Property and Casualty Exam- Louisiana

Insurer examinations must occur no less frequently than every

5 years.

The dwelling insured on HO-2, HO-3, or HO-5 forms is covered for replacement, provided that it is insured for at least what percentage of replacement cost on the date of loss?

80%

The policy conditions define

How parties to the contract must act following a loss.

Which of the following endorsements is used to insure Coverage C (personal property) for values beyond the limitations of the homeowners policy?

Scheduled personal property endorsement

Property insurance which provides $100,000 coverage for a building and $50,000 coverage for personal property at a single location is called

Specific coverage.

All of the following are characteristics of the dwelling policy EXCEPT

The dwelling must be owner-occupied.

A policyholder has an equipment breakdown policy with a $200,000 limit. If a boiler explosion causes $100,000 damage to the boiler itself, $50,000 damage to the insured's building, and $30,000 of expediting expenses, how much will the insured collect under the policy?

$175,000

Uninsured Motorist property damage coverage is subject to a deductible of

$250.

A grave marker was damaged by vandals. It would cost $3,000 to have the damage repaired. Under these circumstances, how much would a homeowners policy pay?

$3,000

In the computer fraud crime coverage form, what limit is placed on each occurrence of the loss of manuscripts, drawings, or records?

$5,000

Under Coverage C of a farm policy, what is the limit payable on business property located away from the premises?

$500

The general property policy form is used for other-residential and non-residential structures and their contents such as

1. Commercial structures. 2. Cooperative associations. 3. Apartment buildings. 4. Any of the above would be covered under this form.*

A producer has been notified by the Commissioner to stop using an unapproved trade name. How many days does the producer have to change the trade name before facing a fine?

10 days

If a commercial policy, in effect for less than 60 days, is to be canceled for nonpayment of premium, how much prior notice must the insurer give to the first named insured?

10 days

Terrorism Risk Insurance Program Reauthorization Act of 2015 has extended the TRIA to the year

2020

The limit on controlled business is

25%.

How long is a waiting period upon purchase of flood coverage through NFIP?

30 days

Under the dwelling policy, if an insurer chooses to repair or replace damaged or lost property, it must inform the insured within how many days of receiving proof of loss?

30 days

Under the Workers Compensation Act, what percentage of the employee's wages will the surviving spouse with no children receive in the event of the employee's death?

32 1/2%

Which of the following statements is true regarding the premium computation for workers 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.

Coverage F (medical payments) under a homeowners policy would cover

A residence employee who is injured on the job.

The personal injury liability endorsement to an HO policy applies to all the following EXCEPT

A third party breaks a leg when the insured knocks him down.

An insured pays a $100 premium every month for his insurance coverage, yet the insurer promises to pay $10,000 for a covered loss. What characteristic of an insurance contract does this describe?

Aleatory

Which of the following would NOT qualify as a hired auto?

An auto borrowed from an employee

What is a foreign insurer?

An insurer with a home office in another state

Employers liability insurance, Part Two of a standard workers compensation and employers liability (WC&EL) policy form, excludes

An intentional act that is caused by the insured.

Funding for the operation and administration of the Louisiana Insurance Guaranty Association comes from

Annual assessments paid by member insurers.

Should 2 or more insurers issue a combined Standard Fire Policy insuring a single risk, in the event of a loss, the insured must notify

Any of the insurers providing coverage.

While an insured's covered auto is in the repair shop following damage caused by a collision, the insured would have coverage for which of the following vehicles under a personal auto policy?

Any vehicle not owned by the insured, but furnished for use while the covered auto is out of normal use because of repair

Replacement cost coverage is provided in both the broad and special form dwelling policies when

At least 80% of the replacement cost

The garage coverage form is used to insure

Auto businesses, such as auto dealers, service stations, and auto repair shops.

An individual was involved in a head-on collision while driving home one day. His injuries were not serious, and he recovered. However, he decided that in order to never be involved in another accident, he would not drive or ride in a car ever again. Which method of risk management does this describe?

Avoidance

Which bonds are issued to secure the release of a person from jail pending a courtroom appearance?

Bail bonds

Any clause, condition, or provision contained in a fire policy contrary to the valued policy law will

Be considered to be null and void.

If the Commissioner believes that a producer may be in violation of an insurance law or regulation, what may be issued?

Cease and desist order

A liability policy that provides coverage for a claim for injury or damage if the claim is first reported or filed against the insured during the policy period is called

Claims-made form.

A producer who fails to segregate premium monies from his own personal funds is guilty of

Commingling

If an insurance company cancels a producer's appointment, the

Commissioner must be notified within 30 days.

Workers compensation laws provide all of the following types of benefits EXCEPT

Compensatory benefits.

Because an insurance policy is a legal contract, it must conform to the state laws governing contracts which require all of the following elements EXCEPT

Conditions.

Under which type of coverage does the insurer agree to pay for bodily injury or property damage liability which the insured has agreed to assume under a written contractual agreement?

Contractural liability policy

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

Costs the insured incurred in hiring an attorney.

Because an insured owns a lot of expensive jewelry, her insurance agent has advised her to purchase a scheduled personal property endorsement. If the insured adds this endorsement to her homeowners policy, which of the following statements would be correct?

Coverage C limits will no longer apply to the jewelry insured by the endorsement.

In a dwelling policy, which of the following provides coverage for additional living expenses incurred by an owner-occupant in the event a covered peril makes the premises uninhabitable due to a covered loss?

Coverage E

An automobile liability insurance policy, in addition to providing coverage to the insured while within the state of Louisiana, must provide coverage for the insured while operating the vehicle in all of the following places, EXCEPT

Cuba

In property and casualty insurance, what is the term for the amount of a loss that the insured must cover out of pocket, and the insurer will only pay for the additional amount of the loss above this limit?

Deductible

Which commercial crime form would provide coverage for a loss that did not necessarily happen during the policy period but was revealed during the policy period?

Discovery form

According to the Fair Credit Reporting Act, all of the following would be considered negative information about a consumer EXCEPT

Disputes regarding consumer report information

An employee drives a company auto, but does not own a vehicle herself. What endorsement could be added to the insurance policy covering the company auto that would provide coverage to the employee when she drives someone else's car for her personal use?

Drive other car coverage

Residential structures, including individual condominium units, and their contents are insured by what part of the National Flood Insurance Program?

Dwelling policy form

All of the following are excluded in the equipment breakdown basic policy EXCEPT

Explosion of steam boilers.

Which of the following are the authorities that an agent can hold?

Express and implied

When an insurance agency published an advertising brochure, it emphasized the company's financial stability and sound business practices. In reality, its financial health is terrible, and the company will soon have to file for bankruptcy. Which of the following terms best describes the advertisement?

False financial statement

The requirement that agents not commingle insurance monies with their own funds is known as

Fiduciary responsibility.

An insurer may cancel or nonrenew a Homeowners policy based on any of the following, EXCEPT

Fraud on the part of an insured

If a farm building or structure is vacant or unoccupied, which is true?

If for 120 consecutive days, the limits applicable to the building and its contents are reduced by 50%.

In liability insurance policies, supplementary payments are made

In addition to the limit of liability.

What is surplus lines insurance?

Insurance placed with an unauthorized insurer

All of the following are factors in the determination of actual cash value EXCEPT

Insurance premium paid.

A deliberate act that causes harm to another person, regardless of whether the harm is intended is called a(n)

Intentional tort

Which of the following would NOT be covered by HO liability insurance?

Intentional tort

After a storm dumps several inches of snow, an insured spends several hours clearing his sidewalk and driveway. Later that night it begins to sleet. Before the insured can clear his walks again, his neighbor slips and falls while walking past the insured's house, breaking his arm. Which defense will reduce recovery for the neighbor's injury?

Intervening cause

The additional living expense coverage on homeowners policies

Is intended to allow the family to maintain its normal standard of living.

The Residential Condominium Building Association Policy (RCBAP) is used for residential condominium building associations to cover the entire building under one policy. Which of the following statements about RCBAP is true?

It does not protect the individual owner from loss to personal property owned exclusively by the unit owner.

If a guest's property is lost or damaged while on the insured's premises or in their control, Crime Coverage Form L - Liability for Guests' Property - Premises covers the insured's

Legal liability.

Under Commercial Crime Coverage Form K - Liability for Guests' Property - Safe Deposit Box, which covered is included?

Loss resulting from the insured's release of any other negligent party from their legal liability

To comply with requirements for insurance for public liability under the Motor Carrier Act of 1980, which endorsement is added to motor carrier coverage form?

MCS-90

Rates that are established based on the similarities of the risk with other risks are known as

Manual rates.

Which of the following covers a carrier for liability for loss to cargo while it is being transported in a truck?

Motor truck cargo policy - truckers form

A loss has occurred before the first report has been filed on a value reporting coverage form. Which is NOT true?

Never more than 75% of the loss is paid.

Duties of the insurer found in property policy conditions include all of the following EXCEPT

Notify the insured in the event of financial difficulty.

Workers compensation benefits are provided for an employee injury or death that arises out of the course of normal employment in all of the following situations EXCEPT

On his evening stroll, an employee of an advertising company is injured while watching a competitor's billboard sign being removed from an advertising site.

Which professional liability form provides form coverage for liability arising out of malpractice, error, or mistakes made in rendering professional services?

Physicians, surgeons and dentists malpractice

Which of the following liability exposures is most likely for a small specialty clothing retail boutique?

Premises liability exposure

The value placed on property insured under a fire insurance policy is used to determine the policy's

Premium.

Pertaining to insurance, what is the definition of a fiduciary responsibility?

Promptly forwarding premiums to the insurance company

All of the following are true regarding rebates EXCEPT

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

Under the Fair Credit Reporting Act, if the consumer challenges the accuracy of the information contained in his or her report, the reporting agency must

Respond to the consumer's complaint.

For insurance purposes, when an insured loses property to another because the person used violence or threat of violence to gain the property, this is defined as

Robbery.

The policy provision found in property insurance policies that prevents the insured from collecting twice for the same loss is called

Subrogation.

Which of the following terms refers to a person's ability to do some work or the need to do alternative work?

Temporary partial disability

Which of the following statements is true regarding the commercial general liability policy's Coverage C - Medical Payments?

The coverage is considered good will because payments are made without regard to fault.

Which of the following is INCORRECT in regard to the conditions found in a workers compensation policy?

The insurer may inspect the workplace after giving the insured 5 days' notice.

Who is NOT an insured for liability on a BAP?

The owner of a car the insured borrows

A temporary license may be issued without examination to all of the following, EXCEPT

The spouse of a retired producer.

Which of the following is an example of a producer's fiduciary duty?

The trust that a client places in the producer in regard to handling premiums.

An uninsured motor vehicle includes all of the following EXCEPT

The vehicle has no liability bond or insurance in force.

Which of the following losses would most likely NOT be covered under Coverage A in the dwelling policy?

Theft of a renter's lawnmower used to service the premises

The business income coverage form covers consequential loss of business income that occurs when a business must suspend operations because of a direct loss. Which of the following terms best describes the nature of this type of coverage?

Time element

Shipbuilders and repairers are covered by the

U.S. Longshore and Harbor Workers Compensation Act.

The process an insurer uses to evaluate applications and determine if a policy should be issued and on what terms, conditions, and rates is known as

Underwriting.

What is the name for the type of property damage coverage that protects the insured or the covered auto in an accident with someone who does not have coverage?

Uninsured motorist

The cost of restoring farm records is an additional coverage offered under a farm policy. How much will the policy pay to restore the records?

Up to $2,000

Which of the following is a statement that is guaranteed to be true, and if untrue, may breach an insurance contract?

Warranty

Under the business auto coverage form, mobile equipment is covered for liability insurance

When being carried or towed by a covered auto.

When are the limits for uninsured motorist coverage set?

When the coverage is purchased

When would uninsured motorist coverage apply?

When the other party is legally liable but has no insurance

Federal law makes it illegal for any individual convicted of a crime involving dishonesty or breach of trust to work in the business of insurance affecting interstate commerce

Without receiving written consent from an insurance regulatory authority.

Which of the following would NOT be covered by medical payments to others in Section II of your HO policy?

You are walking your neighbor's dog and it bites someone.