those in an industry versus those in the general population Occurrences reported to the employer after 21 days Losses due to the negligence of a worker's fellow employee
An injury caused by the injured employee while intoxicated
Which statements regarding insurance fraud is not correct? The Insurance Fraud Prevention Authority was established to support the effort to combat fraud The Commissioner established a Section of Insurance Fraud to investigate and prosecute fraud The penalty for a first fraud violation is up to $5,000 Selling insurance without a license is considered to be insurance fraud
The Commissioner established a Section of Insurance Fraud to investigate and prosecute fraud
In addition to the penalties previously imposed by a court, what is the maximum penalty the Commissioner can impose? $5,000 $1,000 $50,000 $10,000
$5,000
An insurance producer is responsible in a ________ capacity for all funds received or collected as a producer and may not mingle those funds with the producer's own funds or with funds held by the producer in any other capacity, without the express consent of the insurance entity on whose behalf the funds were received. Principal Trustee Fiduciary Custodial
Fiduciary
