Insurance
Newly acquired vehicles are not automatically covered under which symbol? 357 or none
7. 7 is for specifically described autos only. no automatic coverage
To handle long term care insurance, an agent of more than 4 years must satisfy the continuing education requirement of:
8 hours of LTC training each license term.
Coverage C perils are broad form on all HO policies except: HO 8345 and or 6
8&5
Which symbol(s) covers the exposure of employer's non-ownership liability? 4,8,2&4,8&9
89. 8 hired & 9 non owned
The following are true in regards to the California Insurance Guarantee Association except The purpose of the association is that each member be provided with insolvency insurance The maximum claim covered would be 500k or the policy limit The association is directed by a 9 member board of governors who are elected by voters for a 2 year term
9 members are NOT elected, they are appointed by the CIC
What is the difference between an HO 3 and an HO 3 with an HO 15 endorsement
A HO3 has exclusions on personal property. With HO 15 endorsement all perils are covered dwelling an property
In an auto policy, coverage A, B, and C respectively represent:
A Liability B medical C uninsured (D Damage to insured auto E Duties after an accident or loss F General provisions)
Glass coverage form pays:
Actual Cash Value without limitation per plate or pane, unless stated as replacement cost on the policy.
Tenant improvements and betterment losses are valued at:
Actual cash value (Replacement cost available)
In regards to workers compensation volunteer workers are considered to be:
BOTH exempted workers and covered by endorsement
Which of the following elements of a contract is/are the binding force? Consideration Offer and Acceptance Legal Purpose Competent Parties
Consideration
When a right or privilege has been given up, a party cannot reassert that right or privilege. The process of preventing the party from reasserting that right or privilege is known as: Waiver Pro-rata Estoppel Indemnity
Estoppel
The underwriting process consists of all of the following basic steps except: Issue the rate Implement the decision Monitor the decision Gather necessary information
Issue the rate
Can all P&C licensees transact all classes, except life and disability
YES
Does broad form and special form BOTH require 80% insurance to value
Yes
Aiding, assisting, or advertising for a nonadmitted is:
a misdemeanor, unless you are a surplus lines broker
every applicant for a license to act as an agent must have filed with the Commissioner: an application for employment with the company employed with a notice of appointment to do business in the state a request for application prior to being licensed in the state a license number to be approved prior to receiving a license
a notice of appointment to do business in the state
Type of policy or policies that do not normally exclude catastrophic losses: personal auto marine policies both neither
both
Which licensee is not appointed solicitor broker agent all
broker
Which of the following would be considered a module? Conditions Exclusions Business Auto Declarations
business auto
Inventory more than 100 feet off premise is: Excluded Covered in a vehicle Covered for 10K none of these
excluded
A named peril policy in ocean marine insurance refers to perils on the sea and perils of the sea. These perils do not include: Barratry sinking explosion jettison
explosion
The state of being subject to a loss is considered:
exposure
The incorrect statement concerning transportation expense is: must be endorsed available for bus fare applies to Part D claims no deductible applies
must be endorsed. included as supplementary coverage
The specific classification which cannot exist include the following except religion sexual orientation ancestry nicotine use
nicotine (double negative question)
What is the limit for glass coverage under the glass coverage form/endorsement
no limitation. settled on an ACV basis
Drive other care endorsement on a business auto may be used to cover _____
non-business exposures
Marine policies that are not regulated are known as:
non-filed forms
The FCIC is an agency that sells flood insurance policies: as a representative of the US Department of Safety through a select number of agents on an all risk basis none of the above
none of the above: The FCIC (fed crop insurance) and has nothing to do with flood insurance
All of the following are major differences between DPs and HOs except: occupancy requirements worldwide coverages theft coverage none are exceptions
none. each of these are different
Professional liability policies provide coverage for: Defense damages both neither
both
Who administers the CA Administrative Code of Regulations?
the commissioner
Glass Breakage under a Broad Form Causes of Loss is covered for up to:
$500 per occurrence. (without a glass endorsement)
What is A penalty for violating the Insurance Information and Privacy Protection Act?
$50k fine for violations committed with regularity showing they are a general business practice
Amounts paid for actual loss or injury are known as
Compensatory damages
_____ is not a disadvantage of using the earthquake endorsement
the deductible may be lower
Possible penalties for violation of a summary seizure CAN be any or all of these:
1 year imprisonment, misdemeanor, $1k
Which of the following symbols used on a business auto policy offers the broadest coverage 127. or 89 together
1. any auto the insured owns
Notifying the DOI is required if there are stock ownership changes of:
10% or more
Which of the following is not a penalty for unlawfully acting as an insurer without a certificate of authority? 50k 100k 11 month prison 13 month prison
13 months. 12 month max
If convicted of insurance fraud the penalty can be up to?
150k and up to 5 years in state prison
Informational records must be kept a minimum of:
18 months (5 years for bank records)
When a claim is settled on an ACV basis, B & M equipment must be repaired or replaced within how many months?
18 months. Equipment must be repaired or replaced within 18 months or the claim is settled on an Actual Cash Value basis
Within a BAP, which auto symbol applies to mobile equipment? 246 or 19
19
Mobile Equipment subject to financial responsibility would be symbol
19. Mobile equipment that is subject to registration and licensing
Which DP policies insure Coverage C for broad form perils? DP 1 2 &/or 3
2 3
The incorrect statement concerning qualification for the low cost program is: must be 19 can have 1 point licensed 2 years none are incorrect
2 years. Must be licensed 3 years
Under a PAP, if the deductible for collision if $500 and $250 for Other Than Collision, what would the insurer pay if he had a covered collision totaling 3k in which glass was also broken?
2.5k (3k-500)
Penalties for unfair Discrimination are?
2.5k for first violation, 5k for subsequent violations, 15-100k for frequent violations
How many days advance notice must be given to an insured for mid term-cancellation due to any reason other than nonpayment or non-renewal?
20
Upon receiving any written or oral inquiry from the Department of Insurance concerning a claim, every licensee shall immediately, but in no event more than___ calendar days of receipt of that inquiry, furnish the Department of Insurance with a complete written response based on the facts as then known by the licensee
21
If someone has a life agent combo and a property/casualry license for 10 years, then how many CE hours would be required in the current license term
24
An insurer must return any unearned premium to the agent or insured within _____ Days
25
Landlord furnishings covers up to _____ and excludes peril _______
2500 & peril of theft
In order to sell flood insurance the producer must be flood certified nothing complete 3 hour course have NFIP membership
3 hour course
How many days advance notice of cancellation due to non-renewal does an insurer need to give an insured?
30
Life insurance, annuities or disability insurance policies offered for sale to individuals age 65 or older or 60 for life and annuities, must provide a minimum free look period of how many days?
30
Once insured an insurer are in agreement payment must be made within
30 calendar days
Cancellation for property and casualty policies for other than nonpayment is:
30 days and 20 days for auto
The loss condition states the insurer must pay the claim within:
30 days. upon both parties being in agreement
How many days does an insured have to request collision coverage when a newly acquired auto replaces a covered auto that has liability coverage only?
4
Which of the following homeowners policies covers renters insurance? 4 2 8 1
4
All of the following are NOT eligible businesses under the BOP program except, an 8 story office building with less than 100k square feet a small liquor store a 4 story building with 60 units a small family-owned auto body shop
4 story 60 units
Insurer has up to how many days to accept or deny a claim?
40 days
The stipulations for nonrenewing of a personal lines policy include a notice of cancellation of the policy in writing to the insured at least_____ before the effective date of cancellation.
45
Agents must keep good records and make them available to the DOI for a period of:
5 years
Any person who transacts insurance without a valid license is guilty of a misdemeanor, punishable by a fine not exceeding____.
50k
What are the penalties for violating the Unfair Practices article?
5k for each violation. increasing up to 10k for willful violation
Commissioner may give the order that records be brought current within ____ days of the order:
60
What would be needed if a business owner had no personally owned vehicles, but wanted insurance on a rental car he personally rented on vacation?
A drive other car endorsement. needs coverage as individual not business
When an insured rejects uninsured motorist in writing this is considered: a waiver a rescission an example of estoppel a modification
A waiver. The insured gave up the right to pursue any uninsured motorist claim.
Supplementary payments apply to which of the following coverages? AB&or C
AB
Bob is thinking about obtaining insurance because he just found out he needs extensive surgery that will require several days in the hospital. This situation of waiting until the last minute to obtain insurance is known as: Spread of risk Adverse selection Cost Effective Insurance Ideally Insurable Risk
Adverse Selection
The tendency of people who are higher risk to purchase insurance, such as sick people who buy health insurance
Adverse selection
Which is not a violation of Unfair Practice? defamation of an insurer delaying an investigation age discrimination misrepresentation
Age discrimination
Which of the following is NOT a specified cause of loss? fire aircraft flood explosion
Aircraft
Key difference(s) between CGL and professional liability is/are: reporting periods consent to settle use of deductibles (sir) all are correct
All
Which are excluded under the BPP but covered under the EDP? Electrical surges Dropping the computer Change in temperature All
All
Management liability insurance would include which of the following? Employee benefits Director and officers employment practices all are included
All are included
Under farm liability, which coverage is optional? I J H or all are mandatory
All are mandatory liability coverages unlike CGL
BOP liability must include which of the following Medical expense BI & PD PI & AI all must be included
All must be included
There are no binders issued in: excess of 1 million life insurance in health insurance Any of the above
All of the above
Which of the following is an example of an adverse underwriting decision? Rejecting the risk Charging a higher rate Issuing with limitations All of these are examples
All of these are examples
What is the difference between HO 2 and 4?
An HO4 is a renters policy and an HO2 is a broad form homeowners policy.
Under the Commercial Crime insurance policy, "occurrence" is defined as:
An act or series of acts that may involve people.
The two types of transit coverage are:
Annual and Trip Transit coverage NOTE: This covers the interest of the shipper for the goods transported. Annual Transit coverage is for business owners who ship items on a regular basis, while the Trip Transit is for those who may only ship goods occasionally.
According to the Code the fastest growing area of fraudulent activities is: auto insurance fraud workers comp fraud health insurance fraud none of above
Auto
Coverages that follow the insured and family members into any auto: ABC&orD
B or C
Mayberry Construction has a Business Auto policy covering a 1995 pickup truck for liability and physical damage coverage. At the time of an accident, the driver of the pickup truck was pulling a trailer carrying a bulldozer. If the bulldozer slips off and causes bodily injury to another party, there is coverage under which of the following policies?
BAP , note: covers mobile equipment liability only if it is being towed or carried by a covered auto
An unendorsed claims made CGL includes:
BERP NOTE: BERP at no additional charge. BERP contains 2 coverages: mini tail or midi tail
The California state compensation insurance fund is considered to be direct writer competitive fund both neither
BOTH
Coverage A of the CGL policy covers:
Bodily Injury and Property Damage the insured is legally obligated to pay due to a covered loss. NOTE: Coverage A is for Bodily Injury and Property Damage Liability the insured is legally obligated to pay. Any injury to an employee would be covered under Workers Compensation.
What coverage form has the sole purpose of insuring most types of industrial risks for direct damage by an accident?
Boiler and Machinery coverage
Which of the following is NOT a known private insurer? Reciprocal Insurance Exchanges Bond Insurance Companies Mutual Insurance Companies Stock Insurance Companies
Bond Insurance Companies
A workers compensation insurance policy provides: state common law benefit statutory benefits both statutory benefits and employer liability are correct employers liability
Both
Trailer interchange coverage applies to which commercial auto form(s) Motor carrier form truckers form all of the forms both truckers and motor carrier
Both truckers and motor carriers
Physical damage coverage applies to all the symbols except 19 both or neither
Both, both symbols apply to liability only
Examples of tort law include all of the following EXCEPT: Bodily injury Breach of contract Personal injury Libel and slander
Breach of contract
A cause of loss form that doesn't list the covered losses is named all of the following except open peril special all risk broad form
Broad form. Special, open peril, and all risk are interchangable
Which form would you buy if you wanted to by a contingent business interruption form?
Business income from dependent properties form. Insured is likely to incur extra expenses because of loss or damage to dependent properties
Which of the following properties are NOT included in insured locaitons and residence premises under Section II of the Homeowners policy? Land on which a residence is being constructed Vacant land Insureds cemetery plot Insureds work office space
Business operations (office space)
Inside premises is frequently used crime form? ABCD
C
Medical expense coverage on a CGL is provided by which coverage? ABC or none
C ("C" the doctor)
Which of the following is NOT an action a person performs when transacting insurance? Calling an insurer for a price quote Solicitation of insurance Any transactions that later result from the operation of the contract The actual execution of a contract
Callin an insurer for a price quote
Which of the following is not a class of insurance? Casualty Fire Marine Auto
Casualty
The 2 types of Inland Marine policy forms are filed and non filed. All of the following are true about the advantages of a filed form, except: rates are cheaper than non filed forms are more standardized usually can be added to a package policy regulated by DOI
Cheaper: simplified but not necessarily cheaper
Which of the following are NOT actions of transacting insurance? solicitation of insurance remitting a premium payments to the insurer the actual execution of a contract negotiations preliminary to the execution of a contract
Colleting and remitting premium payments is not considered transacting insurance
A carrier of cargo is NOT liable for damage in all of the following situations, Except: A collision due to a mechanical malfunction inherent vice acts of god/nature negligence of the shipper
Collision due to a mechanical malfunction
If an insured is 25% at fault and the insurer settles proportionally, this is:
Comparative negligence
Which of the following is NOT a source of information an underwriter might use to investigate an application in order to approve or reject it? Medical information Bureau Financial Reports DMV Department of Industrial Relations
DIR?
Which of the residential policies are basic perils? DP12 HO82 and or all the DP policies
DP 1 & HO8
An applicant may be denied a license without the right to a hearing if any of the following conditions apply except applicant was convicted of a felony applicant was convicted of a DUI misdemeanor applicants previous insurance license was revoked within the past 5 years applicant was denied an insurance license last year
DUI misdemeanor
Insurance is a contract whereby one undertakes to indemnify another against: Exposure Physical hazard Damage Uncertainty
Damage
Which of the following is a coverage extension on the Commercial Building and Personal property coverage form? Improvements and Betterments Stock or inventory Debris Removal Indoor and outdoor fixtures
Debris removal. is extension with no extra premium charge
Which one of the following would not constitute transaction of insurance negotiation delivery of the policy solicitation execution of the contract
Delivery. Delivery is delivery not transacting
In which system is the agent considered an employee? A direct response system Exclusive agency system Direct writing system None of these
Direct writing system
Crime policy form that is similar to CGL claims made in activating coverage?
Discovery form
After the policy has expired, the one year to discover a loss is called the:
Discovery period
Coverage not provided without endorsement on a DP-1/Basic is: CDE
E must be endorsed on DP 1
The following coverages are provide under the Yacht policy except: P&I E&O Hull Medical Payment
E&O
Which of the following coverage is added by endorsement to the BOP policy? outdoor signs earthquake boiler and machinery money and securities
Earthquake, is endorsement others are considered optional
_____ insurance is a type of coverage that protects businesses from the financial consequences associated with a variety of employment-related lawsuits.
Employment Practices liability
In an insurance policy, any modifications made to the regular contract are known as:
Endorsements
Biler and Machinery is now known as:
Equipment breakdown
An insured who takes necessary precautions to reduce Workers Compensation claims or severity of losses, could receive a discount through:
Experience modification: allows an insured to reduce premium costs, due to a loss history that shows fewer claims or severity of claims.
When either fees are not paid current, or CE is incomplete, the license is:
Expired
TF Each surplus line broker shall file with the Commissioner a written report within 30 days of placing business with a non-admitted insurer
FALSE 60 days
TF One reason OSHA was established was to organize support of an occupational safety union
FALSE!!
TF According to a new development, AB 227 Chapter 635 regarding Workers Compensation and the California Insurance Guaranty Association, fines for filing fraudulent workers compensation claims were increased to a minimum of 5mil?
FALSE: claims were increased from 50k TO 150k
Which of the following is NOT an option of the California Residential Property Insurance Disclosure Statement? Extended Replacement Cost Coverage Actual Cash Value Fair Market Value Cost Coverage Guaranteed Replacement Coverage
Fair Market Value Cost
The following require that CE be completed before first application, except 3 hr flood 3 hr Fair plan 8 hr annuity 8 hr LTC
Fair, no CE requirement
TF a surety bond for $89k from a California licensed insurer is sufficient to show financial responsibility according to the Financial Responsibility Law
False
TF- For Uninsured motorist coverage the other driver does not have to be liable for the injuries or damage to property.
False. Other party must cause the damage or injury
Which of the following perils are NOT covered under the glass coverage form ornamentation chemical damage breakage fire damage
Fire damage. already covered under all 3 causes of loss forms on the CPP
The penalties for the insurer for unfair discrimination violation determined to be a general business practice is:
First and subsequent 2,500 5,000 General business practice 15-100k
Which is incorrect concerning the truckers form? Covers big rigs Transporting the property of others by a vehicle for free similar to the BAP must haul for hire
For a fee NOT FREE
Which of the following describes when one party intentionally gives the other party false information in order to benefit from the unlawful gain? Misrepresentation Fraud Theft Concealment
Fraud
Garage liability is broader than business auto liability because garage covers CGL only It covers CGL and auto Business auto is broader There is no difference
Garage liability combines CGL and business together
A parking garage would be BEST insured under which form(s)
Garagekeepers Direct Coverage (primary).
This coverage applies only when the insured is found legally liable for the damage to a customer's vehicle:
Garagekeepers legal liability
Which of the following statements is a responsibility of the insured in an insurance contract? To complete the application Tully explain the policy to the client Give true statements and information on the application Send the application to the underwriting department
Give true statements
A business auto is defined as all of the following ecept golf cart used for a business owned by the named insured trailer owned by the named insured private passenger auto truck
Golf cart
The Insured shall mean the following except: Leased employees Partnership Corporation Governmental agency employees
Governmental agency employees
Which of the following homeowners policies have both dwelling and personal property on a broad peril form? HO 2 4 5 HO 4 5 6 HO 2 5 8 HO 2 6
HO 2 6
The HO form that does not provide coverage for real property is HO468 and or All HO covers real property
HO 4 (tenant form)
Which HO form(s) provide open peril coverage for personal property? HO 5 Requires endorsement HO 3 & 5 HO 3
HO 5
Under HOP property coverage earth movement is a general exclusion, Which homeowners policy has done away with the exclusion for concurrent causation regarding this peril? HO 2346
HO3
Which of the following actions would not be considered transacting insurance? Collecting premium for a policy Giving a price quote over the phone Handing a prospect a business card and asking them for information Email a prospect an auto quote
Handing out a business card
Which of the following is NOT a reason a home would be insured under a Dwelling policy rather than a Homeowners policy
Homes that are one unit may be insured under the Dwelling program OR the Homeowners program
The following properties are included as an insured location and/or residence premises for Liability and Medical except: Insured relative cemetery plot Apartment Borrowed beach home Vacant land
Insured RELATIVE plot
In a boat owners policy, which of the following is NOT considered typical coverage? hull, physical damage, medical payments, liability
Hull (used for commercial vessel)
Claims-made and reported policies are unfavorable from the ________ standpoint.
Insureds
A beautician stating that this conditioner fixes badly damaged hair is a: implied warranty expressed warranty stated fact representation
Implied warranty
Which of the following means insolvency An insurer must also possess additional assets equivalent to such aggregate being able to provide for all its liabilities and for reinsurance of all outstanding risks not being able to meet the many financial, technical and legal qualifications that must actually be met by the code The inability of the insurer to met its financial obligations when they are due
Inability to meet obligations when they are due
A hazard is best defined as: Possibility of a loss Anything that increases the chance of loss or severity of loss due to a peril
Increases chance of loss
In which of the following marketing distribution systems does the agent represent more than one insurer and more than one company? Exclusive agency Independent agency Direct mailing system Direct writing system
Independent agency
According to a new legal development, AB984 Chapter 439, if an automobile service contract is considered an insurance policy:
It must be pre-approved by the insurance commissioner and the seller must be licenced
Which of the following is not associated with the word insurance? indemnify known event written contract transferring risk
Known event: insurance has to do with contingent or unknown events
The Commissioner shall establish a list of all surplus line insurers who have met the recognized requirements for such title and shall issue a master list at least semiannually. This list is known as ________
LESLI (List of Eligible Surplus Lines Insurers)
For an auto policy to be cancelled all of the following except one may take place within 30 days of cancellation? Fraud affecting the insured Late payment of at least 20 days increase in the hazard insured against drivers license has been suspended
Late payments. These don't matter only non-payments
The Standard Mortgage clause states that a ____ has the right to file a claim, make premium payments, and be notified of any cancellations or non-renewals.
Leinholder
Which of the following is not covered under a yacht policy? Liability Trailer P and I Hull
Liability
The degree of loss a person/organization faces from suits brought by a third party refers to: Human Personnel Loss exposure Loss exposure Liability Loss exposure Property exposure
Liability Loss Exposure
What does LRRA stand for
Liability Risk Retention Act
Policy revision that provides broader coverage, no premium or endorsement:
Liberalization
All of the following are general exclusions to the HO 3 policy except: Building Ordinance Flood Loss Assessment Earth movement
Loss assessment (coverage provides 1k in extended coverage due to a loss assessed to all members of an HOA)
______ describes an estimate of the amount an insurer will pay for a claim.
Loss reserve
In crime coverages the discovery period applies to which policy form?
Loss sustained form
Every company in California is required to report its financial condition to the Commissioner every year on or before:
March 1
Public law 15 exempted insurers from most federal regulation is known as ERISA regulations McCarran-Ferguson Act Kennedy Act Gramm-Bliley Act
McCarren-F Act
Which of the following is NOT a difference between a Personal Auto Policy and a Motorcycle endorsement? Driving experience Extra payments coverage Medical coverage Liability coverage
Medical
Under Section II - Additional Coverages, which of the following is NOT included? Medical Payments to Others Damage to the Property of Others Loss Assessment Coverage First Aid to Others
Medical Payments to Others (already included)
A private insurance that fills in the gaps of a government program would be: Medicare supplements 24 hr coverage fair plan CAARP
Medicare supplements
Workers compensation statutory benefits means:
Minimum and maximum benefits, waiting periods, etc. are established by state law and all Workers Compensation policies sold in this state must meet these requirements.
Which is not a liability endorsement on the HO forms Mobile home Personal injury Watercraft Business pursuits
Mobilehome (resident not liability?)
Why is mobility a common characteristic of many types of property insured under Inland Marine contracts?
Mobility covers MOVEABLE property even if not moved
A hazard that deals with a persons mental attiturde, behavior and habits is an example of: Physical Morale Moral Legal
Moral
The workers compensation policy was developed by:
NCCI: National Council on Compensation
Does CEA policy provide 10k in additional living expense?
NO
Does an Inland Marine policy include Electronic Data Processing and Contractors Equipment floaters on filed lines
NO
Is the insured pets that are injured on the insureds property covered under section II of Medical Payment to others?
NO
Is the insured responsible for obtaining a copy of the police report
NO but the insurer generally obtains it
Can anyone desiring flood insurance purchase it through the NFIP?
NO must be located in a flood zone
Is a temporary contract between the agent and the insured usually 30 days considered a binder?
NO this temporary contract is between the insurance company and the insured, not the agent. The agent (not broker) may be able to bind coverage over the phone with money and a faxed signature
Does an umbrella policy cover all perils and medical payments in an auto accident
NO. No policy covers all perils
Is a personal lines licensee allowed to transact standalone umbrella or excess liability insurance
NO. there is no such thing, they must be written with at least one underlying auto or residential policy
This law was the first to recognize that state regulation of the insurance industry was in the public's best interest.
Paul vs Virgina was the FIRST (McCarren-F act reversed the SEUA Case)
In computing the loss payment for contributory negligence the claim would:
Pay nothing if the injured party didn't meet the standard of self-protection in any form
Which one of the following is not a major exposure to a business owner of an auto related facility: auto liability completed operations professional liability product liability
Professional liability
The Truckers Coverage form is most similar to what other form of coverage?
Non-owner personal auto policy. (covers vehicles not owned by the insured)
Binders cannot be issued for which of the following? None of these Life insurance In excess of one million Disability Insurance
None of these
Concerning Seniors an acceptable insurance agency name would be: Easter seals agency aarp r us agency medical security agency over the hill agency
Over the hill agency. name can not imply it is related to a senior charitable or govt. organization
The primary types of professional liability insurance are all the following except P & I E & O Medical Malpractice D & O
P & I. primary: Errors and omissions, directors and officers, medical malpractice
Which of the following provides coverage for injured crewmembers? Also known as Jones Act coverage
P&I protection and indemnity
Statutory benefits are covered under what part of the WC insurance policy?
Part I
The modular concept refers to:
Parts of a package policy
All are true except which of the following concerning Part B of a PAP? Pays regardless of fault The insured is covered has a 3 year limitation Applies to pedestrians
Pedestrians
Which one of the following common insuring agreements would not be found within a Directors and Officers policy? Entity securities coverage A-side coverage pending litigation coverage corporate reimbursement coverage
Pending litigation coverage
HO 8 2 3 5. How are they different
Perils insured against
Coverage B of the CGL includes coverage for:
Personal and Advertising Injury NOTE: Personal and Advertising Injury is Coverage B of the Commercial General Liability policy.
BOP's provide coverage for property of others under:
Personal property. Business personal property covers property of others in a BOP
Which is excluded under Section I and covered under Section II Animals, birds, fish Hobby aircraft Firearms Ride on lawn mower
Pets
Medical books in a Doctors library at home would be best insured under:
Physician & Surgeons. (marine form)
Difference between DP 2 Broad form and DP 3 Special form is:
Plumbing damage (neighbors included)
3 parties to a surety bond
Principal, Obligee, Surety
All of the following are exclusions under the CGL policy Except: products and completed operations coverage professional liability coverage auto liability coverage liquor liability coverage
Products and completed operations coverage
Type of loss exposure pertaining to land and structures attatched to it
Property loss exposure
Ocean marine liability is known as
Protection & Indemnity is ocean marine liability.
An insurer may non-renew an auto policy for which of the following reasons? DL expired Vehicle registration suspended Nonpayment of premium within 25 days All of above
Registration suspended.
All of the following are methods of managing risk EXCEPT: Retention Rescission Transfer Avoidance
Rescission (the act of cancelling a policy from its inception)
Which of the following would be considered a named insured? Only those named Person away at school Resident spouse Any resident relative
Resident spouse
________ means a person chooses not to purchase insurance and pays for All of the loss, or a person pays a portion of the loss by way of a deductible
Retention
Which court case reversed the Paul vs Virgina case of 1868?
SEUA case of 1944
Inland marine form known as Personal Aritcles is similar to:
SPP endorsement in HO's
All the insured vehicles and trailers towed by the insured are excluded from coverage under ________
Section II
_______ is what the insured must pay before the Umbrella policy will respond if there is no coverage on the underlying policy or if the underlying insurance lapsed or was cancelled for some reason.
Self-insured retention
Which is not a reason for a company to obtain reinsurance share in the loss ratio with another company protect companies from major losses protect companies from catastrophic losses share the risk with another company
Share in the loss ratio. Companies don't do this
Protection and indemnity coverage includes all of the following claims EXCEPT shipping costs that must be paid a second time comprehensive and collision ship operator negligence job related injuries to employees
Shipping costs: are covered under the freight coverage part of an ocean marine policy
Which of the following are the main types of risks?
Speculative and pure
Which of the following is False about the characteristics of a BOP policy loss of income is coverage up to stated limit it typically has no coinsurance clause losses are valued at replacement cost the standard deductible is $500
Stated limit. Loss of income is up to 12 months
All of the following are excluded on an equipment breakdown form, except: Foundation breakdown Leakage of valves Steam boilers Functioning of any safety or protective device
Steam boilers
When someone willingly gives up the right to sue a person who was at fault, this is known as:
Subrogation
Who writes standard coverages in California but the insurer is unlicensed?
Surplus lines insurer
TF Refrigeration unit breakdown is covered under the B&M policy
T
Loss control refers to:
Taking the necessary precautions that will reduce the risk of a loss.
What must happen in order for coverage to be available is the purpose of:
The Cause of Loss Forms
Since CA uses the Prior Approval system in filing rates, what happens if the Commissioner fails to respond within 60 days?
The company may use the filed rates and may consider them approved
Under the workers compensation policy, disability income benefits are payable to a partially disabled worker when.
The injured worker can return to work, but is unable to earn income ONCE received
Aggregate limit refers to:
The most an insurer will pay in any one policy period. NOTE: Aggregate limit is the most an insurer will pay for all losses within the policy period. This limit refreshes at renewal.
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? The name would lead the public in the wrong direction The name gives the impression to the licensee is authorized to conduct a type of business it cannot legally conduct The name is politically connected to the government The name would interfere or is too similar to the name of another agency already licensed by the commission
The name is politically connected to the government
On a commercial policy , you & your refers to:
The named insured and resident spouse
Loss exposure refers to
The possibility of a loss
Loss is defined as:
The reduction, decline, or disappearance of value of the person or property insured in a policy, by a peril insured against.
Theft on the Commercial Crime coverage form includes all of the following EXCEPT: Theft of stock or inventory robbery burglary hold-up of an armored car
Theft of stock or inventory. covered under the CPP coverage B business personal property
What is the purpose of Named Non-owner coverage
This endorsement is for people who don't own a vehicle but still drive (rented, public transportation, company vehicle, etc)
Which of the following is NOT a purpose of the Unfair Practices Article? Th determine the punishment for an agency found guilty of unfair practices in insurance to regulate trade practices in the insurance business to protect the public from agents who practice bad methods of selling insurance to keep agents honest when selling insurance
To determine punishment
This coverage form that extends liability and physical damage to vehicles and trailers on a primary basis is named ___________.
Trailer interchange coverage
All of the following are common exclusion on the BAP, Except: Trailers the insured leases for business use pollution liability premises and completed operations property of others
Trailers. Liability coverage for a trailer always follows the limit of insurance on the vehicle that pulls it
Coverage that can be provided for goods shipped by several different carriers during a transport until they reach their ultimate destination is called ___________.
Trip transit coverage
An insurer CANNOT escape the condition of insolvency by being able to provide for its liabilities and reinsurance of all outstanding risks T/F
True
TF 30 days is required for anything other than non-pay and non renewal.
True
TF Impact with an animal is not covered under collision coverage
True
TF Sinkhole Collapse is covered on all 3 causes of Loss forms on the Commercial Causes of Loss special form policy
True
TF mobile equipment being transported to a job site falls off and hits a vehicle on the highway. Coverage would be provided under the CGL.
True. liability for injury or damage caused by mobile equipment is covered under CGL. A floater would be required to cover the mobile equipment
Coverage not included in a business auto policy would be umbi specified causes physical damage BI and PD
UMBI
Coverage that could apply to a hit and run accident UMBI Waiver of deductible UMPD All could apply
UMBI. does not require ID of the other operator
What regulates trade practices in the insurance business accordance with the intent of Congress
UPA determines practices in CA that constitute unfair methods of competition (unfair practices article)
The main function of what policy is to provide higher limits of liability insurance in excess amounts over the underlying policy?
Umbrella
The process of reviewing applications for insurance and the information on the application is: Underwriting Field Underwriting the job of the agent before accepting or rejecting an application Application evaluation
Underwriting
Along with the minimum liability coverages, what other auto insurance coverage is required to be offered?
Uninsured motorist and underinsured motorist
Coverage A of a building and Personal Property form would exclude all but: patios and driveways vacuum and floor waxer piers, wharves, docks indoor furnishings
Vacuum and floor waxer (equipment used to service the premises is covered)
Willful and malicious damage to property, including burglars entering or exiting is called ______
Vandalism
In a policy illustration, premiums tat come due but which are paid by dividends and other cash values of the policy are called:
Vanishing premiums
Which is not an "other coverage" in the dwelling forms? Volcanic eruption Breakage of glass Tenant inprovements Collapse
Volcanic eruptions (extended NOT other coverage)
The establishment of workers compensation laws:
Was foundational to building a relationship between the employer and employee
When can a partnership continue of a new partner joins?
after the department is notified within 30 days and changes are approved???
Which of the following can bind insurance? agent broker solicitor all
agent
Who has the ability to legally bind insurance for the insurer? insurance______ administrator agent solicitor broker
agent
Performance depends upon an uncertain future event is the feature: conditional unilateral aleatory adhesion
aleatory
Which of the following is issued under the Motor Truck Cargo Form? owners shippers truckers all
all
If the building has been vacant for 90 consecutive days prior to a loss, which of the following is false? Loss will not be covered if due to theft or attempted theft loss will not be covered if due to vandalism if loss is due to a fire, it will be covered but payment is reduced by 15% All are true
all are true
The commercial articles coverage form is provided on an: all risk basic broad acv
all risk
A legal term that describes the relationship between two parties is called: non-binding acts an agency a contract none
an agency
Insolvency means:
an insurer's inability to meet its financial obligations when they are due
Proximate cause refers to:
an uninterrupted chain of events resulting from negligence causes injury or damage
Which licensee can sell flood and earthquake coverage?
any broker agent
Which would not be a tort strict liability any legal wrong keeping a pet rattlesnake negligence
any legal wrong??
A legal right of recovery can be based on which of the following? torts statutes contracts any of these
any of these
Records must be made available to the Commissioner
at all times
In regards to personal watercraft, to receive coverage for physical damage payments the insured would need which of the following policies? hull yacht ocean marine boat owners
boat owners
_______ insures watercraft over 50 horsepower that can be towed behind a car:
boatowner policy
Materiality is determined by the disadvantage placed on the other party and: not by the event the influence of the facts both correct neither correct
both
Which of the following is not a class of insurance auto marine casualty fire
casualty. is a label used to describe various liability and crime coverages
Commissioner can suspend a permanent license without a hearing, except: Conviction of any felony client co-signing a loan license revoked last 5 years non are exceptions
client co-signing a loan??
Employers liability coverage covers what types of claims? common law claims part I claims part III claims statutory benefits
common law: brought by employees not covered under part I
An agents license may be renewed or reactivated at any time prior to its expiration by the filing of the following except: a new____ appointment bond company contract action notice
company contract
No rate shall be approved or remain in effect that contains all of the following except: inadequate excessively higher than the competition violation of CA insurance code unfairly discriminatory
competition.
All of the following are efforts the Department of Insurance takes to combat insurance fraud EXCEPT: every automobile insured is assessed about $1 per year to fund automobile insurance fraud task force activities every company is required to have a fraud detection unit every insurer pays an annual fee to fund the fraud detection units each company is required to submit a complete record of fraudulent claims made to the business each year
complete record each year
What is the MAIN role of the commissioner and the department of insurance regulate the conduct of agents and insurers in CA make sure consumers are not abused or taken advantage of by the companies and agents with whom they do business regulate the business of insurance in CA administer the CIC
conduct of agents. All are correct but this is the main
Which of the following is NOT a common exclusion in the Flood insurance program? fences contents money business incime
contents. can be purchased
Which one of the following is not one of the 3 principal parts to the privacy requriement of the Gramm-Leach-Bliley act? Credit reporting financial privacy rule safeguards rule pretext provisions
credit reporting
In California, a person may be all of the following except: a deceased person a trust a government 19 yo student
deceased, can be their estate
Which is not an exclusion under Coverage A on an HO 3? damage by insects damage by insureds dog Damage by a deer damage by vermin
deer
An insurer not authorized to conduct business in California would be: non admitted unauthorized neither either
either
An employee adds an extra zero to their paycheck. This is covered under:
employee dishonesty
A pretext interview is conducted when any person does one or more of any of the following except: pretends to be someone he is not misrepresents the purpose of the interview pretends to represent someone he is not actually representing refuses to identify himself upon the initial interview
identify himself. This should be, refuses to identify himself upon REQUEST not initial interview
The part of the policy that contains the description of coverages provided is:
insuring agreement
What are the two types of torts?
intentional and unintentional
Workers compensation insurance is insurance against loss from____
liability imposed by law
BOP is a package policy combining what types of coverages
liability, property, business income & extra expense and property of others coverage
Which of the following is NOT a supplementary payment under coverage A of a Personal Auto Policy? Post judgement interest $200 a day loss of earnings $250 maximum for bail bonds $500 a month loss of income
loss of income max is 200
Which of the following is a filed commercial inland marine form? contractors equipment mail coverage form EDP floater annual transit
This class of insurance protects against loss from damage done by lightning, windstorm, tornado, and earthquake.
miscellaneous
Johnny told the insurance agent that he THINKS he drive about 10,000 miles a year, but in fact is more like 15,000. What term would best describe this situation? Misstated fact concealment misrepresentation fraud
misstated fact
The Watercraft endorsement provides __________ coverage for Liability and Medical Payments to Others for scheduled boats.
moderate limits (better covered by a boatowners policy)
If a shipowner who purchases an Ocean Marine policy on an All Risk form runs into a dock while transporting cargo for a customer, the policy would pay for:
most complete... Damages to the ship, dock, cargo, and any resulting bodily injury; including that of injured employees
A fire that is intentionally set and remains within its intended limits is:
not covered??
All of the following may be written on a monoline basis, except General liability inland marine ocean marine boiler and machinery
ocean marine
In an Inland Marine policy, an annual transit policy is usually provided:
on a named perils basis
The perils that trigger coverage under the business income form are found:
on the Declaration page
Which of the following is not an exempt category under workers comp insurance? volunteers for a non profit organization a small business with only one employee a student who is a pitcher for the school baseball team a domestic employee who has earned only $90
one employee
The commercial Broad form Causes of loss include all of the following except: breakage of glass collapse ordinance or law all
ordinance or law is a common exclusion in all 3 causes of loss forms
Solvency requires the insurer to have enough assets to cover?
paid in capital, liabilities, and reinsurance
The amount the bond is issued for is known as the:
penalty
The product and completed operations hazard claims are subject to a ______ limit
per occurence
Not subject to the per occurrence limit on a CGL would be: Employer practices premises rented to you medical expense personal and advertising
personal and advertising
All of the following are true regarding the Gramm-Leach-Bliley Act except: the GLB ________ includes provision to protect customers against insurance companies financial failure is also known as the Financial Modernization Act of 1999 gives authority 8 federal agencies allows the administration of the Financial Privacy rule and the Safeguards Rule
protect customers against insurance companies financial future
In lieu of denying an application for a license the Commissioner can: issue a restricted license charge extra fees neither both
restricted
The uncertainty or chance of a loss occurring is known as: speculative risk risk pure risk
risk
Collison would pay for damages to the insured vehicle in which situation? Avalanche of rocks Running over branches Vehicle upset during riot Hitting a deer
running over something is collision. (Alternatives are OTC other than collision)
This form covers risk of direct physical loss subject to exclusions pertains to:
special form
Workers compensation claims settle based on:
statutory benefits NOT damages
An example of a self-regulatory authority of the insurance industry is:
the NAIC
The motor truck cargo form is designed to cover:
the interest of one who owns both the cargo and the truck for shipping
Combined ration is defined as:
the percentage of each premium dollar a company spends on claims and expenses
What is A responsibility of the commissioner
to enforce the law of insurance
The manner in which an agent conducts his day-to-day business and how he handles his consumers is defined as _______ customers relations agency trade practices estoppel
trade practices
The difference in perils covered on the commercial property policy and the standard form businessowners policy is: peril of robbery and safe burglary peril of theft peril of transportation peril of earthquake
transportation (property in transit)
Punishment for twisting or misrepresentation would be:
up to 25k or imprisonment
What could a penalty be for a person who transacts insurance without a valid license?
up to 50k and/or jail up to 1 year
Two perils that can be excluded from the vacancy permit are:
vandalism and sprinkler leakage
All of the following are examples of fiduciaries EXCEPT: administrators executors corporate directors vendor
vendor
Which of the following is NOT an excluded loss under the Commercial property forms? volcanic action contractual liability earth movement mechanical breakdown
volcanic action. is a covered peril under the commercial property form
If you paid for an auto policy that's effective next week but decide you want to cancel the day before it's effective, you get: pro rata whole short rate whole minus penalty
whole: insurer has not been exposed to any risk
A yacht policy provides this protection but the boatowner policy does not: Workers compensation none of these medical payments hull coverage
workers compensation (needs P&I)
