Chapter 15

The North Carolina Rate Bureau assesses and recommends rates for property and casualty insurance against loss to residential contents and real property with not more than ___ housing units, theft and physical damage loss to nonfleet private passenger motor vehicles, and Workers' Compensation and employers' liability insurance. A.4 B.8 C.10 D.6

A

Which of the following is NOT a duty required of the Commissioner of Insurance? A.Conducting examinations and investigations B.Establish laws, rules, and regulations regarding North Carolina insurance C.Approve or disapprove insurance rates, forms, and safe driver incentive plans D.Compiling a list of rates charged by insurers for residential property

B

A temporary license may be issued to an individual for up to how long? A.90 days B.365 days C.180 days D.30 days

C

Which of the following is NOT an eligible employee under the Workers' Compensation policy? A.Member of the North Carolina National Guard B.Casual employment C.Employed as an apprentice D.Sole proprietor

C

Which of the following statements is NOT true regarding the Consumer Division? A Commingling is prohibited B An agent may not buy salvage from a claimant C A receipt for an insurance premium must be dated and signed by the agent D An agent charging a service fee must display that fee in their office

C

A temporary license may be issued to an individual for up to how long? A.365 days B.30 days C.90 days D.180 days

D.180 days

A violation of the Privacy Protection Act is punishable by all of the following, except: A License suspension B $100,000 fine C Up to $10,000 per violation D License revocation

b

Every person holding a property, casualty, personal lines, or adjuster insurance license must obtain _____ hours of continuing education credit as specified in the insurance code. A.30 B.21 C.24 D.18

C

An insurer must provide claim forms to a claimant within _____ days of receiving notice of loss. A.20 B.30 C.45 D.15

D.15

No privacy information notice needs to be provided to the insured if one was provided within the previous ______ months. A.6 B.12 C.24 D.36

c

An employee who was injured on the job, but returns to the workforce at a lower rate of pay is covered under which of the following disabilities? A Permanent Partial Disability B Permanent Total Disability C Temporary Partial Disability D Temporary Total Disability

C

Choose the reason for policy cancellation after the first 60 days of the policy term that is NOT acceptable under North Carolina policy cancellation statutes: A.The insured has submitted an excessive number of claims in the past 3 years B.Insured fails to implement loss control measures that materially affect the risk insurability C.Insured breaches the policy conditions regarding notification of claims D.Insured omits important information when submitting a claim

A

The Commissioner of Insurance may suspend, place on probation, revoke, or refuse to renew a license for all of the following reasons, except: A Forging another's name on an insurance document B Committing dishonest or fraudulent practices in the insurance business C Knowingly accepting business from an appropriately licensed broker D Cheating on an insurance exam

c

Which of the following statements is NOT true about the requirements of a Workers' Compensation policy? A Compensation for injury to an employee will not be paid if a proximate cause is intoxication B An employee must report an injury to the employer within 30 days of the injury C A Workers' Compensation claim must be filed within 2 years D Illegally employed minors who are injured are not covered under the Workers' Compensation policy

d

Which of the following statements is NOT true regarding the Consumer Division? A Commingling is prohibited B An agent may not buy salvage from a claimant C An agent charging a service fee must display that fee in their office D A receipt for an insurance premium must be dated and signed by the agent

d

Which one of the following actions would be considered a misdemeanor? A.For an agent or broker to knowingly use honest representations to transact insurance business B.To willfully make a true statement on an insurance application C.For an agent to sign a blank contract D.To make a true statement to get a commission or benefit from an insurer

C

Offering a premium discount not specifically included in the policy is called: A.Twisting B.False information C.Misrepresentation D.Rebating

D

The North Carolina Motor Vehicle Reinsurance Facility provides automobile insurance to each of the following, except: A.A farmer who wants to insure farm equipment B.A person who is unable to obtain insurance in the regular market C.A person whose vehicle has been principally garaged in North Carolina for at least 6 months D.military personnel stationed in North Carolina who intend to return to their home state

a

An insurance professional who represents the insured is which of the following? A Broker B Insurance Producer C Agent D Limited Representative

A

Every person holding a property, casualty, personal lines, or adjuster insurance license must obtain the required number of continuing education credit hours every _____ years. A.2 B.3 C.5 D.4

A

A person who willingly and knowingly made submitted several fraudulent claims over the past several years is subject to which of the following penalties? A.3 year jail term B.Double damages C.Damages excluding court costs D.Treble damages

D

All of the following are unfair claims settlement practices, except: A.Not attempting in good faith to promptly, fairly, and equitably settle a claim in which liability has become reasonably clear B.Compelling insureds to sue to recover amounts due by offering substantially less than the amounts typically recovered in actions brought by legal process C.Making known to insureds or claimants a policy of appealing arbitration awards D.Promptly explaining, based on applicable provisions or laws, a claim's denial

D

Which one of the following regarding the North Carolina Insurance Guaranty Association is false? A The Association will not pay any amount exceeding the insolvent insurer's obligation B The Association is a for profit corporate entity C In general, the Association is obligated to pay covered claims, those existing before, and arising within 30 days after, an insurer's insolvency of more than $50 and less than $300,000 D Any person or insurer that writes any kind of insurance applicable to the Association must be a member of the Association and remain a member as a condition of its authority to transact insurance in this State

b

Choose the INCORRECT statement regarding SDIP plan surcharges. A. SDIP points must be equal to the severity of the claimant's injury B. A subclassification plan surcharge must be applied to a policy for 3 policy years C. A major accident is an at-fault accident resulting in BI, death, or PD of at least $3,000 D. A person with less than 3 years driving experience may not be surcharged

D

Choose the passive unfair claim settlement practice. A.Misrepresenting pertinent facts or insurance policy provisions relating to the coverage B.Refusing to pay claims without conducting an investigation C.Telling an insured the policy of appealing arbitration awards D.Failing to promptly explain, based on applicable provisions or laws, a claim's denial

D

Choose the true statement regarding general business regulations for property insurance. A A policy covering fire damage will cover a loss for actual cash value if ACV has been added to the policy by an endorsement B Policy credits are not available for policy forms providing functional replacement cost coverage C A premium overpaid for a sum in excess of a building's actual cash value must be reimbursed at 6% annual interest from the date of issue D A property policy may not be insured for a term exceeding 8 years

c

All of the following are primary duties of the Commissioner of Insurance of North Carolina, except: A.Issuing, refusing, suspending, or revoking Certificates of Authority to insurers and licenses to insurance agents B.Conducting examinations, investigations, and hearings as necessary to administer state insurance laws C.Creating insurance laws to protect the public D.Administering oaths

C

The Safe Driver Incentive Plan distinguishes safe drivers from drivers with driving records containing each of the following, except: A Minor moving traffic violations B At fault accidents C Excessive collision claims D Major moving traffic violations

C

What are the minimum policy limits that the Facility will cover a risk ceded by a member insurer? A 15/30/5 B 25/50/10 C 50/100/25 D 30/60/25

D

A license applicant must notify the Commissioner in writing within _____ days of a change in residential or email address or of being convicted of a crime other than an auto misdemeanor. A.20 B.10 C.30 D.15

B

All of the following are unfair claims settlement practices, except: A.Not attempting in good faith to promptly, fairly, and equitably settle a claim in which liability has become reasonably clear B.Promptly explaining, based on applicable provisions or laws, a claim's denial C.Compelling insureds to sue to recover amounts due by offering substantially less than the amounts typically recovered in actions brought by legal process D.Making known to insureds or claimants a policy of appealing arbitration awards

B

An insurer must give the insured at least ________ advance written notice whenever the insurer changes the premium rate. A 30 days B 15 days C 72 hours D 7 days

B

Choose the reason for policy cancellation after the first 60 days of the policy term that is NOT acceptable under North Carolina policy cancellation statutes: A.The insured has submitted an excessive number of claims in the past 3 years B.Insured fails to implement loss control measures that materially affect the risk insurability C.Insured breaches the policy conditions regarding notification of claims D.Insured omits important information when submitting a claim

B

The Insurance Guaranty Association provides coverage under which of the following circumstances? A Insurance company guarantees renewal of property and casualty policies B Insurance company is insolvent C Applicant for insurance is ineligible due to claim history D Applicant has been rejected by at least 2 property insurers

B

The Post-Assessment Insurance Guaranty Association provides a mechanism to do all of the following for the payment of covered claims under certain insurance policies, except: A Avoid excessive delay in payment B Assess the cost of such protection among insureds C Assist in the detection and prevention of insurer insolvencies D Avoid financial loss to claimants or policyholders because of the insolvency of an insurer

b