Chapter 15 Exam

Does the Texas Medical Liability Insurance Underwriting Association provide which of the following? A. General liability insurance for healthcare providers who are unable to obtain coverage through the voluntary market B. Medical insurance for physician's and their staff C. Excess medical coverage for employees covered under Workers' Compensation D. Medical expense coverage for drivers covered under the assigned risk pool

A. General liability insurance for healthcare providers who are unable to obtain coverage through the voluntary market

Any licensee who intends to write flood insurance in Texas may receive up to 3 credit hours toward continuing education requirements by completing an approved flood insurance course within how many months before a license issue date? A. 12 B. 3 C. 24 D. 6

A. 12

The minimum financial responsibility liability limit in Texas is _____. A. 30/60/25 B. 25/50/15 C. 15/30/10 D. 10/20/5

A. 30/60/25

Which of the following persons may renew their insurance license in Texas? A. An individual whose license expired 30 days ago B. An individual whose license expired 6 months ago C. An individual whose license was revoked D. An individual whose license expired 2 years ago

A. An individual whose license expired 30 days ago

A managing general agent (MGA) is: A. Any person or entity responsible for supervising the local agency and field operations of an insurance company B. A person who, for compensation, examines, assesses, or evaluates risks for, and provides advice for reduction of risks C. A person who causes an insurance contract to be issued with an eligible surplus lines insurer D. A salaried employee who only performs assigned duties in a property and casualty agent's office

A. Any person or entity responsible for supervising the local agency and field operations of an insurance company

Under the Texas Windstorm Insurance Association, an area where windstorm and hail insurance is not reasonably available because of severe damage from storms is considered a(n): A. Catastrophic area B. Uninsurable area C. Disaster area D. Emergency zone

A. Catastrophic area

The purpose of the Texas FAIR Plan Association is to: A. Insure property owners who are unable to obtain insurance coverage in the regular market B. Review premium rates to investigate allegations of discrimination C. Mediate claim disagreements between insurers and policyholders D. Handle insurance complaints by policyholders

A. Insure property owners who are unable to obtain insurance coverage in the regular market

What prohibited trade practice does an agent commit when they exaggerate the benefits of a policy in order to convince a policyholder to cancel an existing policy to buy a new policy? A. Misrepresentation B. Defamation C. Rebating D. False advertising

A. Misrepresentation

When based on sound actuarial principles, insurance rate classifications in Texas may be determined by all of the following characteristics, except: A. National origin B. Age C. Geographic location D. Marital status

A. National Origin

The following are examples of boycott, coercion, or intimidation, except: A. Offering a premium discount or credit that is not specified in the policy B. Requiring a mortgager to pay a handling charge on a policy required to secure a loan C. Unreasonably disapproving a policy that provides requisite coverage D. Coercing a debtor into getting requisite insurance through a particular agent

A. Offering a premium discount or credit that is not specified in the policy

Which of the following statements is correct regarding PIP coverage? A. PIP coverage covers insureds and their guests without regard to fault or to coordination of benefits B. An insurer may not exclude benefits to any insured who intentionally injured themselves C. PIP coverage is not optional for the insured D. PIP coverage is included at the option of the insurer

A. PIP coverage covers insureds and their guests without regard to fault or to coordination of benefits

Which of the following is NOT a fiduciary duty of an agent? A. Recommend the most profitable coverage for the agent B. Serve the best interests of the insurer C. Keep premium funds in a trust account separate from other funds D. Forward premiums collected from the insured to the insurer on a timely basis

A. Recommend the most profitable coverage for the agent

Which of the following is not a prohibited claims settlement practice? A. Requiring a claimant's income tax return while investigating a fire B. Refusing to pay a claim without reasonably investigating it C. Requiring an insured to release the insurer from a claim in order to receive a partial payment D. Misrepresenting a material fact to a claimant

A. Requiring a claimant's income tax return while investigating a fire

Which of the following does not qualify as evidence of financial responsibility for a vehicle in Texas? A. Savings account statement B. Auto insurance card C. Deposit of $55,000 filed with the county judge D. Certificate of surety bond

A. Savings account statement

Which license permits an agent to place business with a nonadmitted insurer in Texas? A. Surplus Lines B. Adjuster C. Insurance Service Representative D. Managing General Agent

A. Surplus Lines

An employee is injured, and the doctor approves disability for one to two weeks. If the disability continues for 2 or more weeks, from what date would the Workers' Compensation benefits be computed? A. The date the disability begins B. The date of injury C. The beginning of the 2nd week D. The date the employer was notified

A. The date the disability begins

False advertising, misrepresentation, and defamation are all examples of which of the following? A. Unfair Methods of Competition B. Unfair Claims Practices C. Unfair Marketing Practices D. Unfair Claims Methods

A. Unfair Methods of Competition

The Texas Property and Casualty Guaranty Fund will cover an unearned premium claim up to what amount? A. $10,000 B. $25,000 C. $300,000 D. No limit

B. $25,000

General Property and Casualty agents in TX must complete ______ CE hours every 2 years. A. 20 B. 24 C. 12 D. 10

B. 24

Who is not eligible for an agent license in this state? A. A 30-year-old who submitted the appropriate application and fees 1 week ago B. A 17-year-old who passed the licensing exam 6 months ago C. A 25-year-old who passed the licensing exam 2 months ago D. A 43-year-old who submitted the appropriate application and fees 1 month ago

B. A 17-year-old who passed the licensing exam 6 months ago

An individual may be denied a license by the Department for all of the following reasons, except if the individual has: A. Been convicted of a felony B. Actively engaged in soliciting and writing insurance for the general public C. Offered a premium rebate to an insured D. Obtained a license by fraud or misrepresentation

B. Actively engaged in soliciting and writing insurance for the general public

The Department may issue a temporary agent license to a/an: A. Agent moving from another state to Texas B. Applicant who is sponsored for an appointment by an insurance company C. License applicant who has failed the exam 3 times D. Nonresident agent

B. Applicant who is sponsored for an appointment by an insurance company

The Commissioner may discipline a licensed insurance agent for all the following behavior, EXCEPT: A. Deliberately violating a Texas insurance law B. Being fined for overdue parking tickets C. Stealing a client's insurance premium D. Being convicted of a felony

B. Being fined for overdue parking tickets

An automobile liability policy in Texas must provide which of the following coverages? A. Uninsured and underinsured motorist B. Bodily injury, death, and property damage C. Bodily injury, death, and PIP D. Medical payments

B. Bodily injury, death, and property damage

Which if the following types of property is not covered under inland marine insurance in Texas? A. Physician's equipment B. Business personal property C. Firearms D. Personal jewelry and fur

B. Business personal property

All of the following must be filed with the Commissioner of Insurance in Texas, except: A. Policy forms B. Commission schedules C. Endorsements D. Rate schedules

B. Commission schedules

Which of the following employees would be exempt from coverage under Workers' Compensation laws in Texas? A. Librarian B. Domestic worker C. Retail worker D. Flight attendant

B. Domestic worker

Do the Texas Property and Casualty Insurance Guaranty Association pay covered claims against which of the following? A. Unauthorized insurance companies B. Insolvent insurers C. Workers' Compensation carriers that have denied coverage D. Labor associations that have denied coverage

B. Insolvent insurers

The Texas Commissioner has the authority to examine the books, records, and correspondence of all the following, except: A. Risk managers B. Medical examiners C. Property and casualty agents D. Insurance consultants

B. Medical examiners

A licensed agent is required do which of the following before transacting insurance in Texas? A. Obtain a Certificate of Authority B. Obtain an appointment from an insurer C. Obtain an insurance counselor's license D. Pass an appointing exam

B. Obtain an appointment from an insurer

Which agent is required to maintain a bond in order to transact business in Texas? A. Fair Plan agent B. Surplus lines agent C. Inland marine agent D. Auto insurance agent

B. Surplus lines agent

When is an employee entitled to temporary income benefits in Texas? A. After death B. When disabled C. Before an injury D. When not disabled

B. When disabled

When is an employee entitled to temporary income benefits in Texas? A. When not disabled B. When disabled C. After death D. Before an injury

B. When disabled

The standard PIP coverage limit is: A. $2,000 per person for losses arising within 2 years after the accident B. $2,500 per person for losses arising within 2 years after the accident C. $2,500 per person for losses arising within 3 years after the accident D. $1,500 per person for losses arising within 3 years after the accident

C. $2,500 per person for losses arising within 3 years after the accident

What is the property deductible for UM/UIM coverage in Texas? A. No deductible applies to this coverage B. $750 C. $250 D. $500

C. $250

In Texas, an insurer is permitted to assess a renewal surcharge on a homeowners policy if the insured submits how many non weather-related claims within the past 3 policy years? A. 3 B. 5 C. 2 D. 4

C. 2

How many days does an employee have to waive their right to be covered by a Workers' Compensation policy issued in Texas? A. 15 B. They do not have the right to waive coverage C. 5 D. 30

C. 5

In Texas, policy forms and endorsements must be filed for approval how many days before they are issued? A. 10 B. 30 C. 60 D. 20

C. 60

In Texas, the death benefit amount is _____ % of the employee's average weekly wage. A. 90 B. 65 C. 75 D. 55

C. 75

The Department may issue a temporary agent's license, valid for ______ days. A. 120 B. 60 C. 90 D. 30

C. 90

Which of the following cannot be used to show proof of financial responsibility? A. A certificate of self-insurance B. A bond C. A bank account with an adequate balance D. A certificate of insurance

C. A bank account with an adequate balance

By the definition provided by Workers' Compensation laws, the term "employee" does not include: A. A trainee under the Texans' Work program B. A person whose employment is in the usual course and scope of the employer's business C. A master of, or seaman on, a vessel engaged in interstate or foreign commerce D. A person employed in construction, remodeling, or repair work for the employer on the premises of the employer

C. A master of, or seaman on, a vessel engaged in interstate or foreign commerce

The Texas Automobile Insurance Plan Association (TAIPA) provides insurance for which of the following reasons? A. Applicant's driver's license was suspended B. Applicant had no prior insurance C. Applicant was rejected by two insurers D. Applicant has a poor claims history

C. Applicant was rejected by two insurers

An injury for which Workers' Compensation is payable is called a(n) __________ injury. A. Employment B. Trauma C. Compensable D. Occupational

C. Compensable

Which of the following is not included in the definition of transacting insurance? A. Delivering an insurance contract B. Collecting an insurance payment C. Completing continuing education requirements D. Providing an insurance proposal

C. Completing continuing education requirements

Which of the following statements about continuing education in Texas is true? A. Every licensee must complete 4 CE hours on the topic of flood insurance B. At least 90% of CE hours must be completed online C. Every licensee must complete 3 CE hours on the topic of ethics D. At least 50% of CE hours must be completed via webinar

C. Every licensee must complete 3 CE hours on the topic of ethics

A temporary agent license may be issued in Texas: A. To a licensing candidate who is unable to pass the licensing exam B. To a nonresident looking to solicit insurance in this state C. If the agent is sponsored for an appointment by an insurer D. To a surviving spouse of a deceased agent

C. If the agent is sponsored for an appointment by an insurer

The Commissioner can take all the following actions if insurance laws are violated, except: A. Order the licensee to pay an administrative penalty and/or make restitution B. Issue a cease and desist order C. Imprison any violator D. Suspend, revoke, or deny a license

C. Imprison any violator

Which of the following is not a duty of the Commissioner? A. Issue an insurance license for a producer B. Enforce state insurance laws C. Make state insurance laws D. Handle insurance-related consumer complaints

C. Make state insurance laws

Which of the following is not a duty the Commissioner must administer? A. Enforce state insurance laws B. Approve an insurance license for a producer C. Make state insurance laws D. Develop and implement regulatory policy

C. Make state insurance laws

In Texas, a risk manager is someone who: A. Works in an insurer's field office as a supervisor of newly hired agents to make sure they are acting in a compliant manner B. Only sells insurance in a controlled situation C. Provides services in exchange for a fee and also gives advice for the reduction of risks to the subjects of insurance under property and casualty insurance policies D. Examines, assesses, or evaluates risks for licensed producers

C. Provides services in exchange for a fee and also gives advice for the reduction of risks to the subjects of insurance under property and casualty insurance policies

In Texas, when the Commissioner cancels or revokes the authorization of an insurer, they may also do all of the following except: A. Issue a cease and desist order B. Order the licensee to pay restitution C. Suspend the Certificate of Authority for up to 5 years D. Refer the matter to the attorney general for enforcement of any unpaid penalty

C. Suspend the Certificate of Authority for up to 5 years

Excessive insurance premiums are determined by the A. Texas Workforce B. Texas Guaranty Association C. Texas Department of Insurance D. Attorney General

C. Texas Department of Insurance

After the 60-day underwriting period, an insurer cannot cancel a personal auto policy in Texas for which of the following reasons? A. The spouse's driver's license was suspended B. The insured submitted a fraudulent claim C. The insured submitted 3 claims in the past 5 years D. Nonpayment of the policy premium

C. The insured submitted 3 claims in the past 5 years

A Texas insurance company may cancel a personal auto policy for nonpayment of premium after giving advance notice of how many days? A. 15 B. 5 C. 20 D. 10

D. 10

An agent's license expires how many years after the date the license was issued in Texas? A. 3 B. 1 C. 4 D. 2

D. 2

An affected insurer may file an appeal with the Commissioner for up to how many days after the FAIR Plan upholds an adverse decision? A. 20 B. 60 C. 40 D. 30

D. 30

If a person discovers that a fraudulent insurance act has been committed in Texas, that person must file a written report with the Department's insurance fraud unit within how many days? A. 15 B. 60 C. 90 D. 30

D. 30

In Texas, an insurer must notify the insured in writing of a final settlement no later than how many days after the date a claim is settled? A. 20 B. 90 C. 60 D. 30

D. 30

The Department must examine each insurance company at least once every _____ years. A. 3 B. 4 C. 7 D. 5

D. 5

In Texas, the death benefit amount is _____ % of the employee's average weekly wage. A. 65 B. 55 C. 90 D. 75

D. 75

Which one of the following best describes an adjuster in Texas? A. A person who invests the insurance company's funds to make sure they have adequate reserves in order to pay claims when and if they come due B. An insurance company's employee who helps in establishing rates on various risks C. An insurance company's field representative who seeks to recruit new agents to sell their policies D. A person who investigates or adjusts losses on behalf of an insurance company

D. A person who investigates or adjusts losses on behalf of an insurance company

All of the following are motor vehicles under TX law, except: A. A camping trailer towed by a car B. A car towing a boat C. A pickup truck D. A train

D. A train

To be eligible for supplement income benefits in Texas, a recipient must: A. Have returned to work earning less than 95% of their average weekly wage B. Have at least a 5% impairment rating from the compensable injury C. Elect to receive a portion of the impairment income in a lump sum D. Actively seek employment

D. Actively seek employment

Texas Lloyds companies are considered: A. Nonadmitted insurers B. Unauthorized insurers C. Ineligible insurers D. Admitted insurers

D. Admitted insurers

All of the following are examples of rebating in Texas, except: A. An insurer issuing company stock in exchange for a policy purchase B. An insurer providing a special customer a more favorable dividend scale or benefit as an incentive to purchase a very large premium policy C. An agent sharing commission on a sale with a customer who found themselves short of cash D. An agent giving a long-time client $500, representing a 10% premium rebate as permitted by the carrier and stated in the policy

D. An agent giving a long-time client $500, representing a 10% premium rebate as permitted by the carrier and stated in the policy

Which of the following facts is TRUE about UM/UIM coverage in Texas? A. Mandatory UM/UIM coverage is $100,000 B. UM/UIM coverage is mandatory C. Hit-and-run accidents are NOT covered D. An insured may decline UM/UIM coverage

D. An insured may decline UM/UIM coverage

For which employee is an employer not liable for Texas Workers' Compensation benefits? A. An employee who accidentally injured themselves B. An employee taking prescription drugs C. A careless employee D. An intoxicated employee

D. An intoxicated employee

An automatic fine of $50 per credit hour applies if a licensee fails to comply with what CE requirement? A. Obtain a life and health license during the first licensing period B. Issue a course completion certificate within 60 days of completing a course C. Prepare 30 course completion certificates during a licensing period D. Complete the required number of CE hours during a licensing period

D. Complete the required number of CE hours during a licensing period