FSLSO Exam

As a stipulation of being an eligible surplus lines insurer in FLorida, who is the insurer required to appoint as its agent for service of process to protect residents of the state of florida that hold insurance contracts issued by insurers domiciled in another state or jurisdiction outside of the United States

Florida's chief financial officer

If cancellation is for non payment of premium, the surplus lines insurer must give the named insured at least ___ days writen notice of cancellation including the reason for cancellation

10

The surplus lines agent's self appointment must be renewed during the agents birth month every:

24 months

If an insurer fails to provide the 45 day written notice of cancellation or nonrenewal, the coverage provided to the named insured shall remain in effect until __ days after the notice is given or until the effective date of replacement coverage obtained by the named insured, whichever occurs first

45

quarterly affidavits are required to be filed within __ days of the end of the quarter

45

Any individual who has been licensed by the department of financial services as a surplus lines agent may be self appointed without additional written examination if his or her application for appointment is filed with the department within ___ months following the date of cancellation or expiration of the prior appointment

48

Which does not apply when an agent or individual represents, aids, solicits, or negotiates surplus lines insurance contracts with an ineligble, unauthorized insurer

Agent or individual is not responsible for payment of surplus lines premium tax

The Disclosure statement or insured's acknowledgement is not required for which type of coverage

Commercial Aircraft hull and/or liability

Which of the following is the wording that is specifically required by law to be placed on evidence of insurance providing coverage to the insured?

This insurance is issued pursuant to the Florida Surplus Lines Law. Persons insured by surplus lines carriers DO NOT HAVE the protection of the Florida Insurance Guaranty Act to the extent of any right of recovery for the obligation of an insolvent unlicensed insurer

The ___ brought conformity to multistate risks and eligibility requirements for non-admitted insurers

a. NRRA

All florida licensed surplus lines agents are subject to ___ review a. compliance b. annual c. performance d. licensing

a. compliance

All surplus lines insurance contracts procured through unauthorized insurers in accordance with the surplus lines law shall be a. fully valid and enforceable b. invalid and not enforceable c. the responsibility of the surplus lines agent placing the coverage d. determined by the department of financial services if the contract is valid or invalid

a. fully valid and enforceable

according to the Florida diligent effort requirement, how many rejections in the admitted Market must be received for a residential property exposure with a replacement cost of 700,000 or more before placing a policy in the Surplus lines Market? a. one b. three c. four d. five

a. one

Florida law requires most premiums charged for surplus lines coerages to be subject to what? a. premium receipts tax b. underwriting fees c. rate and form approval d. none of the above

a. premium receipts tax (4.94%)

Surplus lines insurance represents only a small segment of the overall ____ market and is focused primarily on specialized risks a. property-casualty b. personal liability c. commercial liability d. windstor,

a. property-casualty

if an unauthorized insurer or person authorized by the insurer binds a risk as to Surplus lines coverage placed under the Surplus lines law, and the premium is paid by the insured to the originating agent, which of the following statements is correct?

a. the premium received by the Surplus lines agent or the originating agent is deemed to have been received by the insurer and the insurer is liable to the insured for claims or unearned premiums

Under 626.9372, F.S. (disclosure statements of certain information required; liability claims), insurers are required to provide the following info for liability policies issued on or after Oct. 1 2009 except: a. name of the insurer b. name of each insured c. address of each insured d. statement of any policy or coverage defense

address of each insured

If a surplus lines policy is cancelled "flat" and taxes were paid, how much of the tax is returned

all of the tax

How much is the premium receipts tax assessed on all taxable gross premiums charged for surplus lines insurance exported by a surplus lines agent? a. 15 b. 4.94 c. 10.94 d. 25

b. 4.94

It is the responsiblity of the surplus lines agent to keep a full adn true record of reach surplus lines contract, for a perid of ___ years a. 3 b 5 c. 10 d. 2

b. 5

How many days from the eff date of coverage should a copy of the policy, cover note or other confirmation of coverage be delivered to the insured? a. 30 b. 60 c. 90 d. 10

b. 60

Which of the following are not considered to be premium for purposes of calculation taxes

service office fees

Insurance coverages on the following subjects of insurance exported pursuant to this section (626.917, F.S. - Eligibility for export; wet marine and transportation, aviation risks) are tax exempt, but are subject to the service fee and should be included in your monthly transaction reports as non-taxable a. commercial boats, commercial automobiles, commercial aircraft, aviation, and ocean marine carge, hangarkeepers liability b. commercial aircraft, commercial boats, hangarkeepers liability, aviation and ocean marine cargo, airport and products liability c. commerical aircraft, commercial boats, zookeepers, aviation, ocean marine cargo, airport and products liability d. commercial boats, commercial advertising, commercial aircraft, aviation, and ocean marine cargo, hangarkeeers liability

b. commercial aircraft, commercial boats, hangar keepers liability, aviation and ocean marine cargo, airport and products liability ***No commercial auto, zookeepers, or commercial advertising***

Which of the following is not exempt from the surplus lines tax law? a. motor truck cargo b. commercial inland marine c. county or municipality or any other agencies d. state government or its agencies

b. commercial inland marine

What three risks are typically written in the non-admitted market? a. distressed, unique, standard b. distressed, unique, high-capacity c. distressed, high-capacity, standard d. none of the above

b. distressed, unique, high-capacity

This term is defined as a means to place, with an unauthorized insurer under the surplus lines law, insurance covering a subject of insurance resident, located or to be performed in this state a. diligent effort b. export c. insurance policy d. stamp

b. export

Coverage has been bound by an eligible, unauthorized insurer or a person authorized by the insurer to bind coverage and premium has been received by the originating agent or retail agent. If a loss should occur, who would be liable for payment of the loss and any unearned premiums? a. surplus lines agent b. insurer c. retail agent d. none of the above

b. insurer

According to 626.916, F.S. (Eligibility for export), it is the responsibility of the _____ to verify that a DE has been made by requiring a properly documented statement of diligent effort from the retail or producing agent. a. insured b. surplus lines agent c. Florida surplus lines service office d. florida department of financial services

b. surplus lines agent

What is the regulatory focal point of the surplus lines marketplace? a. volume of business written by surplus lines insurers b. surplus lines agent c. percentage of surplus lines business compared to the overall market d. property exposure for a given surplus lines insurer

b. surplus lines agent

What is the maximum "per policy fee" that a surplus lines agent may charge in accordance with Florida statute? a. 75 b. there is no maximum; however, it must be reasonable c. 50 d. 100

b. there is no maximum; however, it must be reasonable

What is the purpose of the Florida Surplus Lines Law? a. To subject certain insurers and persons representing or aiding such insurers to the jurisdiction of the courts in suits by insureds or beneficiaries under insurance contracts b. to provide orderly access for the insuring public of this state to insurers not authorized to transact insurance in this state, through only qualified licensed surplus lines agents in this state c. To allow for self-procurement of coverage from unauthorized insurers d. to allow for competition by unauthorized insurers with authorized insurers

b. to provide orderly access for the insuring public of this state to insurers not authorized to transact insurance in this state, through only qualified licensed surplus lines agents in this state

Bob, a surplus lines agent, was competing for an account. it was determined that if bob could absorb the tax and service fee on the account, he would become more competitive and therefore able to get the account. how does the surplus lines law address this situation?

bob is prohibited from absorbing the tax and service fee for any reason, or rebating all or any part of the tax, service fee or his commission

Who is entitled to charge and retain the per-policy fee?

both the retail agent and the filing surplus lines agent

a Florida Surplus lines insurance is required to have a maintain Surplus as to policyholders of not less than____ a. 5 million b. 20 million c. 15 million d. 50 million

c. 15 million

Which definition best describes the term for foreign insurer in the Florida surplus lines market? a. formed according to the requiremens of a foreign country and is domiciled in that foreign country b. insurers that satistfy specific statutory and regulatory financial criteria c. U.S. domiciled unauthorized insurer eligible to operate in a state other than the state in which it is domiciled d. U.S. domiciled unauthorized insurer licensed in the insured's home state and in another U.S. state

c. U.S. domiciled unauthorized insurer eligible to operate in a state other than the state in which it is domiciled

The purpose of the Florida Surplus lines service office (fslso) is all of the following except: a. protect consumers seeking insurance in this state b. permit surplus lines insurance to be placed with approved surplus lines insurers c. act as a regulatory agency on behalf of the department of financial services d. A and B only

c. act as a regulatory agency on behalf of the department of financial services

Which of the following is a requirement an insurer must meet before they will be approved to provide coverage as an eligible surplus lines insurer in Florida? a. be approved by the courts to sell insurance in this state b. be a licensed insurer in their state or country of domicile for a period of at least 5 years c. be an authorized insurer in their state or country of domicile for at least 3 years and authorized to write the kind(s) of insurance they wish to write in this state d. be located in the U.S.

c. be an authorized insurer in their state or country of domicile for at least 3 years and authorized to write the kind(s) of insurance they wish to write in this state

in 2011 the florida legislature passed a bill that exempted surplus lines agents from having to complete the diligent effort search on certain commercial coveraeges, including all of the following except: a. commercial property b. general liability c. commercial residential property d. errors and omissions

c. commercial residential property

Which is a significant difference between operating as an unauthorized insurer and an admitted insurer? a. processing b. agent licensing c. rate, rule, and form filings d. taxation

c. rate, rule, and form filings

Surplus lines agents' actively transacting business must comply with which of the following requirements of the FSLSO? a. compile all policies ertten and report them at the end of each month b. report all transactions at the end of each quarter c. submit policy info within 30 days from the eff date of coverage d. submit policy info within 21 days from the eff date of coverage

c. submit policy info within 30 days from the eff date of coverage

Any ___ who is an officer, employee, stockholder or director of an incorporated surplus lines insurance agency shall remain personally ad fully liable and accountable for any wrongful acts, misconduct or violations of any provisions of the surplus lines law committed by such licensee or by any person under his/her direct supervision and control while acting on behalf of the corporation a. insurer b. wholesale agent c. surplus lines agent d. lloyds broker

c. surplus lines agent

What types of risks are eligible for export by virtue of being placed by a licensed and appointed surplus lines agent and an insurer that is eligible? a. fire and windstorm b. windstorm buy-back deductible c. wet-marine, transportation, and aviation risks d. personal marine and personal aircraft

c. wet-marine, transportation, and aviation risks

Surplus lines agents are prohibited from making ____ of business not directly procured by him/her from eligible surplus lines insurers, or out of state agents on behalf of FLorida insured

courtesy filings

Upon placement of surplus lines coverage, the surplus lines agent shall promptly issue and deliver to the named insured evidence of insurance consisting of the actual policy as issued by the insurer or, if the policy is not then available, __,___, or ____

cover note, other confirmation of insurance, certificate

All surplus lines licenses are required to notify DFS and FSLSO within ___ days after a change of name, residence address, principal business street address, mailing address, contact telephone numbers, including a business telephone number, or email address a. 60 b. 15 c. 90 d. 30

d. 30

According to 626.9201 F.S. (notice of cancellation or nonrenewal), an insurer issuing a policy providing coverage for property, casualty, surety, or marine insurance shall give the named insured at least _____ days advance written notice of non-renewal a. 30 b. 60 c. 15 d. 45

d. 45

An alien insurer must have and maintain in the U.S. a trust fund, for the protection of its policyholders in the U.S. in an amount not less than a. 25 million b. 50 million c. 10 million d. 5.4 million

d. 5.4 million

The surplus lines agent shall pay interest on the amount of any delinquent fees due at the rate of ____ percent per year, compounded annually, beginning the day the fees become delinquent a. 5 b. 3 c. 10 d. 9

d. 9

Surplus lines insurers are a stabilizing influence on the overall market due to which factors? a. tailoring coverage to meet insureds' needs b. acting as safety valve to prevent public outrage if no market existed c. slow response to the needs of the market d. A and B only

d. A and B only

An insurer domiciled outside the US and operating in the US on a surplus lines basis, who also must meet minimum capitalization requirements established in each state to receive placement eligibility from surplus lines licensees is a/an: a. us domiciled insurer b. foreign insurer c. admitted insurer d. alien insurer

d. alien insurer

The regulatory framework for surplus lines protects both consumers and states in which of the following ways? a. permits consumers to access surplus lines insurers without physically leaving their state b. uses specially trained and licensed surplus lines agents to assist consumers c. establishes a system for levying and collecting taxes d. all of the above

d. all of the above

Which of the following is a possible penalty for aiding and abetting an unauthorized insurer? a. liability for all unpaid claims b. conviction of a 3rd degree felony c. suspension or revocation of all insurance licenses d. all of the above

d. all of the above

Which coverage is not commonly written by surplus lines insurers? a. products liability b. professional liability c. special events liability d. automobile liability

d. automobile liability

A managing general agent's primary responsibilit is to follow all of the guidelines of the board ___ granted by the insurer a. marketing plans b. claims processing c. comission plan d. binding authority

d. binding authority

As a condition of holding a florida surplus lines license, all surplus lines agents are considered members of the ____ a. department of financial services b. florida association of insurance agents c. professional insurance agents association d. florida surplus lines service office (fslso)

d. florida surplus lines service office (fslso)

What insured info is not required on the first page of the evidence of insurance delivered to the insured? a. name, address, and identification number of the surplus lines agent as well as the name and address of the producing agent b. statement declaring the insured does no have protection under the Florida insurance guaranty act c. total premium, tax, and service fee charged d. name and address of the chief financial officer

d. name and address of the chief financial officer

Surplus lines agents who have transacted business are requred to fle with FSLSO a ___ affidavit confirming all surplus lines business transacted has been reported as required a. monthly b. bi weekly c. bi monthly d. quarterly

d. quarterly

Which example best describes Diligent Effort? a. an individual license to handle the placement of insurance coverage with unauthorized insurers and to place Such coverages with authorized insurers b. an unauthorized insurer which has been made eligible by the department to issue insurance coverage under the Surplus lines law c. to place with an unauthorized insurer, insurance covering a subject of insurance resident, located or to be performed in this state d. seeking coverage and having been rejected by at least three authorized insurers

d. seeking coverage and having been rejected by at least three authorized insurers

before Insurance can be procured from unauthorized insurers, certain conditions must be met which of the following is incorrect? a. the insurance must be eligible for export b. the insurer must be an eligible surplus lines insurer c. the insurance must be placed through a Florida licensed and appointed surplus lines agent d. the full amount of coverage is available from authorized insurers; however, the rates are too high

d. the full amount of coverage is available from authorized insurers; however, the rates are too high

Which is not a condition that must exist to export a risk in Florida

deductible amounts must be higher than admitted insurers

Which of the following conditions must exist before exporting a risk in Florida? a. risk is not procurable from admitted insurers b. premium rate is lower than the admitted market c. policy must not be more favorable as to coverage or rate d. deducible amounts must be different from admitted insurers e. A and C only

e. A and C only

A surplus lines agent must file information on a policy with FSLSO within 21 days from the effective date

false. 30 days

which is not an area of regulation for a transaction placed in the surplus lines market

forms approval

Which best illustrates how insurance is procured through surplus lines market access?

insurance buyer-retail agent-surplus lines agent-surplus lines insurer

What are 3 responsibilities required of surplus lines agents?

maintaining a full and accurate record of policy documentation for 5 years, filing quarterly affidavits, if applicable, and collecting taxes and service fees

Which risk is exempt from the premium receipts tax and service fee

municipality

Which of the following is not a serivce provided by the FSLSO

permit surplus lines insurance to be placed with eligible admitted insurers

Which of the following is a purpose of the Agent compliance review program?

provide educational assistance

Who is responsible for obtaining the signed disclosure statement and retaining it in the policy file

retail agent

florida's surplus lines agents must be ___ prior to transacting business

self-appointed

Which of the following is required to be listed on the face page of a surplus lines insurance policy

surplus lines agent name and address

Which two features make surplus lines coverage more attractive than the residual markets

terms of coverage and choice of limits

which insurers are not required to be reviewed and approved by the Office of Insurance Regulation before they can insure Florida risks

those authorized by the Federal Government pursuant to NRRA

The term "premium" includes any assessment, or any membership, policy, survey, inspection, service or similar fee or charge in consideration for an insurance contract. This includes the policy fee but NOT the service office fee. a. true b. false

true

A contract written in the surplus lines market is as ____ as a contract written in the admitted market

valid