WC Connecticut insurance school
In addition to or in lieu of suspension or revocation of an adjuster license for cause, the Commissioner may impose a fine not to exceed: $10,000. $25,000. $50,000. $5,000.
$5,000
A document that temporarily obligates an insurance company to provide coverage while the issuance of a policy is pending is known as:
A binder. EXPLANATION: A coverage binder provides temporary coverage while the insurer underwrites and issues the actual policy.
In order to lawfully write insurance business in a state, an insurance company must hold:
A certificate of authority. EXPLANATION: Insurers need a certificate of authority to be admitted and lawfully transact insurance in a state.
A defendant in a lawsuit has been found negligent. Due to this finding, the plaintiff has been awarded damages for pain and suffering. This means the plaintiff has received:
A general damage award EXPLANATION: General damage awards are known as "full tort" awards
An application submitted by a corporation for an adjuster license in Connecticut must be signed by:
A licensed officer
Binders Keepers, Inc. has submitted their premium rates to the Connecticut Insurance Department for approval. The Commissioner hires an actuary to help review the rates for approval. Which of the following entities will pay for the actuary?
Binders Keepers, Inc.
What is NOT TRUE regarding "common law"?
Common law is codified law EXPLANATION: The fact that common law is NOT codified is what separates it from statute (or statutory) law.
Which of the following is used to bring a standardized insurance form into compliance with state laws?
Endorsements. EXPLANATION: Endorsements to the standardized forms are used to change the coverage, bringing it into compliance with state laws.
A Connecticut casualty claims adjuster license must be renewed:
Every 2 years
The Connecticut Commissioner has reason to believe that Steve has violated an insurance law while carrying out business under his license. The Commissioner has sent Steve a notice of hearing on the matter. The hearing must be held:
Not less than 30 days from the date Steve was provided notice of hearing.
Which of the following is NOT a responsibility of the Insurance Commissioner in any given state?
Setting insurance rates. EXPLANATION: The Insurance Commissioner does not set insurance rates. He or she APPROVES the rates that the insurance company sets.
The predetermined amount of an insurance claim that is paid by the policyholder is known as:
The deductible. EXPLANATION: A deductible is the predetermined amount (listed in the policy) that they policyholder will pay on a claim. The term "deductible" is defined on Screen #5 of
Jewell has filed a lawsuit because she was injured by a negligent party. During the court proceeding, it is determined that Jewell was 10% negligent in her own injuries, but nonetheless the award for damages was set at $22,000. Jewell's state uses the pure comparative negligence standard to compute damage awards. Therefore, Jewell's damage award will be reduced by: a. $19.800. B. $22.000 C. $2,200. d. $O.
$2,200. EXPLANATION: 10% of $22,000 is $2,200. Jewell's damage award will be reduced by 10%, making the correct answer $2,200.
If the Commissioner determines that a person has willfully engaged in an unfair or deceptive act or practice he may impose of fine of up to for each and every act or violation. $500 $2,500 $25,000 $5,000
$25,000
Licensees must notify the Commissioner in writing of any change in business or residence address within ________ of the change.
30 days
Darren is applying for a casualty adjuster license in Connecticut. He lies on the application about being previously convicted of a felony and the Commissioner has decided to impose the maximum penalty for imprisonment. This means that Darren will be in jail for:
6 months
Which of the following initiates a lawsuit to deal with a liability insurance claim dispute?
A complaint EXPLANATION: To initiate a lawsuit to deal with a liability insurance claim dispute, a "complaint is issued. While the "proof of loss or "Statement of the claim" is PART of the complaint. it is not the complaint itself.
Margaret is a co-owner of a business. She purchases an insurance policy to cover the property of the business and lists Charlie, the other co-owner, on the policy. There are others covered by the policy that are referred to as employees. For the purposes of this policy, Charlie is considered to be:
A named insured. EXPLANATION: Charlie is a named insured on the policy because his name is listed, but he is NOT the first named insured.
Which of the following statements best describes "the law of agency"?
A relationship in which someone is authorized by contract to represent another party. EXPLANATION: A relationship in which someone is authorized by a contract with a principal to represent them as their agent. An "agent" can be an insurance agent, producer, adjuster, broker, consultant or any other professional who has been contracted to act as the "agent to the "principal".
What BEST describes a tort?
An act causing harm to an innocent party for which a civil remedy is provided through the payment of monetary damages EXPLANATION: When a tort is committed by a negligent party, the injured party is permitted to bring a lawsuit to request a "civil remedy" for their injuries and property damage.
In most states, which of the following most accurately describes an "admitted insurer"?
An insurer that can transact insurance in the state under a certificate of authority. EXPLANATION: An admitted insurer is one that is authorized by a state insurance department to conduct business in that state. A license, known as a certificate of authority is issued to admitted insurers
All of the following statements describe an element that must be present in determining the proximate cause of a liability loss, EXCEPT: A. An intervening cause B. An unbroken chain of events. C. A natural and continuous sequence. D. An uninterrupted sequence.
An intervening cause EXPLANATION: An "intervening cause" is an interruption to the sequence of events that must be uninterrupted in order to be the proximate cause of the loss.
The provision in an insurance contract that outlines the process of bringing a contract dispute before an objective third party for resolution is known as:
Arbitration EXPLANATION: The arbitration clause or provision in an insurance contract specifies the steps in the process of bringing an insurance contract dispute before an objective third party for resolution. Arbitration clauses are included in both property and liability (casualty) insurance policies.
All of the following are common-law duties of an employer under a workers' Compensation policy, EXCEPT: A. Warn workers of inherent dangers. B. Provide a safe working environment. C. Assumption of risk. D. Provide an adequate number of competent fellow workers.
Assumption of risk EXPLANATION: Assumption of risk is a common-law defense (not a duty) if a claim is filed. All of the other three answer choices are common-law duties.
The nonrenewal of an insurance policy occurs:
At the end of the policy period. EXPLANATION: The insurer "nonrenews" a policy at the end of the policy period. A "cancellation" may occur at different times and for different reasons.
A written modification of an insurance policy is known as a(n):
Endorsement form. EXPLANATION: An endorsement is used to add, subtract or modify the coverage. Endorsements are added to the policy in writing and take precedent over the original contract wording.
Ally's insurance agency has contracted with Indemnify Insurance to sell only those insurance products offered by Indemnify. Ally's is utilizing which of the following types of insurance marketing and distribution systems?
Exclusive agency system. EXPLANATION: When an agency agrees to represent only one insurance company and sell only that insurance company's products, they are using the exclusive agency system.
Before an insured can bring a lawsuit against their insurer to provide coverage under their policy, the insured must:
Fulfill all of their required duties as outlined in the policy. EXPLANATION: The "Legal Action Against Insurer" provision in most standard policies requires that the insured complete their required duties before they can bring a lawsuit against the insurer. The insured's required duties are different depending on whether the policy is a property or casualty policy and the type of coverage provided.
Bill was sued and the court determined that he was negligent. This means:
He failed to do what a reasonably prudent person would do in the same circumstance EXPLANATION: The answer contains the most widely accepted definition of negligence.
An application for a nonresident license in Connecticut will not be granted unless the applicant:
Holds an equivalent license from another state
Standard and Poor's, A.M. Best and Moody's are examples of:
Independent rating services EXPLANATION: The public relies on the information provided by these independent rating services to measure the financial stability of the insurers.
Which of the following would be considered compensatory special damages paid to an injured party when the insured is negligent and causes the injury?
Lost wages EXPLANATION: Compensatory special damages are awarded to an injured party for the economic losses such as lost wages caused by a negligent party.
For a liability policy to pay a claim, the person who is legally liable:
Must be an "insured" under the policy EXPLANATION: Liability policies pay on "behalf of the insured", this means ANY insured under the policy, not just the first named insured.
Using the modified comparative negligence standard, a plaintiff in a lawsuit who is 60% at fault for her injuries will receive:
No award EXPLANATION: The plaintiff will receive $0. Using the modified comparative negligence standard, if the plaintiff is 50% or more at fault for the injury or damage sustained, damages will not be awarded.
All of the following are duties of the insured after they cause a liability loss, EXCEPT: a. Notifying the insurance company of the third party b. Forwarding all legal documents concerning the claim to their insurance company c. Notifying their insurance company of the loss d. Cooperating with the insurance company by providing assistance with the claim or lawsuit.
Notifying the insurance company of the injured third party EXPLANATION: The insured who has caused injury or damage to a third party is not required to notify that third parties insurance company of the loss.
All of the following are factors in proving negligence, EXCEPT: A. Duty of care owed B. Others involved C. Causation D. Breach of duty
Others involved. EXPLANATION: There are four factors that must be present to prove negligence. "Others involved" is not one of those four factors.
A mutual insurance company is:
Owned by its policyholders. EXPLANATION: Policyholders own a mutual company and stockholders (sometimes called shareholders) own a stock company. Therefore, the difference between a mutual company and a stock company is "ownership".
Which of the following would be considered "general damages" that could be awarded to a plaintiff in a negligence case?
Pain and suffering EXPLANATION: General damages reimburse an injured party for intangible, non-economic items such as pain and suffering.
Which of the following best describes a "competitive" state when it comes to workers' compensation coverage?
Private insurance companies write workers' compensation coverage, but the state also writes coverage that competes with the coverage offered by private carriers. EXPLANATION: In a competitive state, private insurance companies write workers' compensation coverage, but the state also writes coverage that competes with the coverage offered by private carriers.
Regulation of the insurance industry in the United States is primarily left to:
State governments. EXPLANATION: The states carry the major burden of regulating insurance affairs with only issues involving fair labor standards and antitrust matters left to the federal government.
The "liberalization clause of an insurance policy:
States that if an insurer decides to broaden its standard policy coverages, then all outstanding policies issued prior to that decision will automatically receive those new coverages at no additional premium. EXPLANATION: If an insurer broadens (liberalizes) its standard policy, current policyholders will receive the broadened coverage without paying an additional premium.
A condition found in many insurance policies is known as "Transfer of Rights of Recovery Against Others to Us" actually refers to:
Subrogation. EXPLANATION: This condition is another name for "subrogation".
Which of the following types of insurance companies must charge a premium tax to be remitted to the state each time a policy is sold?
Surplus Lines company EXPLANATION: Surplus lines companies, as non-admitted companies, must charge a premium tax to insureds and remit that money to the state.
The most widely used property and casualty insurance forms used in the United States today are published by:
The Insurance Services Office, Inc. (ISO). EXPLANATION: The Insurance Services Office, Inc. publishes the most widely used property and casualty insurance forms used in the United States today.
When deciding whether or not to grant a casualty adjuster license, the Connecticut Commissioner will take into consideration all of the following, EXCEPT: A. The applicant is properly qualified. B. The applicant is trustworthy. C. That granting the license will not be against the public interest. D. The applicant has sufficient experience in adjusting claims.
The applicant has sufficient experience in adjusting claims.
Which of the following insurance marketing or distribution systems includes agents that are hired as actual employees of the insurance company?
The direct writer system. EXPLANATION: Using the direct writer system to market and sell insurance, the agents are actually hired as employees of the insurance company.
Under a liability policy, "supplementary payments" include all of the following, EXCEPT: a. Pre- and post judgment interest. b. The negotiated settlement c. The insured's travel expenses when incurred at the insurer's request in defense of a claim. d. Appeal and bail bonds.
The negotiated settlement EXPLANATION: The negotiated settlement is considered to be "damages", not supplementary payments. The other three answer choices ARE covered under supplementary payments.
A requirement that a plaintiff file a lawsuit within a specific period of time after the cause of the lawsuit has occurred, which is oftentimes when the injury occurred or was discovered is known as:
The statute of limitations. EXPLANATION: A requirement that a plaintiff file a lawsuit within a specific period of time after the cause of the lawsuit has occurred, which is oftentimes when the injury occurred or was discovered is known as the statute of limitations.
The purpose of licensing surplus lines brokers in a given state is:
To allow them to place business with nonadmitted insurers. EXPLANATION: Nonadmitted insurers are known as "surplus" or "excess" lines companies. An agent must hold a surplus lines brokers license to transact business with a nonadmitted insurer and only then if the line of insurance is not readily available within the state from admitted insurers.
What is the purpose of an Insurance Guaranty Association?
To pay covered claims of admitted insolvent insurers. EXPLANATION: The purpose of any Guaranty Association is to pay the covered claims of admitted insolvent insurers.
What is the main purpose of government regulation of the insurance industry?
To protect the insurance consuming public EXPLANATION: The purpose of government regulation of the insurance industry is to protect insurance consumers.
Under the A.M. Best insurance company rating system, a rating of "E" means that the company is:
Under state supervision. EXPLANATION: The A.M. Best "E" rating means the insurance company is under state supervision.
All of the following statements are true regarding Public Law 15 (The McCarren-Ferguson Act), EXCEPT: A. Under the law, the federal government retains the right to approve insurance forms. B. The law assigned authority to the federal government to regulate fair labor standards. C. The law left insurance licensing up to the states. D. Under the law. the states regulate the ethical conduct of its insurance licensees.
Under the law, the federal government retains the right to approve insurance forms. EXPLANATION: The federal government does not approve insurance forms, this is left to the state insurance departments.
Which of the following terms means "liability through another person"? A. Strict/Absolute liability. B. Vicarious/Imputed liability. C. Gross liability. D. Intentional tort.
Vicarious/Imputed liability. EXPLANATION: Vicarious means "through or in place of another person." There are times when a person may be held responsible for the negligent acts of another person. This is known as vicarious or imputed liability.
When can an insured assign his or her insurance policy over to another party?
When the insurer provides written consent EXPLANATION: The assignment clause states that the policy may only be assigned with the written consent of the insurer.
Leland has two insurance policies covering his home. Indemnify Insurance carries a $120,000 limit of liability on the home, while Binders Keepers, Inc. carries a limit of $80,000. A fire breaks out in Leland's kitchen and causes $40,000 in damage. Remember, when there are two or more policies covering the same risk, the "other insurance clause", determines the method used to calculate each company's share of the claim. Leland's policy states that the pro-rata share method will be used. Which of the following is the correct amount that will be paid by Indemnify Insurance?
$24,000 EXPLANATION: Using the pro-rata share method, where we divide Indemnify Insurance's share of the loss by the total limit of both policies, multiplied by the loss, leaves Indemnify paying 60% of the loss. 60% of the $40,000 loss, is $24,000.
The Insurance Commissioner/Director/Superintendent of a given state would refer to an insurance company formed under the laws of a different state as a
A foreign insurer EXPLANATION: The Insurance Commissioner/Director/Superintendent of a given state would refer to an insurance company formed under the laws of a different state as a foreign insurer. For example, the Superintendent in New York would refer to an insurer that was formed under the laws of Arizona as a "foreign insurer".
Which of the following BEST describes a tort?
An act causing harm to an innocent party for which a civil remedy is provided through the payment of monetary damages EXPLANATION: When a tort is committed by a negligent party, the injured party is permitted to bring a lawsuit to request a "civil remedy" for their injuries and property damage.
Which of the following circumstances would NOT be an injury considered to "arise out of and in the course of" the employment? a. An employee was injured during a lunch break in the factory parking lot. b. A work-related accident occurred when the risk of injury was well known to the employee. c. An injury to an employee was caused by the carelessness of another worker. d. A workplace injury was caused by an employee's own negligence.
An employee was injured during a lunch break in the factory parking lot.
Alec goes to an amusement park and rides a roller coaster that was designed to flip the riders upside down. Alec is taller than the average person so when the roller coaster flips, he hits his head on the safety bar. After receiving medical care, Alec files a claim against the amusement park, seeking payment for his medical bills, pain and suffering. What defense against negligence would the amusement park most likely use to deny this claim? a. Assumption of risk. b. Contributory negligence. c. Comparative negligence. d. Intervening cause.
Assumption of risk EXPLANATION: The "Assumption of Risk" defense applies when a person knowingly exposes him/herself to danger or injury.
In Connecticut, an insurance license may be suspended or revoked for all the following reasons, EXCEPT: A. Misrepresenting the terms of an insurance contract. B. Having a license suspended in another state. C. Violating a subpoena from the Commissioner. D. Conviction of a misdemeanor.
Conviction of a misdemeanor. (can be revoked or suspended with conviction of a felony)
"Ambiguous language" in an insurance policy means language that is all of the following, EXCEPT: A. Confusing to the insured. B. Vague. C. Fortuitous to the insured. D. Easily misunderstood.
Fortuitous to the insured does not mean "ambiguous language"
Any corporation organized with a representative form of government operated solely for the mutual benefit of its members is known as a:
Fraternal benefit society. EXPLANATION: The question gives the definition of a fraternal benefit society. Also look for the phrase "lodge system" on any state exam to help define a fraternal insurer.
Torts that can be covered by insurance policies include all of the following, EXCEPT: A. Intentional torts committed with intent, but the results of the act had unintended consequences that caused harm to another. B. A negligent tort in which a failure to act, caused harm to another. C. Vicarious liability due to an employee causing harm to another and the negligence is imputed to the employer. D. Intentional torts purposely committed to cause harm to another.
Intentional torts purposely committed to cause harm to another EXPLANATION: The torts addressed by insurance policies can be classified as intentional and unintentional torts, and liability without fault (strict liability).
Tort law applies to all of the following, EXCEPT: A. Liability arising from the commission of an unintentional tort. B. Liability arising from negligence. C. Liability arising from a breach of duty. D. Liability arising from breach of contract.
Liability arising from breach of contract. EXPLANATION: A tort is a civil wrong, not arising from a contract. Contract law is a completely different branch of law.
Lisa is hired by "Claims R Us" and her new employer is anxious to have her begin adjusting claims and making money for the company. Lisa is having difficulty passing the course to prepare her for the state licensing exam and has no confidence that she will pass it. Her manager Dale, offers to take the state licensing exam on Lisa's behalf and she agrees. Which of the following statements is CORRECT when Lisa and Dale are caught?
Lisa and Dale will both be penalized.
An insurance marketplace where underwriters meet with insurance brokers to create an insurance agreement is known as:
Lloyd's of London. EXPLANATION: Lloyd's of London is not really an insurance company but an insurance marketplace where underwriters and brokers meet to structure insurance agreements.
A type of insurance that permits an insured to collect from his/her own insurance company, without proving the negligence of a third-party, is known as:
No-fault EXPLANATION: A type of insurance that permits an insured to collect from his/her own insurance company, without proving the negligence of a third-party, is known as "no-fault".
Private, unincorporated mutual insurers that consist of associations that agree to equally share risks among its members are known as:
Reciprocal exchanges. EXPLANATION: Private, unincorporated mutual insurers that consist of associations that agree to equally share risks among its members are known as reciprocal exchanges.
In a liability policy, the limits of coverage can be expressed as all of the following, EXCEPT: a. Restricted b. Single c. Split d. Aggregate
Restricted EXPLANATION: There is no such policy limit known as restricted limit.
Surplus lines insurers must pay a premium tax ____________________ sets the amount of the premium tax.
State law EXPLANATION: State law determines the amount of a surplus lines premium tax.
Wyatt is a blasting contractor who set off a blasting charge, damaging several buildings in the area and causing severe bodily injury to several people. Which of the type of liability apply in this scenario?
Strict liability EXPLANATION: Strict (Absolute) liability would be applied here without any need to prove negligence. Strict liability (also known as absolute liability) is imposed by law (statute) on those who participate in especially hazardous activities.
What type of liability is specifically imposed by statutory law?
Strict liability. EXPLANATION: Strict (absolute) liability is specifically imposed by statute. Basically, there is little if any defense on the part of the negligent party because they are involved in activities of inherent danger.
Which of the following statements is NOT TRUE of the Connecticut Division of Consumer Affairs within the Insurance Department? A. The Division serves as a mediator in insurance disputes. B. The Division conducts outreach programs to educate the public on insurance matters. C. The Division receives and reviews complaints from residents of Connecticut regarding their claims disputes. D. The Director of the Division must submit annual reports to the Governor.
The Director of the Division must submit annual reports to the Governor. (the director of the division submits annual reports to the commissioner. Commissioner submits annual reports to the Governor)
All of the following statements are TRUE with regard to punitive damages, EXCEPT: a. They are awarded in addition to compensatory damages. b. They are awarded in such a high amount that the court will not award compensatory damages to the plaintiff because they are no longer necessary. c. They are awarded when the acts of the defendant are egregious and contrary to social norms. d. They are used to punish the defendant and to act as a deterrent to others.
They are awarded in such a high amount that the court will not award compensatory damages to the plaintiff because they are no longer necessary EXPLANATION: Punitive damages do NOT replace any compensatory damages awarded by the court. Punitive damages are awarded in addition to compensatory damages.
In most states, workers' compensation laws apply:
To most workers except those specifically excluded by state statute. EXPLANATION: State statutes determine the types of employments are required to cover employees for workers' compensation.
All of the following are reasonable duties of care that are required of employers with regard to workers' compensation, EXCEPT: a. Provide an adequate number of competent employees. b. Provide safe tools and equipment to workers. c. Warn workers of obvious dangers. d. Make and enforce rules for the safety of all workers.
Warn workers of obvious dangers EXPLANATION: Employers are required to warn workers of INHERENT dangers. In the case of workers compensation coverage, this would mean the employer has the duty to warn workers of the dangers that are a part (inherent) to the job. Employers are not required to point out obvious dangers.
Under a liability policy the insurance company will pay damages on behalf of an insured when:
When it is established that the insured is legally liable EXPLANATION: Remember that a third-party liability claim will only be paid after it is determined that the insured is "legally liable". This determination can be made by a court or by agreement between the claimant and the insurance company.
A lawsuit has been settled in a state where liability is settled according to the comparative negligence rule. The court rules that the plaintiff was 15% negligent in her own injuries. Her damages: a. Will be paid in full. b. Will not be awarded. c. Will be reduced by 15%. d. Will be reduced by 85%.
Will be reduced by 15% EXPLANATION: When the comparative negligence rule applies, the plaintiff's damage award is reduced by the percentage the plaintiff was negligent in their own loss.
All of the following statements are TRUE regarding a proof of loss statement, EXCEPT: A. The insurance company will provide the proof of loss forms to be completed by the insured. B. The proof of loss will contain the amount of the loss being claimed by the insured. C. A proof of loss is the formal statement of a claim completed by the insured. D. A proof of loss is also known as a loss notice.
A proof of loss is also known as a loss notice. EXPLANATION: A proof of loss is the formal statement submitted to the insurer listing the details of a loss such as: • The amount of the loss claimed; · Documents supporting the amount of the loss claimed; • The parties claiming a loss under the policy; • The date and cause of the loss; and • The people who have an interest in the claim. Remember that the proof of loss is NOT the "loss notice". Insureds are expected to provide a loss notice to the insurance company or their agent right away after they experience the loss. The company will provide the insured proof of loss forms, or instructions to access the forms online. The insured is expected to submit those forms within the time period specified by law.
In which of the following cases of alleged negligence would the defendant not be legally liable? A. Bill was restoring an antique auto at his auto store's garage when Jeff drove by the garage. Jeff slowed his car and looked over his shoulder to admire the antique car. Suddenly his car struck a telephone pole. Jeff sues Bill for damages. B. Jack was having a walkway at his business replaced. There were still several large spaces to be filled when a mail carrier, whose back was broken from the fall, sued Jack for damages. C. Irene purchased several jars of crabapple jam from a gourmet jam and jelly company. She suffered severe gastric disturbance as a result of eating the jam and sued for damages from the jam and jelly company. D. Susan accidentally dropped a bowling ball on the foot of Lynette at the local bowling alley. Lynette sued Susan for damages.
Bill was restoring an antique auto at his auto store's garage when Jeff drove by the garage. Jeff slowed his car and looked over his shoulder to admire the antique car. Suddenly his car struck a telephone pole. Jeff sues Bill for damages. EXPLANATION: Bill does not owe Jeff for the damages his vehicle sustained. Jeff was negligent for not being more attentive while driving.
A liability policy written on an "occurrence" form:
Covers a liability claim when the occurrence took place during the policy period, regardless of when the claim is filed EXPLANATION: The "occurrence" form will cover a liability claim, when the occurrence took place during the policy period, regardless of when the claim is filed. So if the claim is filed after the policy expiration, but the occurrence took place during the policy period, the claim is covered.
Binders Keepers, Inc. is selling their insurance products via telephone calls. Which of the following insurance marketing and distribution systems is being utilized by Binders Keepers?
Direct response system EXPLANATION: When an insurance company sells their insurance products via direct mail, the telephone, or internet without an agent they are using the "direct response system" of insurance marketing.
It has been reported to the Insurance Department in a given state that Callie, a licensee in that state, has violated an insurance law. The Insurance Commissioner will hold a hearing to determine the nature of Callie's behavior. After the hearing, the Commissioner is convinced that Callie has engaged in behavior that violates insurance law. Which of the following is the next step the Commissioner will take?
Issuing a cease and desist order. EXPLANATION: The first step the Commissioner in any state would take is to issue a cease and desist order. This prevents the offender from engaging in the behavior until the Department can determine all the facts of the case, including whether or not members of the public were damaged financially by the offenses committed.
Which of the following is NOT TRUE with regard to a resident adjuster license in Connecticut? A. The applicant individual must reside in Connecticut. B. The applicant may have its principal place of business in any state including Connecticut. C. The applicant must be financially responsible. D. The applicant must be of good moral character.
The applicant may have its principal place of business in any state including Connecticut.
Libby completed an application for a new residential policy to cover her home, stating that she does not use the dwelling for business purposes. However, Libby has been conducting business operations from the home and has hired several employees who work out of the home. She also has several clients per day coming to the home for business purposes. When Libby's insurer finds out about the additional business exposures, they decide to take action. Which of the following actions is Libby's insurer most likely going to take?
Void her policy to inception. EXPLANATION: Libby made a material misrepresentation in the application. Her policy will most likely be voided to its inception.
On Monday afternoon, Carissa's boss requested that she finish updating the company website by Tuesday morning. Carissa did not want to stay at the office late into the evening so she took her work home to complete it there. On the way home, Carissa remembers that she left an external hard drive back at the office. This hard drive contained files that she needed to complete the website updates so she turns her car around and heads back to the office to retrieve it. Two blocks away from her office, another car runs a stop light and smashes into Carissa's car, severely injuring her. Which of the following statements would be TRUE in how Carissa would be handled by her employer's workers compensation coverage?
Carissa's injuries are not compensable as she was commuting to work and coverage does not apply in that case EXPLANATION: Workers' compensation laws do not apply to employees when they are commuting to and from work.
If the "other insurance" clause in a policy specifies that more than one policy will share equally in the loss until the lowest policy limit is exhausted and continue in that fashion until all policy limits are exhausted. This is known as:
Contribution by equal shares. EXPLANATION: If more than one policy covers a loss, "contribution by equal shares" will require each policy to share in the loss up to the lowest limit of insurance until the lowest limit policy is exhausted. The remaining companies continue to share the loss equally until each policy is exhausted.
Sam the shopkeeper mops the floor of his store and forgets to set the "Caution: Wet Floor" sign in the area to warn his customers. Sarah walks through the store a few moments later, slips on the floor and injures her arm and leg. This is an example of
A negligent tort. EXPLANATION: Sam was careless in not putting out the sign, therefore he committed a negligent tort and Sarah can seek a civil remedy for her injuries.
An insurer that was chartered under the laws of a Canadian province but conducting business in Minnesota, would be considered a(n) __________ insurer by the Minnesota Department of Insurance:
Alien EXPLANATION: Insurance companies domiciled/chartered outside the borders of the United States but are admitted to conduct business in a state or territory of the United States are known as alien insurance companies in those states
Mike's Moonshine, Inc. is located in a state that permits Mike to decide whether he would like to provide workers' compensation coverage to his employees or not. Mike lives is a(n):
Elective state EXPLANATION: If a state allows an employer to choose not to provide workers' compensation coverage for its employees, it is known as an "elective" state.
Mike purchased a policy several years ago to cover him for liability. Last year, Mike determined that the limits of his liability policy were not high enough to cover him adequately should a loss occur, so he purchased an excess liability policy to provide more coverage. Mike experiences a loss, and discovers that his underlying liability policy had expired before the loss, but his excess liability policy is still in effect. How will this loss be paid?
It will be denied, due to nonconcurrency EXPLANATION: The claim will be denied, due to nonconcurrency. If the underlying liability policy was expired, the excess policy will not be triggered to pay anything on the claim.
When the insurer pays the proportion that its policy limit bears to the limits of all policies, this is known as:
Pro-rata share EXPLANATION: When each insurer covering the risk pays the proportion that their limit bears to the limits of all policies, this is known as "pro-rata share".
Which of the following statements best describes the term "fiduciary".
A person who is entrusted with the assets of another . EXPLANATION: Insurance companies, agents, producers and adjusters have a fiduciary responsibility to their clients in the collection and handling of premiums, claim payments, and return of unearned premium. All of these items are "assets" that the fiduciary has been entrusted to handle.
Which of the following terms best describes an accident including continuous and repeated exposure to similar harmful conditions?
Occurrence EXPLANATION: "Occurrence" is the most widely used definition of the cause of bodily injury or property damage liability. It includes the term "accident" which is the sudden and accidental cause of loss.
All of the following injuries occurring on the job would probably be deemed compensable, EXCEPT: a. A cerebral hemorrhage occurring at work and caused from years of high blood pressure. b. A back injury resulting from lifting a heavy object with another employee. c. A heart attack from overexertion while moving an object at work. d. A foot injury caused by a fellow employee running over it with a tow motor.
A cerebral hemorrhage occurring at work and caused from years of high blood pressure EXPLANATION: A cerebral hemorrhage that occurred from years of having high blood pressure is not an injury that arose out of and in the course of employment. This would not be covered under workers' compensation.
Chris is insured through Binders Keepers Insurance Company and his policy period ends in 12 months. However, Chris has decided that he wants to cancel his policy in order to purchase another one from a company that advertises with cute commercials on television. Chris calls his agent to cancel the policy and is informed that the unearned premium (UEP) on the cancelled policy will be returned to him by mail in a couple of weeks. When Chris receives the check, he is surprised to find that it's made out for less than the amount of unearned premium he should have received. What is the most likely reason for this?
Chris' policy had a provision stating that UP must be returned on a short-rate basis. EXPLANATION: Many policies require that UP be returned on a short-rate basis if the insured cancels the policy mid-term. This allows the insurer to keep a greater percentage of the UEP, than if the insured cancelled after the policy period or if the UEP was returned on a pro-rata basis.
Describe the fundamental trade-off of Workers' Compensation insurance.
Employees are provided no-fault benefits for most work-related injuries in exchange for the loss of the right to sue the employer for damages. EXPLANATION: Workers compensation insurance provides a fundamental trade-off. This trade-off means that covered employees who are injured in an accident at work lose their rights to sue their employers, in exchange for being provided certain medical, loss-of-income, rehabilitation, and death benefits, regardless of who is at fault
Rick has three insurance policies covering his small commercial building for $700,000. Insurer 1: Carries $400,000 of the coverage. Insurer 2: Carries $200,000 of the coverage. Insurer 3: Carries $100,000 of the coverage. According to the provisions of the policies, the loss will be settled using the contribution by equal shares method. When Rick's building suffers a $500,000 covered loss, which of the following statements is correct on the amount each insurer will pay?
Insurers 1 and 2 will each pay $200,000 and Insurer 3 will pay $100,000. EXPLANATION: With the contribution by equal shares method, all insurers pay an equal amount until the loss is paid or one of the policy limits is exhausted. Because Insurer 3 has the lowest policy limit of $100,000, all three insurers will each pay equal shares of $100,000. This takes care of $300,000 of the $500,000 loss and exhausts the policy limit of Insurer 3. This leaves Insurers 1 & 2 left to pay $200,000. If they each pay an equal share of the $200,000, they will each pay $100,000 on the remainder of the loss. This means Insurers 1 and 2 pay a total of $200,000 each and Insurer 3 paying $100,000 for a total of $500,000.
Ellie's Engineering, Inc. has several warehouses and it is necessary for employees to transport different items between the warehouses, depending on what products are being manufactured at any given time. One day Bill, Karen, and Josh were required to load several containers of an explosive chemical onto a truck to transport it across town to another warehouse. Karen knew that the chemical must be handled carefully to prevent it from exploding, but she did not refuse to move the containers nor did she indicate to Bill and Josh that the chemical was dangerous. After loading the containers, Josh is moving the truck out of the loading zone and negligently backs it into a brick wall, causing an explosion, injuring all three workers. Bill died from the injuries several days after the accident. Which of the following statements most accurately describes the common law defenses) that Ellie's Engineering might use to defend themselves against a lawsuit filed by Karen? a. The contributory negligence doctrine only. b. The assumption of risk, contributory negligence, and fellow worker doctrine. c. The assumption of risk and the fellow worker doctrine only. d. The assumption of risk only.
The assumption of risk and the fellow worker doctrine only. EXPLANATION: Ellie's Engineering may assert that Karen assumed the risk by knowing the danger and not refusing to load the chemicals. Ellie's might also assert the fellow worker doctrine due to Josh's negligence in causing the explosion. Ellie's would not assert the contributory negligence doctrine because she did not commit the negligent act of backing the truck into the brick wall, causing the explosion.
