PSI General Insurance

Which of the following statements is true regarding the materiality of representations and concealment

It is determined by the effect of the facts on each party by the contract in determining his or her estimate of the disadvantages of the contract

How is an admitted insurance defined according to the California DOI

It transacts insurance according to the law of the state of California

When may a repersentation be withdrawn?

Only before the insurance is in effect

If an insurer pays an insured to $25,000 in lost wages, $45,000 for positions visits and hospital costs, and $15,000 for physical therapy treatment, and later finds out that the claim was fraudulent the insured may be fined as much as

$170,000. Punishable by up to hundred and $50,000, or double the value of the fraud whichever is greater

All of the following factors can be used according to the insurance code in California, to determine auto insurance policy rates. In addition to any other factors, the insurance commissioner is allowed to adopt and include regulations

, The driver safety record of the insured, ( tricky)

Minimum number of required continuing education hours that a fire and casualty brokers-agent must meet

24 hours every renewal. - Which must include three hours of ethics

What else must an applicant for a fire and casualty license, life agent license, or personal lines agent license complete, in addition to pre-licensing classroom study

A 12-hour course on ethics and the California code

Which of the following best describes a binder

A contract of insurance that is temporary, only in writing, between the insured and the insurer

Company that regulates and binds ceding reinsurance on behalf of an insurer is considered

A managing general agent

In California, excess and surplus line coverage needs to be placed through

A surplus lines broker

An insurer that has a ceritific of authority is Californai is?

Admitted

Under section 770 of the insurance code true regarding unfair or deceptive trade practices, which of the following is an unfair trade practice

An entity cannot demand the insurance to be placed with a particular agency

How is an insurance broker defined according to the California insurance code

An individual who receives commissions for transacting insurance on behalf of another person, but not on behalf of an insurance company

Insureds, especially those with higher premiums, very often do not have the immediate funds to pay required premiums, such as automobile liability insurance. In many cases, insurers will provide premium financing which of the following statements is correct regarding this financing, according to the requirements of the California insurance code

Any insurance that assists in premium financing services is required to maintain all records regarding such financing for three years after transaction

When must insurance records of insurance agents and isurance brokers be made avabilable to the insurance Commissioner?

At all times

When is a property and casualty agent required to inform an insured of any conditions which may be precedent to coverage regarding a personal auto policy

At time of application

All licensees must be appointed by the insurance companies they represent in order to sell the lines of insurance that a particular insurer may offer. Assuming that a licensed fire and casualty broker/agent has received the proper appointment, what type or types of insurance, from the following list, me the individual self

Auto property insurance

An applicant for insured does not reveal information trhat the insurer would rely upon to issue the policy. This is a/an?

Concealment

In the business of insurance, the active concealment is defined by all of the following statements except

Concealment does not occur if no inquiry is made

What must a licensee do in order to surrender for cancellation a license in their possession

Deliver the document itself to the Commissioner

Which of the following statements is not true? A fire and casualty managing

Does not have the authority to collect premium for producing broker-agents

All of the following are areas of market regulation Execpt?

Employee training

Where would an insured, that is in the business of importing exotic animals from Africa, most likely go to obtain insurance coverage

Excess and surplus lines insurer

What must a life agent, travel agent, or fire and casualty insurance agent do in order to act as an agent of a particular insurer

File an appointment with the commissioner

What must an insured do who accepts an application from an agent who is not specifically appointed by the insurer, and then issues a policy from that application

Forward to the Commissioner a notice of appointment within 14 days of receipt of application

Which of the following ways are the least professional and the least likely to correctly identify the loss exposure? You

Get a copy of all current policies and declarations what coverage they have been carrying and how much they have been paying

Property-casualty broker-agent, when properly appointed may transact all of the following except

Health insurance

Which of the following describes an insurer who has enough financial resources only to provide for all of its liabilities and for all reinsurance of all outstanding risks

Insolvent

According to the California insurance code, a binder is deemed a valid insurance policy for the purpose of providing that the insured had the insurance coverage specified in the binder for each of the following types of insurance except

Life insurance

All of the following are characteristics of and ideally insurable loss exposure except

Losses that are catastrophic

It can be very tempting for commission-based insurance sales person to perform unethical activities in order to make a sale. Of the following, which would not be a reason why the agent might be tempted to act on ethically

Maintaining the best interest of customers first and foremost

The state law that regulates insurer practices regarding underwriting, sales, rate-making, and claims handling are called

Market conduct regulations

What is required of a broker-agent before appointing an insurance solicitor

Must hold a permanent license

The type of transaction and insurances that a surplus lines broker is involved with are

Nonadmitted insurers, property and casualty insurances

A fire and casualty managing general agent can do all of the following except

None of these are excluded from the power and authority given to fire and casualty managing agents

All of the following are requirements for a notice by mail to an insured by an insurer except

Notice must be sent with return receipt required

Insurers may purchase reinsurance for a variety of reasons. Which of the following is not a good example of the use of reinsurance? Insurer purchases reinsurance

Only on the below average business submitted to them, keeping a good business for themselves

In the state of California, how is a domestic insurer defined according to the California DOI code

Organized, characterized, or incorporated under the laws of the state of California

If an insured assigns a claim form for a claim which is fraudulent, the insured may be guilty of

Perjury

Every admitted insurer in the state of California is required to maintain a unit or division to investigate which of the following

Possible fraudulent claims made by insureds

Filing system is used in California for most lines of insurance

Prior approval

The method that the California DOI uses to approve or dissapprove rate fillings for various types of insurance such as homeowners and automoblie is know as?

Prior approval method

A repersentation as to the future is consitered which of the following?

Promise

RW and Associates is an agency which represents BLG Insurance Corporations. RW and Associates may leave the names BLG Insurance Corporation in its advertisements by clearly stating the relationship between the two businesses in any of the following ways EXCEPT?

RW and Associates underwriting for BLG insurance Corporation

The negotiation of a policy involves which of the following?

Sending the prospect and email suggesting that they buy a certain type of policy

Any person who makes a loan of money using real property as security

Shall not make available the information contained in a borrowers fire or casualty policy if the borrower has filed a statement with the lender that they do not want the lender to disclose this information

The California insurance code

Requires agents to keep record of any compensation they may have received for their services involved with premium financing

It is vital that an insurance agent/broker fully assesses, analyze, and review a particular risk in order to determine the proper insurance coverage needed. The least likely way to do this is to

Review all coverages in their current insurance contracts as well as the premium paid

The execution of a policy involves which of the following?

Signing a covering note

The insurance code defines an insurance broker is

Someone paid to transact insurance on behalf of another person, but not on behalf of the insurer

What type of insurance company has owners who are stockholders in the company and to share in the profits of the company

Stock insurance companies

What would the commissioner likely do if an agent induces a client to co-sign a loan

Suspend the agent's license

An orgainzation will cease to exist as an entily, eligible to hold alicence, for all of the following reasons EXCEPT?

Termination of a key employee

What will happen when an agent appointment to an insurance company is terminated and the agent has no other appointments with any other insurance company

The agents permanent license becomes inactive

What does it mean if an agent's license is an active

The agent cannot transact any insurance business for which a valid, active licenses required

Entities are organizations that provide coverage for medical expenses in California are subject to the jurisdiction of the state department of insurance (with several specific exceptions), unless these entities or organizations can demonstrate that during the course of providing these services, they are subject to the

The answer is all of the above: an agency of the federal government, another California governmental agency in the state of California, and the agency of another state

For more serious offenses and convictions, an application for a license can be denied without a hearing. Which of the following circumstances would allow for an application to be denied for an insurance license, without a hearing

The applicant for the license had a license denied for cause within the previous five years

I which of the following circumstances can the insurance Commissioner denying the application for an agent's license without a hearing

The applicant has had a license application denied for cause within the past five years

If an insured honestly believes their last ticket was more than 36 months ago and the policy was issued, and then the insurers car is stolen. While processing the claim the insurance company discovers the insured had received his most recent traffic ticket for speeding 32 months ago why was the claim still paid in the policy continued

The concealed facts were not material. They would have paid the claim anyway

Which of the following is the only reason that an insurer can cancel an automobile insurance policy

The drivers license of the individual who usually operates the vehicle and who is insured by the policy, has had his or her license suspended temporarily

Where do most states require insurers to file policy forms

The insurance department

The California insurance code requires property insurance policies specify all the following information except

The insured's address

it is a violation of the California insurance code to actAs a producer for a non-admitted carrier unless

The producer is a surplus lines broker

The California insurance code contains requirements concerning the requirements for name approval for all insurance licensees. These requirements include which of the following

The professional designation CPCU is accountable following the name of any property and casualty broker-agent who has completed the requirements for chartered property and casualty underwriting

An agent who diverts/co-mingle's premium dollars for the agents own use is guilty of

Theft

The word Materiality applies to the concept of concealment and representation. Which of these is true in this regard

Themateriality of any information in this regard is determined by the influence of the facts on each party in determining their estimates of the disadvantages of the proposed contract

Which of the following statements is true regarding insurers with admitted status in California

They may not use race, color, religion, or national origin as a condition to use higher rates

The process of underrating a disability income insurance policy includes analyzing the risks associated with certain activities, hobbies, and hazardous sports therefore, how does the California insurance code defined and classify an act of an applicant who doesn't mention, when applying for this type of insurance, his recent interest and participation in bungee jumping

This is defined and classified as material information and is considered concealment

how do insurance regulators view a statement made by an agentTo a prospective insured that the dividends of an insurance contract are guaranteed each year

This would be considered a misrepresentation

A represtation as to the past, present, or future is a/an?

Verified promise

When does the license of a fire and casualty broker-agent become inactive

When the broker agent has no appointment insurance company, but licensing renewal fees have been paid and CE requirements have been met

When does the authority to transact insurance, that is granted to a licensee from an insurance company, become effective

When the insurance company representative signs the notice of appointment

All firing Kelly to broker-agents must not only be licensed with the Department of Insurance but they must also be appointed with the insurance companies they will be representing. When does this authority to transact business, resulting from the insurer appointment become effective

When the notice of appointment is signed by the insurer

What is the one main factors that the insurance commissioner uses while determining whether a rate excessive or unfairly discriminatory

Whether the rate mathematically reflects the insurance companies investment income

In the state of California, no great will remain in effect if it is considered to be any of the following except

impartial

Which of the following insurance professionals would be employed to add an insurance broker

insurance solicitor