Alabama Law supplement

Which of the following statements about company appointments is NOT correct? A. Producers can transact insurance with insurers with whom they have appointments only. B. Producers can hold appointments from only one insurer. C. Insurers must file a written notice of their appointments with the Director. D. Appointments must be renewed annually.

d. appointments must be renewed annually

Unless revoked or suspended, an insurance producer license will remain in effect for A. 1 year B. 2 years C. 5 years D. as long as the license renewal fee is paid and the continuing education requirements are met

d. as long as the license renewal fee is paid and the continuing education requirements are met

How often must the Commissioner examine domestic insurers? A. Only when a violation is suspected B. At least every 6 months C. At least once each year D. At least every 5 years

d. at least every 5 years

Which of the following is NOT considered an unfair trade practice? A. Rebating premiums B. Circulating a statement claiming that another insurer is in danger of going bankrupt C. Inflating the dividend amount when discussing the policy's advantages with potential policyowners D. Paying bonuses to life insurance policyowners out of surpluses

d. paying bonuses to life insurance policyowners out of surplus

Upon written demand by a person aggrieved, the Commissioner must hold a hearing within A. 10 days after receipt of the demand B. 14 days after receipt of the demand C. 20 days after receipt of the demand D. 30 days after receipt of the demand

D. 30 days after receipt of demand

A premium reduction for an insured who is 55 or older and who completes an approved motor vehicle accident prevention course is effective for how many years after the insured completes the course? A. 2 B. 3 C. 4 D. 5

b. 3

If the Commissioner denies a request for an extension to comply with the continuing education requirements, the licensee must complete the continuing education requirements within how many days of being notified of the denial? A. 15 B. 30 C. 60 D. 90

b. 30

A surplus lines producer must file an affidavit form within how many days of the effective date of insurance? A. 10 days B. 30 days C. 45 days D. 60 days

b. 30 days

Workers' compensation benefits for temporary partial disability will be paid for a maximum of A. 52 weeks B. 300 weeks C. 3 years D. 7 years

b. 300 weeks

A temporary insurance producer license may be issued for up to A. 3 months B. 6 months C. 9 months D. 1 year

b. 6 months

A person who for compensation investigates and negotiates settlement of claims arising under insurance contracts on behalf of an insurer is A. a consultant B. an adjuster C. a service claims representative D. a financial planner

b. an adjuster

A notice of cancellation of an automobile insurance policy for nonpayment of premium must be mailed or delivered to the named insured at least how many days before the effective date of cancellation? A. 5 B. 7 C. 10 D. 20

c. 10

How many hours of continuing education must a producer complete per license renewal cycle? A. 12 B. 18 C. 24 D. 30

c. 24

In some situations, a producer may request an extension in order to provide CE requirements. The extension, if granted is for ____ month(s). A. 1 B. 2 C. 3 D. 4

c. 3

An injured employee must give the employer written notice of an accident within how many days after the accident? A. immediately B. 7 days C. 5 days D. 3 days

c. 5 days

What are the minimum hours (classroom or online) required for the driving course for insureds over age 55? A. 2 B. 3 C. 6 D. 8

c. 6

For an injury producing temporary total disability, the workers' compensation benefit is what percentage of the employee's average weekly earnings at the time of the injury? A. 25% B. 50% C. 66 & 2/3% D. 75%

c. 66 & 2/3%

A binder is not valid beyond the issuance of the policy for which it was given or beyond how many days? A. 30 B. 60 C. 90 D. 120

c. 90

What nonprofit association in Alabama protects owners of policies issued by insolvent insurers? A. Alabama Board of Insolvency B. Alabama Department of Insurance C. Alabama Insurance Guaranty Association D. Alabama Life, Accident, and Sickness Insurance Pool

c. Alabama insurance guaranty association

An applicant who fails two examinations for the same line of authority must wait how long to take another examination for that line of authority? A. 3 months B. 6 months C. 9 months D. 1 year

A. 3 months

The Commissioner may do all of the following EXCEPT A. change insurance laws for the good of the general public B. enforce the provisions of the insurance law C. conduct examinations of insurance companies D. supervise and administer the Insurance Department

A. Change insurance laws for the good of the general public

The minimum capital required to form and organize a new domestic stock life insurance company in Alabama is A. $100,000 B. $1 million C. $5 million D. $10 million

B. $1 million

To receive a license as a resident insurance producer, an applicant must be at least A. 16 years old B. 18 years old C. 21 years old D. 25 years old

B. 18 years old

In Alabama, the Commissioner of Insurance is A. voted into office by general election B. appointed by the governor C. selected by the state Senate D. appointed for a two-year term by the Secretary of State

B. Appointed by the governor

Surplus lines insurance may be obtained in all the following situations, EXCEPT A. to obtain insurance not available from authorized insurers B. to obtain a lower premium C. if obtained through a licensed surplus lines producer D. the insurance has been obtained to the full extent authorized insurers are willing to insure

b. to obtain a lower premium

A producer must keep complete records pertaining to transactions under the producer's license for at least A. 1 year B. 2 years C. 3 years D. 5 years

C. 3 years

A surplus lines broker must file a bond in the amount of A. $10,000 B. $25,000 C. $50,000 D. $100,000

c. $50,000

A person may provide evidence of compliance with the state's financial responsibility law in any of the following ways EXCEPT A. with a policy of automobile liability insurance B. with a bond in favor of the state in the amount of $25,000 C. by becoming a qualified self-insurer D. by making a cash deposit with the state treasurer

b. With a bond in favor of the state in the amount of $25,000

Insurance that is placed with unauthorized or nonadmitted insurers must be placed through A. any licensed producer B. a licensed surplus lines broker C. a managing general agent D. the Alabama Insurance Guaranty Association

b. a licensed surplus lines broker

The Insurance Guaranty Association is obligated to pay any covered claim that is more than $100 and less than A. $150,000 B. $250,000 C. $500,000 D. $1 million

a. $150,000

. The required coverage limits under Alabama's mandatory automobile liability insurance law are A. 25/50/25 B. 30/60/10 C. 25/50/20 D. 50/100/25

a. 25/50/25

A licensee must inform the Commissioner of a change in legal name or address within how many days of the change? A. 30 B. 60 C. 90 D. 120

a. 30

Which of the following statements about terminating a producer's appointment is CORRECT? A. An insurer may terminate a producer's appointment at any time. B. If a producer's appointment is terminated, the insurer must notify the Commissioner within 90 days. C. Information about the producer's termination generally is not privileged and is admissible in court proceedings. D. An insurer may terminate a producer's appointment by giving 30 days' written notice.

a. an insurer may terminate a producer's appointment at any time

How much of a covered workers compensation claim must the Guaranty Association pay? A. Full amount B. Amount in excess of $100 C. Up to a maximum of $150,000 D. Up to a maximum of $300,000

a. full amount

Offering to give a prospect anything of value not specified in the contract to persuade the prospect to purchase the insurance is A. rebating B. twisting C. embezzlement D. coercion

a. rebating

To ensure that its certificate of authority remains in effect, an insurer must pay the filing fee and A. submit an annual statement by March 1 B. submit a financial statement by June 1 C. certify that it is solvent D. certify that its certificate has not been suspended, revoked, or terminated

a. submit an annual statement by march 1

The Commissioner of Insurance may conduct hearings regarding unfair trade practices by giving how many days' notice to the parties involved? A. 5 B. 10 C. 14 D. 45

b. 10

Continuing education requirements do not apply to producers licensed under ____ months at the time of their first renewal. A. 6 B. 12 C. 24 D. 36

b. 12

Which of the following statements regarding the fiduciary duty of a producer is CORRECT? A. Premiums may be kept in the producer's personal account. B. A producer may never receive money meant for the insurer. C. All premiums received by a producer must be held in trust and cannot be used for personal matters. D. Up to $5,000 a month of premium money may be used for the producer's personal needs.

c. All premiums received by a producer must be held in trust and cannot be used for personal matters.

When an automobile policy is canceled for any reason other than nonpayment of premium, the insurer must notify the named insured of her possible eligibility for A. insurance with the parent insurer B. insurance with the state financial responsibility fund C. insurance through the assigned risk plan D. insurance through the FAIR plan

c. Insurance through the assigned risk plan

Operating a motor vehicle that is not covered by a liability insurance policy as required by law is A. a Class A misdemeanor B. a Class B misdemeanor C. a Class C misdemeanor D. a Class A felony

c. class C misdemeanor

. The Alabama Insurance Guaranty Association applies to which of the following lines of insurance? A. Ocean marine B. Title C. Industrial fire D. All of the above

c. industrial fire

Which of the following statements about uninsured/underinsured motorist coverage is TRUE? A. It is not available in Alabama. B. It is required in Alabama. C. It is not required but will be automatically included unless the insured rejects it in writing. D. It will be included only if the insured specifically requests it in writing.

c. it is not required but will be automatically included unless the insured rejects it in writing

The Alabama Insurance Guaranty Association has the power to do each of the following EXCEPT A. enter into contracts B. borrow money C. solicit insurance to new members D. employ people

c. solicit insurance to new members

Which of the following statements regarding hearings is NOT correct? A. The Commissioner may hold a hearing whenever he deems it is necessary. B. Generally, a hearing must be held within 30 days after the Commissioner receives a written request. C. The Commissioner may issue an emergency order prohibiting a person from violating the Insurance Code without first holding a hearing. D. The Commissioner must give 30 days' notice before holding a hearing about unfair trade practices.

c.The Commissioner may issue an emergency order prohibiting a person from violating the Insurance Code without first holding a hearing.

A producer who intentionally misrepresents the terms of an insurance contract may be fined up to A. $500 per violation B. $3,000 per violation C. $5,000 per violation D. $10,000 per violation

d. $10,000 per violation

If an employee dies as a result of a work-related accident or occupational disease, the employer must pay burial expenses of up to A. $2,500 B. $3,000 C. $4,000 D. $6,500

d. $6,500

The workers' compensation laws are mandatory for employers who employ at least how many covered employees in any one business? A. 2 B. 3 C. 4 D. 5

d. 5

Which of the following is NOT an unfair claims settlement practice? A. Refusing to pay claims without cause B. Compelling an insured to accept less than the amount due C. Compelling insureds to employ attorneys to receive the amount due D. Replacing one insurance policy with another

d. Replacing one insurance policy with another

All of the following applicants are exempt from prelicensing EXCEPT A. an applicant with a college insurance degree B. an applicant for a limited lines license C. an applicant for a property insurance license who holds the CIC designation D. an applicant for a casualty insurance license who holds the CLU® designation

d. an applicant for casualty insurance licence who holds the CLU designation