MD Questions

Willful violations of insurance laws of this state are considered a) Crimes of moral turpitude. b) Misdemeanors. c) Felonies. d) Class A offenses.

b) Misdemeanors. Willful violations of insurance laws are misdemeanors. If convicted, a licensee or insurer can be fined up to $100,000.

Before a producer can receive authority to place business with MAIF, the producer must comply with the following actions, EXCEPT a) Attend MAIF training class b) Pay a $500 initiation fee c) Complete an application for authority to transact MAIF business d) Submit a surety bond in an amount of at least $10,000 or provide certification from an admitted insurer attesting to the fulfillment of the surety requirement

b) Pay a $500 initiation fee There is no fee to place business with MAIF.

Which of the following is an example of an unfair claims settlement practice? a) Failure to promptly settle a claim when liability has been clearly established b) Denying coverage after a reasonable investigation has been conducted c) Making claims payments which clearly indicate under which coverage payment has been made d) Using arbitration when the insured and insurer cannot reach agreement

a) Failure to promptly settle a claim when liability has been clearly established After a claim has been adjusted and is found to be covered under the policy, the insurer must pay the claim upon receipt of a signed proof of loss.

An insurance producer is required to notify the Commissioner of any felony convictions within how many days of the conviction? a) 10 days. b) 30 days. c) 45 days. d) 90 days.

b) 30 days. Insurance producers are required to report all felony convictions to the Commissioner's office within 30 days.

Agents who persuade insureds to cancel a policy in favor of another one when it might not be in the insured's best interest are guilty of a) Rebating. b) Twisting. c) Defamation. d) Misrepresentation.

b) Twisting. Twisting is a misrepresentation that persuades an insured or a policyowner, to his or her detriment, to cancel, lapse, or switch policies.

Mr. E wants to become an insurance advisor. His hiring manager informs him that he must post a single security bond to quality. How much money must Mr. E post? a) $500 b) $750 c) $1,000 d) $10,000

c) $1,000 Insurance advisers must post a single surety bond in the amount of $1,000.

Randy has taken 5 more continuing education credit hours than he will need for this reporting period. How many of these hours can be transferred to the next reporting period? a) 4 b) 5 c) 0 d) 2

c) 0 Excess continuing education credit cannot be carried forward to the next reporting period.

Bob's insurer decides to nonrenew his property policy. How much notice must the insurer give Bob? a) 15 days b) 30 days c) 45 days d) 60 days

c) 45 days When an insurer cancels or nonrenews a policy, the insured must be provided notice at least 45 days in advance.

When an insurer wants to cancel or non-renew a property insurance policy, it should give the insured advanced written notice of at least a) 90 days. b) 120 days. c) 45 days. d) 60 days.

c) 45 days. When an insurer desires to cancel or non-renew a property insurance policy, they must give advance written notice of at least 45 days. Additionally, the notice must advise the insured of their ability to obtain replacement insurance under the Maryland Property Insurance Availability Act or any other programs as may be available.

If an insurer decides to nonrenew a policy based solely on its geographic location, a) This is illegal. The Commissioner will issue a cease and desist order in response. b) The Commissioner must conduct a mandatory hearing on the matter. c) The insurer must file a notice to the Commissioner 60 days before the effective date of the nonrenewal. d) The insurer must file a notice to the Commissioner 30 days before the effective date of the nonrenewal.

c) The insurer must file a notice to the Commissioner 60 days before the effective date of the nonrenewal. Insurers may not refuse to issue, cancel or non-renew property and casualty insurance policies based solely on the geographic location of the risk unless the insurer files a written notice with the Commissioner stating the location to be affected at least 60 days in advance of the action.

The minimum amount of PIP coverage that may be issued on a private passenger auto policy is a) $500. b) $1,000. c) $2,000. d) $2,500.

d) $2,500. The minimum amount of coverage is $2,500 and higher limits may be purchased.

Which of the following is TRUE regarding the Maryland Workers Compensation Program? a) It is a limited medical benefit. b) It is an elective insurance option. c) It is a monopolistic state fund. d) It is a mandatory coverage.

d) It is a mandatory coverage. All employers with one or more employees (full-time or part-time) are required to provide Workers Compensation coverage in this state.

How often must the Commissioner examine domestic insurers? a) Annually b) Once every 2 years c) Once every 3 years d) Once every 5 years

d) Once every 5 years The Commissioner must examine the affairs, transactions, accounts, records, and assets of each domestic insurer at least every 5 years.

An employer may comply with Workers Compensation laws using all of the following methods EXCEPT a) Obtaining coverage through Maryland's competitive state Fund (Injured Workers Insurance Fund). b) Adding Personal Injury Protection (PIP). c) Purchasing Workers Compensation Insurance from a private insurer. d) Applying for and receiving approval to self-insure.

b) Adding Personal Injury Protection (PIP). Personal Injury Protection (PIP) is a component of auto insurance; the other answer choices are ways to comply with the workers compensation laws.

When an insurer desires to cancel or non-renew a property insurance policy, they must give advance written notice of a) 30 days. b) 45 days. c) 10 days. d) 15 days.

b) 45 days. When an insurer desires to cancel or non-renew a property insurance policy, they must give advance written notice of at least 45 days.

What is a premium finance company? a) A premium finance company pays premiums for large commercial clients when they surpass their grace period in exchange for fees. b) A premium finance company advances the premiums for clients in a lump sum, and in return, the client pays in monthly installments along with interest. c) A premium finance company establishes all the insurance rates for the year. d) A premium finance company is appointed by the Commissioner to monitor premium rates in the state of Maryland.

b) A premium finance company advances the premiums for clients in a lump sum, and in return, the client pays in monthly installments along with interest. The premium finance company advances the premium for the client and the client repays the premium finance company on a monthly installment basis with interest charges added.

In which of the following situations is it legal to limit coverage based on marital status? a) Divorce within the last six months of applying for insurance b) It is never legal to limit coverage based on marital status. c) Excessive number of divorces, as defined by the insurance code d) Legal separation during the application process

b) It is never legal to limit coverage based on marital status. Availability of insurance benefits or coverage may not be denied based on sex or marital status. Marital status may be considered for the purpose of defining persons eligible for dependent benefits.

An insurer in Maryland is going to begin using new rates for the largest corporation in Maryland. Which of the following statements apply to this situation? a) The insurer may delay the use of new rates for 30 days according to Insurance Administration requirements. b) The insurer may delay the use of new rates for as long as the Insurance Administration requires. c) The insurer may not delay the approval process at all due to the size of the client. d) Any of the above can be true.

d) Any of the above can be true. The Insurance Administration requires that the insurer delay the use of new rates for 30 days from the date of filing. If the Administration feels it is necessary, they may extend the waiting period. Under certain conditions involving larger commercial clients, this approval process is waived. If the Insurance Administration does not indicate otherwise, the insurer may assume the rates are approved for use.

When can an insurer cancel a workers compensation policy for reasons other than nonpayment of premium? a) With the Commission's approval b) Under no circumstances c) Only when the policy expires d) With a 45-day notice to the employer

d) With a 45-day notice to the employer If an insurer decides to cancel a workers compensation policy before its expiration, the insurer must provide the employer a cancellation notice delivered by personal service or registered mail at least 45 days prior to the date of policy cancellation.