Chapter 3 Quiz

Agents must keep good records and make them available to the DOI for a period of: A - 5 years B - 2 years C - 1 year D - 3 years

A - 5 years

Commissioner may give an order that records be brought current within: A - 60 days of the order B - 15 days of the order C - 90 days of the order D - 30 days of the order

A - 60 days of the order

Informational records must be kept a minimum of: A - 5 years B - 18 months C - 12 months D - indefinitely

B - 18 months

All of the following are examples of fiduciaries EXCEPT: A - Corporate directors B - Administrators C - Vendor D - Executors

C - Vendor

An organization ceases to exist as an entity eligible to hold a license upon all of the following EXCEPT: A - upon dissolution of a co partnership or upon any change in membership of a co-partnership. B - upon dissolution of a corporation. C - upon the termination of a key employee. D - upon the termination of an association.

C - upon the termination of a key employee.

Which of the following is not a person under the Code? A - An estate of a deceased B - An entity C - An individual D - A family

D - A family

Which of the following is NOT a valid reason for the Commissioner to deny the use of a name when filing with the Insurance Commissioner? A - The name is politically connected to the government. B - The name would interfere or is too similar to the name of another agency already licensed by the Commission. C - The name would lead the public in the wrong direction. D - The name gives the impression the licensee is authorized to conduct a type of business it cannot legally conduct.

A - The name is politically connected to the government.

According to the qualifications of an insurer under the California Code a person can be any of the following EXCEPT: A - a human being at least age 16 who is competent and not intoxicated B - a corporation C - a trust D - an estate of a deceased person

A - a human being at least age 16 who is competent and not intoxicated

Insolvency means: A - an insurer`s inability to meet its financial obligations when they are due B - a company has more claims than earned premium to pay for those claims C - a company has more earned premium than claims made D - an insurer`s inability to meet the standards set by the DOI

A - an insurer`s inability to meet its financial obligations when they are due

Appointments are terminated: A - any of these B - termination of license C - by either agent or insurer D - license fees paid late

A - any of these

Commissioner can suspend a permanent license without a hearing, except: A -client co-signing a loan B -none are exceptions C - conviction of any felony D - license revoked last 5 yrs

A - client co-signing a loan

In lieu of denying an application for a license the Commissioner can: A - issue a restricted license B - either of these C - charge extra fees D - neither of these

A - issue a restricted license

Transacting via internet with a California resident would not require: A - license expiration B - name on license C - license number D - state licensee is domicile

A - license expiration

All Property and Casualty Broker/Agents are required by law to display to the public: A - Their license to sell insurance displayed in their training room. B - Their license to sell insurance, displayed in a place where it can be easily seen. C - The institution of education where they received their degree. D - The types of insurance they are licensed to sell displayed in their personal office.

B - Their license to sell insurance, displayed in a place where it can be easily seen.

A Property and Casualty Agent is required to continue their education by completing: A - a total of 55 hours during the first 2 years of licensing. B - a total of 24 hours per license term. C - a total of 100 hours during the first 4 years of licensing. D - a total of 25 hours during the first 2 years of licensing.

B - a total of 24 hours per license term.

It is against the law for an insurance licensee to offer free insurance to: A - family and other relatives. B - anyone as an incentive to acquire some other type of business. C -anyone, regardless the reason. D - those who cannot afford it.

B - anyone as an incentive to acquire some other type of business.

In order to update, add or change a statute a bill must be passed by the legislature and then presented to the governor. If the statute is passed, it will go into effect: A - on the next fiscal year B - on the next January 1st C - immediately D - on the next August 1st

B - on the next January 1st

A licensee may surrender his/her license: A - after notifying the Commissioner and a mandatory 30 day waiting period. B - upon written notice to the Department of Insurance at any time. C - after the termination of employment with an insurer. D - after written notice to the Department and the Commissioner after the next January 1.

B - upon written notice to the Department of Insurance at any time.

If someone has a Life Agent Combo and a Property/Casualty license for 10 years, then how many CE hours would be required in the current license term? A - 30 hours B - 25 hours C - 24 hours D - 50 hours

C - 24 hours

To handle long term care insurance, an agent of more then four years must satisfy the continuing education requirement of: A - an 8 hour course in each of the first 4 years of licensing. B - a 4 hour course in each of the first 2 years of licensing. C - 8 hours of LTC training each license term. D - a 4 hour course in each of the first 4 years of licensing.

C - 8 hours of LTC training each license term.

What is the difference between an admitted and a non-admitted insurer? A - A non-admitted insurer is a company that has met all of the qualifications designed by the DOI and has received a Certificate of Authority from the DOI to transact insurance in California, whereas an admitted insurer has not complied or been denied. B - An admitted insurer has met all the qualifications designed by the DOI but hasn`t received a Certificate of Authority because they are not licensed in the state of California and a non-admitted insurer is licensed in the state of California. C - An admitted insurer is a company that has met all of the qualifications designed by the DOI and has received a Certificate of Authority from the DOI to transact insurance in California, whereas a non-admitted insurer has not complied or been denied. D - An admitted insurer is a company that has met most of the qualifications designed by the DOI and has received a Certificate of Authority from the DOI to transact insurance in California, whereas a non-admitted insurer has not applied or been denied.

C - An admitted insurer is a company that has met all of the qualifications designed by the DOI and has received a Certificate of Authority from the DOI to transact insurance in California, whereas a non-admitted insurer has not complied or been denied.

Records must be made available to the Commissioner: A - within 30 days B - upon written request C - at all times D - within 5 days

C - at all times

When should a licensee notify the Commissioner of a change in address? A - within the 30 day grace period B - within the 10 day grace period C - immediately D - after notifying the company the licensee is employed with

C - immediately

After providing an opportunity for a hearing, the Commissioner may deny an application for a license based on the following reasons EXCEPT: A - the applicant was convicted of a felony B - the applicant has acted as a licensed person before the license was issued C - the applicant is disabled D - the applicant lied on the application

C - the applicant is disabled

An agent or broker may charge an extra fee for services above and beyond what are considered normal duties. Which of the following is NOT considered an extra service? A - Services performed as a convenience to the insured that result in extra expense to the broker or agent B - Additional research C -Additional activities D - Application paperwork

D - Application paperwork

Every licensee shall prominently put their license number on all of the following except: A -Neighborhood advertising flyer B - Business cards C - Price quote D - Phone book listing in the white pages

D - Phone book listing in the white pages

Which of the following is NOT true about the California Insurance Code and the California Code of Regulations. A - The CIC is written, updated, and changed by the California State legislature. B - The Department of Insurance implements, enforces and monitors the CIC. C - The CIC gives the Commissioner the power to institute rules and regulations which are called the CCR. D - The CIC and the CCR are a complete guide to ethical behavior.

D - The CIC and the CCR are a complete guide to ethical behavior.

For an agent or solicitor to be valid to transact requires: A - a proper license B - neither are required C - an appointment D - both are required

D - both are required

When can a partnership continue if a new partner joins? A - After the department is notified within 30 days and the changes are approved. B - After the Commissioner is notified and a new license is issued. C - After the new partner is issued a license by the department and the old license is terminated. D - After all the partners file a written notice with the Commissioner within 45 days.

A - After the department is notified within 30 days and the changes are approved.

A subsidiary formed to insure the parent company is called a(n): A - Co-op insurer B - Captive insurer C - Inter-insurance exchange D - Fraternal

B - Captive insurer

________ refers to the inability of the insurer to meet its financial obligations when they are due. A - Actuarial B - Insolvency C - Non-Admitted D - Paid in capital

B - Insolvency

Every applicant for a license to act as an agent must have filed with the Commissioner: A - a license number to be approved prior to receiving a license. B - a notice of appointment to do business in the state. C - a request for application prior to being licensed in the state. D - an application for employment with the company employed with.

B - a notice of appointment to do business in the state.

The marketing/sales department is responsible for: A -receiving applications for insurance and then deciding if the company should approve or reject the application. B - using claims history, statistics, and computer data to predict losses. C - advertising, promoting and distributing an insurer`s products to the public. D - receiving claim requests, evaluating them, and paying those claims that are covered by the terms of the contract and rejecting those that are not.

C - advertising, promoting and distributing an insurer`s products to the public.

If a license is in the possession of the insurer or the licensee`s employer, the licensee may surrender his/her license: A - after the termination of employment with an insurer. B - after notifying the Commissioner and a mandatory 30 days waiting period. C - after written notice is delivered to the Commissioner. D - at any time.

C - after written notice is delivered to the Commissioner.

The actuarial department is responsible for: A - receiving applications for insurance and then deciding if the company should approve or reject the application. B - advertising, promoting and distributing an insurer`s products to the public. C - receiving claim requests, evaluating them and paying those claims that are covered by the terms of the contract and rejecting those that is not. D - using claims history, statistics and computer data to predict losses.

D - using claims history, statistics and computer data to predict losses.