Insurance

What is the maximum penalty for habitual willful noncompliance with the Fair Credit Reporting Act?

$2,500

In the computer fraud crime coverage form, what limit is placed on each occurrence of the loss of manuscripts, drawings, or records?

$5,000

A licensed life producer has completed 12 of his continuing education hours for this period. How many more will he have to finish?

12

If an insurer is nonrenewing a Homeowners policy, it must mail or deliver to the insured written notice of its intention at least

30 days prior to the expiration date

Insurer examinations must occur no less frequently than every

5 years.

If an insurer decides to nonrenew a commercial policy, how much prior notice must be given to the first named insured?

60 days

The dwelling insured on HO-2, HO-3, or HO-5 forms is covered for replacement, provided that it is insured for at least what percentage of replacement cost on the date of loss?

80%

In the event of a loss covered by the policy, if the insurer requests a signed sworn proof of loss, the named insured is required to submit it within

A specified time.

An insured owns and operates a ranch. The insured has several vehicles that are used in the ranching operation and for personal use. Which of the following could NOT be insured under a personal auto policy?

A two-ton grain truck with a 6,500-pound capacity

Which coverage form would provide coverage for all incoming and outgoing shipments?

Annual transit

Which of the following would be considered an insured under a business auto coverage form?

Anyone while using, with permission, a covered auto owned by the named insured

Which bonds are issued to secure the release of a person from jail pending a courtroom appearance?

Bail bonds

Under the HO-4 and HO-6 homeowners policy forms, property is insured against

Broad form perils.

Which of the following would NOT be considered an exception to the National Do Not Call List?

Calls based from outside of the United States

What certification must an insurer receive before it can transact insurance in Louisiana?

Certificate of Authority

All else being equal, which of the following will NOT be considered unfair discrimination by insurers?

Discriminating in benefits and coverages based on the insured's habits and lifestyle

All of the following actions can be described as twisting EXCEPT

Explaining to client the advantages of permanent insurance over term and suggesting changing policies

Which of the following regulatory authorities participated in creating the National Do Not Call Registry?

FTC

Which of the following homeowners forms is designed to provide named peril coverage for personal property to individuals who rent an apartment?

HO-4

To comply with requirements for insurance for public liability under the Motor Carrier Act of 1980, which endorsement is added to motor carrier coverage form?

MCS-90

Several insureds have become liable because of a single loss. How will the policy's limit of liability be affected?

No more than the per occurrence limit applies, no matter how many insureds are involved.

The insurer must advise the named insured of possible eligibility for coverage through the Assigned Risk Plan when an auto policy is canceled for a reason other than

Nonpayment of premium.

An insured carries a property policy on her home in the amount of $250,000. A bank is shown as the mortgagor in the policy. Last month the insured made her final mortgage payment, but did not remove the bank from the policy. In the event of a covered loss to her home, how much will the bank receive?

Nothing

The Gramm-Leach-Bliley Act was passed to

Protect private customer information filed with a financial institution.

The Louisiana Automobile Insurance Plan was established to

Provide a method of insuring licensed drivers who are unable to purchase auto liability insurance in the voluntary market.

Following a career change, an insured is no longer required to perform many physical activities, so he has implemented a program where he walks and jogs for 45 minutes each morning. The insured has also eliminated most fatty foods from his diet. Which method of dealing with risk does this scenario describe?

Reduction

Which inland marine coverage condition states that payment of any claim will not reduce the limit of insurance, except in case of a total loss on a scheduled item?

Reinstatement of limit

In case of a loss, the indemnity provision in insurance policies

Restores an insured person to the same financial state as before the loss.

For insurance purposes, when an insured loses property to another because the person used violence or threat of violence to gain the property, this is defined as

Robbery.

Which of the following kinds of property would be covered under a dwelling policy?

Rowboats

In order to be covered by the U.S. Longshore and Harbor Workers Compensation Act, a worker must meet the requirements of the

Situs and status test

Under the Commercial Property Coverage program, the Basic Causes of Loss form insures against loss caused by

Sprinkler leakage.

In the event of a claim under a commercial general liability policy, the insured has all the following duties to the insurer EXCEPT

Submitting to a medical exam when requested.

The transfer of an insured's right to seek damages from a negligent party to the insurer is found in which of the following clauses?

Subrogation

Who is not considered an employee in a CGL?

Temporary worker

Which of the following entities established the Do-Not-Call Registry?

The Federal Trade Commission

In insurance, an offer is usually made when

The application is submitted.

All of the following statements concerning coinsurance are true, EXCEPT

The coinsurance formula also will be applied to total losses

A passenger in a friend's car is injured while getting into the car. Which of the following statements would apply if both the passenger and the driver had medical payments coverage under a personal auto policy?

The driver's policy would be primary.

All of the following are characteristics of the dwelling policy EXCEPT

The dwelling must be owner-occupied.

Which of the following would the livestock coverage form NOT insure against?

The euthanasia of livestock after being hit by a vehicle

When an umbrella policy is broader than underlying insurance and it pays a loss that is not covered by the underlying policy, it usually only pays

The excess over the self-insured retention.

Which of the following losses would be covered under the property damage liability coverage of a Personal Auto Policy?

The insured damages a rented garage when he failed to stop in time.

Under Crime Coverage Form I - Lessees of Safe Deposit Boxes, securities are only covered in the event of

Theft

Which of the following is NOT covered under Coverage E - Scheduled Farm Personal Property?

Turkeys

Agents who persuade insureds to cancel a policy in favor of another one when it might not be in the insured's best interest are guilty of

Twisting.

Which of the following best describes the amount of loss assessment coverage included under a homeowners policy liability coverage section?

Up to $1,000 per occurrence

How much coverage can be available for watercraft damage in the homeowners policy?

Up to $1,500

A type of policy that is used to provide a specific amount of replacement cost for a given risk after it has been destroyed is called a(n)

Valued policy.

A temporary license in this state is valid for

180 days.

A tornado that destroys property would be an example of which of the following?

A peril

The property condition that precludes the insured from simply turning over damaged property to the insurer and claiming a total loss is called

Abandonment.

While an insured's covered auto is in the repair shop following damage caused by a collision, the insured would have coverage for which of the following vehicles under a personal auto policy?

Any vehicle not owned by the insured, but furnished for use while the covered auto is out of normal use because of repair

According to the conditions of a workers compensation policy, the insurer has the right to inspect the insured workplace

At any time.

When an insured makes truthful statements on the application for insurance and pays the required premium, it is known as which of the following?

Consideration

All of the following are supplemental payments found in liability policies EXCEPT

Costs the insured incurred in hiring an attorney.

Which of the following best describes an insurance company that has been formed under the laws of this state?

Domestic

Insurance companies that hold a Certificate of Authority to transact insurance in Louisiana must be examined how often?

Every five years or as often as the Commissioner feels is necessary.

An insurer devises an intimidation strategy in order to corner a large portion of the insurance market. Which of the following best describes this practice?

Illegal

The pro rata liability clause is designed to protect the principle of

Indemnity.

Which of the following best describes a misrepresentation?

Issuing sales material with false statements about policy benefits

Melt Away Diet, Inc. circulates a flyer that falsely reports that its competitor, See Food Diet, markets a product that causes hair loss and skin rashes. This is an example of

Libel.

Which of the following policy conditions would automatically broaden coverage under a policy without requiring additional premium?

Liberalization

On its advertisement, a company claims that it has funds in its possession that are, in fact, not available for the payment of losses or claims. The company is guilty of

Misrepresentation.

Events in which a person has both the chance of winning or losing are classified as

Speculative risk.

In which of the following situations would off-premises coverage in a broad theft endorsement apply?

The insured's camera is stolen from his vacation home while he is there.

In forming an insurance contract, when does acceptance usually occur?

When an insurer approves a prepaid application

Within how many days of requesting an Investigative Consumer Report must an insurer notify the consumer in writing that the report will be obtained?

3 days

A nonresident producer moves to another state. The producer must notify the Department of Insurance of the address change within how many days?

30

An insured owns a building that is valued at $400,000. To comply with the 80% coinsurance provision of his insurance policy, how much should he insure the property for?

80% of the property's ACV or more

Sally did not want to worry about coinsurance in her new insurance policy, but wanted the insurance to represent a fair valuation for her property. What provision did Sally most likely use to do this?

Agreed value

Why don't commercial auto coverage forms automatically include medical payment coverage?

Often any person occupying a commercial vehicle would be covered under a workers compensation policy.

An agent offers his client free tickets to a sporting event in exchange for the purchase of an insurance policy. The agent is guilty of

Rebating.

A temporary license may be issued without examination to all of the following, EXCEPT

The spouse of a retired producer.

A specific coverage part is listed on the commercial package policy declarations page, but there is no premium shown. What does that mean?

There is no coverage.

A producer's license has been revoked for a violation of the Insurance Code. When can the producer apply for a new license?

Within 1 year of the revocation

Equipment breakdown coverage is written with a single limit of insurance per accident. However, what is the sublimit for hazardous substance cleanup, or repair or replacement of contaminated property?

$25,000

A $100,000 house insured on a policy with an 80% coinsurance requirement has a fire that caused $40,000 of damage; the owner has a policy with $60,000 coverage. How much can the owner collect for his loss?

$30,000

Bob has a personal auto policy with Part C, UM/UIM limits of $100/$300. He is injured by Jennifer, who has Part A, Bodily Injury Liability limits of $50/$100. The police determine that Jennifer is at fault for the accident. Bob has $125,000 in medical expenses. How much will Bob's Part C, UM/UIM pay?

$50,000

The commercial property declarations page contains which of the following information?

Description of the property insured

What is the minimum amount of coverage that should be carried on an HO-2 on a home that was purchased four years ago for $75,000, which today has a replacement value of $100,000?

$80,000

An insured couple owns a pontoon boat. Which situation would NOT be covered by their watercraft endorsement under their homeowners policy?

A friend rents their boat and runs it into a neighbor's dock

An insurance company assures its new policyholders that their premium costs will not increase for a period of at least five years. However, due to increasing financial strain, they plan to raise premium costs for all insureds by 10% over the next two years. What term best describes this act?

Fraud

Which of the following coverages would provide protection for the liability of an auto repair garage to owners of vehicles destroyed in the garage by fire?

Garagekeepers

Anyone covered under an insurance policy, whether named or not, is known as the

Insureds.

Which of the following would NOT be covered by HO liability insurance?

Intentional tort

Which bonds guarantee that the recipients of permits will comply with the ordinances associated with the use of such permits?

License and permit bonds

Under Commercial Crime Coverage Form K - Liability for Guests' Property - Safe Deposit Box, which covered is included?

Loss resulting from acts of employee dishonesty

An insured purchased an insurance policy 5 years ago. Last year, she received a dividend check from the insurance company that was not taxable. This year, she did not receive a check from the insurer. From what type of insurer did the insured purchase the policy?

Mutual

The livestock coverage form covers which of the following losses?

Named peril coverage for death of livestock

Which of the following reports will provide the underwriter with the information about a consumer's credit?

Consumer report

Which of the following statements is true concerning underinsured motorists coverage under a personal auto policy?

Coverage applies only to the extent that the underinsured motorists limits exceed the bodily injury limits carried by the operator of the other vehicle.

The extra expense coverage form provides

Coverage that will permit the insured to continue in business without interruption following a property damage loss.

Dwelling coverage includes all of the following EXCEPT

Land on which the dwelling is located.

Which rating method provides an insurer with that portion of a rate that does not include provisions of expenses (other than adjusting expense) or profit and is based on historical aggregate loss and loss adjustment expenses projected through development to their ultimate value and through trending to a future point in time?

Loss costs rating

A meteorite hits the insured's car, causing damage. Under which of the following coverages in a personal auto policy would this loss be paid?

Other-than-collision

If an insured bakery is sued because its marketing states that the products of another bakery may not be safe, which coverage of a commercial general liability will defend the suit?

Personal and advertising injury liability

Which of the following cases would constitute a violation of Louisiana's Controlled Business Statute?

Producer B writes a group policy covering a large hospital where his wife is the comptroller. This represented 27% of his commissions last year.

The purpose of insurance regulation is to

Promote the public welfare.

All of the following statements regarding a boatowners policy are true EXCEPT

Replacements for the boat listed in the Declarations are automatically covered, if the insured notifies the insurer within 60 days and pays the additional premium.

Burglary is defined as

Taking of property from within the premises leaving visible signs of forced entry.

Which of the following circumstances would be EXCLUDED under medical payments coverage of a personal auto policy?

The insured is injured while driving his motorcycle on his resident premises.

For the purpose of insurance, risk is defined as

The uncertainty or chance of loss

All of the following are special personal property limits under a homeowners policy EXCEPT

$500 for business personal property on the insured premises.

Norm has a Personal Auto Policy with both comprehensive (other than collision) and collision coverage. His car is stolen and recovered five days later. If Norm claims transportation expenses of $20 per day, how much will his policy pay?

$60

What fundamental doctrine in property insurance holds that when there is an unbroken connection between an occurrence and damage that grows out of the occurrence, then the resultant damage is all a part of the occurrence?

Doctrine of proximate cause

Wilber's house is located 1 mile from the county's new landfill and across the road from the entrance of a rock quarry. To rebuild the house if something happened to it would cost $150,000. But when Wilber tried to sell it, the best offer he received was $80,000. His insurance company will insure the house for only $80,000. How is Wilber's house insured?

Market value

An insured has a personal property replacement cost endorsement under her homeowners policy. If an expensive painting and an antique chair are stolen from the insured's home, what will the insured receive on the claim under that endorsement?

Nothing