Missouri Law
Participation in the Missouri Automobile Insurance Plan is required for a)Drivers with certain motor vehicle violations.b)Specialty car owner/drivers.c)Auto liability insurers.d)Agencies marketing motor vehicle coverage.
)Auto liability insurers. All insurers in Missouri that write automobile liability insurance must subscribe and participate in the Missouri Automobile Insurance Plan (AIP). Drivers who are not able to obtain coverage in the general insurance market may be able to obtain coverage through AIP.
A binder is issued to an applicant, but it is never replaced by a policy because of information discovered about the applicant. What action must be taken on the part of the insurer? a)No action must be taken.b)The applicant must be provided a contact in the Medical Information Bureau.c)The insurer must provide a Binder Expiration Notice.d)A binder premium charge must be made.
A binder premium charge must be made. If a binder is issued, and not replaced by an insurance policy, a premium for the binder must be charged. The binder charge may not exceed the cost of a pro rata premium.
Which of the following would be considered an illegal inducement to purchase insurance? a)Listing the insurance companies the agency represents in a letterb)Inviting prospective clients to the grand opening of the producer's new officec)Confirming future dividends in a life insurance proposald)Mailing an agency brochure to a prospective client
Confirming future dividends in a life insurance proposal A participating life insurance policy may pay a portion of its net earnings to a policyholder, but dividends cannot be guaranteed.
An insurance company has published a brochure that inaccurately portrays the advantages of a particular insurance policy. What is this an example of? a)Twistingb)Defamationc)False advertisingd)Unfair claims
False advertising False advertising is the illegal practice of advertising or circulating materials that are untrue, deceptive, or misleading.
How many days do insurers have to acknowledge any claims made by first-party claimants? a)10b)30c)7d)90
a)10 Claims must be acknowledged - in some way - within 10 days. This can take the form of a written letter, a payment, or any appropriate assistance.
All of the following are true with regard to standard fire insurance policies being cancelled by an insurer EXCEPT a)The notice must state that a refund of unearned premiums will be made within 15 days of the notice.b)Thirty days advance notice must be given except for nonpayment of premium or evidence of arson by the insured when 10 days' notice is required.c)The written notice must state the reason for the action.d)The notice must contain contact information for the Missouri Property Insurance Placement Facility.
a)The notice must state that a refund of unearned premiums will be made within 15 days of the notice. The notice must state that a refund of unearned premiums will be made within 30 days of the notice.
How many days does a producer have to report to the Director any administrative action taken against the producer? a)15 daysb)30 daysc)45 daysd)10 days
b)30 days An insurance producer must report to the Director any administrative action taken against the producer in another jurisdiction or by another governmental agency in this state within 30 days of the final disposition of the matter.
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 a)Rebating.b)Misrepresentation.c)Concealment.d)Unfair claim practice.
b)Misrepresentation. Issuing or circulating any sales material that is false or misleading would be considered misrepresentation and is illegal.
An individual would like to be covered under the Missouri Basic Property Insurance and Placement Program. Before he can apply, the inspection bureau must examine his property. How soon after that inspection can he expect the bureau to file their report? a)30 daysb)Immediatelyc)Neverd)5 days
d)5 days The bureau will file its inspection report within 5 days of the initial examination.
The chief officer of the Department of Insurance is the Director. All the following statements concerning the Director are true EXCEPT a)The Director must be experienced in matters of insurance.b)The Director must be a citizen of the state of Missouri.c)The Director is appointed by the Governor.d)The Director may serve as an officer or director for an unauthorized insurer.
d)The Director may serve as an officer or director for an unauthorized insurer. The Director cannot have any interest, other than as a policyholder, in an insurance company while serving in office.
The insured failed to pay the premium on his property policy issued under the FAIR Plan. Before the insurer may cancel the policy, what needs to be done? a)The insurer must collect the premium.b)The Department of Insurance must be notified.c)The policy must be turned into collections.d)The insurer must send the notice of cancellation to the insured.
d)The insurer must send the notice of cancellation to the insured. Whenever an insurer cancels a policy, the notice of cancellation or nonrenewal, along with the reason for it, must be sent to the insured at least 30 days prior to the cancellation.
When workers compensation pays for permanent total disability, at what rate is the compensation paid? a)Monthlyb)Annuallyc)Biannuallyd)Weekly
d)Weekly Compensation for permanent total disability is paid on a weekly basis.
Which of the following licensees could be exempt from renewing their license biennially on the anniversary date of issuance? a)A producer who has not written any insurance business in Missouri in the past year.b)A producer who attains age 60.c)A producer whose appointment with an insurer has been revoked.d)A licensee called to active duty with the U.S. Armed forces.
A licensee called to active duty with the U.S. Armed forces. Licensees unable to comply with the renewal requirement due to military service are exempt from this requirement of the Insurance Code.
What is surplus lines insurance? a)Insurance placed with an unauthorized insurerb)Additional insurance placed on itemized risksc)Any insurance on items worth more than $25,000d)Insurance in excess of a standard policy's coverage
a)Insurance placed with an unauthorized insurer Insurance obtained from or placed with an unauthorized insurer is surplus lines insurance.
The Missouri Basic Property Insurance and Placement Program is available to a)All residential property risks up to $100,000 in value.b)Only those with commercial property risks unable to obtain coverage in the voluntary market.c)Any person in the state entitled to have but unable to obtain property coverage through the voluntary market, subject to program maximums.d)Any persons wishing to obtain property insurance in the state.
Any person in the state entitled to have but unable to obtain property coverage through the voluntary market, subject to program maximums. The Missouri Basic Property Insurance and Placement Program is available to persons having insurable property but unable to obtain coverage through the normal market.
The Director may suspend, revoke, refuse to renew an insurance producer license for any one or more of the following causes, EXCEPT a)Violating any insurance law or regulation.b)Improperly withholding or converting money received in the course of doing insurance business.c)Failing to comply with any administrative or court order directing payment of state or federal income tax.d)Failing to notify the Director of a change of address.
Failing to notify the Director of a change of address. The penalty for failure to notify the Director of a change of address within 30 days is a monetary penalty not to exceed $10 per month.
Which of the following best describes a misrepresentation? a)Discriminating among individuals of the same insuring classb)Issuing sales material with exaggerated statements about policy benefitsc)Making a deceptive or untrue statement about a person engaged in the insurance businessd)Making a maliciously critical statement that is intended to injure another person
Issuing sales material with exaggerated statements about policy benefits Misrepresentation is issuing, publishing or circulating any illustration or sales material that is false, misleading or deceptive as to policy benefits or terms, the payment of dividends, etc. This includes oral statements.
Which of the following is NOT true regarding a Certificate of Authority? a)It is equivalent to an insurance license.b)It is issued by the state department of insurance.c)It is issued to group insurance participants.d)It may be necessary for transacting business in a specific state.
It is issued to group insurance participants Before insurers may transact business in a specific state, they must apply for a license or Certificate of Authority from the state department of insurance and meet any financial (capital and surplus) requirements set down by the state.
When a property policy is cancelled under the Missouri Basic Property Insurance and Placement Program, the insurer must send the insured a notice of cancellation. Which of the following is FALSE regarding the notice? a)It must explain the reason for cancellation.b)It must be sent at least 15 days prior to the date of cancellation.c)It must state the insured's right to appeal.d)A copy of the notice must be retained by the insurer.
It must be sent at least 15 days prior to the date of cancellation. Any notice of cancellation or nonrenewal, along with the reason for it, must be sent to the insured at least 30 days prior to the cancellation. A copy of the notice will be retained by the facility. The notice must also explain the procedures for obtaining an inspection under the program, and state the insured's right to appeal.
What is the name of a program under the FAIR Plan in Missouri? a)Missouri Basic Property Insurance and Placement Programb)Missouri Insurance Guaranty Associationc)Missouri FAIR Programd)Missouri Joint Underwriting Association
Missouri Basic Property Insurance and Placement Program In Missouri, the program is called Missouri Basic Property Insurance and Placement Program. The program is designed to provide for the equitable distribution and placement of risks among all insurers.
A binder became effective on October 1, and the replacing policy was issued on November 15th. What is the first day of the policy coverage? a)October 1b)November 1c)November 15d)December 1
October 1 Any policy that replaces a binder must provide coverage beginning on the date the binder became effective.
All of the following are true regarding rebates EXCEPT a)Rebates are allowed if it's in the best interest of the client.b)Rebates are only allowed if specifically stated in the policy.c)Rebating can be anything of economic value, given as an inducement to buy.d)Dividends are not considered to be rebates.
Rebates are allowed if it's in the best interest of the client. A rebate is an illegal act which involves returning something of value to the client as an inducement to buy, such as the commission. Rebates are only allowed if specifically stated in the policy. Insurance dividends are not considered rebates as the IRS considers it as a return of overpaid premium.
Which of the following is an example of a producer being involved in an unfair trade practice of rebating? a)Making deceptive statements about a competitorb)Telling a client that his first premium will be waived if he purchases the insurance policy todayc)Inducing the insured to drop a policy in favor of another one when it is not in the insured's best interestd)Charging a client a higher premium for the same policy as another client in the same insuring class
Telling a client that his first premium will be waived if he purchases the insurance policy today Rebating is defined as offering any inducement in the sale of insurance products that is not specified in the policy, including money, reductions in commissions, promises, and personal services. Both the offer and acceptance of a rebate are illegal.
All of the following must be stated on the notice regarding employees' rights related to workers' compensation claims EXCEPT a)The Division of Workers' Compensation will provide information upon request.b)The employer is operating under Missouri Workers' Compensation Laws.c)All injuries must be reported immediately.d)Fraudulent actions by employees and employers are unlawful.
The Division of Workers' Compensation will provide information upon request. It is required that all employers post a notice of the employees' rights related to workers' compensation claims. Among other things, the notice must include the following: notice that the employer is operating under Missouri Workers' Compensation Law; that employees must report all injuries immediately; and fraudulent actions by employees and employers are unlawful.
An uninsured driver had his license suspended. For how long after license reinstatement will the insured have to file proof of reinstatement? a)3 yearsb)1 yearc)5 yearsd)10 years
a)3 years Under these circumstances, the driver will have to file proof of insurance for the next 3 years.
If the Director receives a report of a motor vehicle accident causing at least $500 in damage, how many days does he or she have to take action against the guilty driver? a)90 daysb)120 daysc)30 daysd)60 days
a)90 days The Director has 90 days to take action against such a driver.
Which statement below is FALSE about binders that insurance producers may issue? a)The limits provided by the binder are for 75% of the coverage requested in the application.b)The binder provides temporary coverage for a limited amount of time.c)If a policy is not issued within 60 days, the binder expires.d)If a policy is issued it replaces the binder.
The limits provided by the binder are for 75% of the coverage requested in the application. The binder is a temporary contract of insurance providing coverages and limits requested in the application. It expires 60 days after issue or when replaced by a policy.
Which of the following is NOT among the lines of authority for which an insurance producer may qualify in the state of Missouri? a)Group health insuranceb)Surplus linesc)Variable life and annuitiesd)Personal lines
a)Group health insurance A producer may become licensed in accident and health or sickness insurance; there is no license specific to group insurance.
When a Transportation Network Company arranges a ride for a customer, which of the following vehicles would be used? a)A company vehicleb)A driver's own vehiclec)A taxid)A limousine
b)A driver's own vehicle A prearranged ride does not include the use of a taxi, a limousine or a vanpool van for transportation.
All of the following statements regarding uninsured & underinsured motorist coverage, in the state of Missouri, are true EXCEPT a)An uninsured motorist is defined as an unidentified hit-and-run driver.b)An insured motorist is defined as a motorist with auto liability coverage at least with legally required minimums, but too low to pay for all the damage done to the other vehicle.c)No automobile liability insurance can be issued in the state unless it also provides coverage for uninsured/underinsured motorists.d)The uninsured & underinsured coverage maybe provided by the policy itself, or by a supplemental endorsement.
b)An insured motorist is defined as a motorist with auto liability coverage at least with legally required minimums, but too low to pay for all the damage done to the other vehicle. By definition an underinsured motorist is one with auto liability coverage at least with the legally required minimums, but too low to pay for all the damage done to another.
Whenever it appears that a producer or an insurer is violating an insurance law of Missouri, the Director will do which of the following? a)Report the person to the Governorb)Issue a cease and desist orderc)Levy a monetary fined)Have the person arrested
b)Issue a cease and desist order Whenever it appears that any person is violating an insurance law, the Director can issue a cease and desist order and schedule a hearing into the matter
All of the following could be considered rebates if offered to an insured in the sale of insurance EXCEPT a)An offer of employment.b)Stocks, securities, or bonds.c)An offer to share in commissions generated by the sale.d)Dividends from a mutual insurer.
d)Dividends from a mutual insurer. Dividends paid to policyholders of a mutual insurer are not considered to be a rebate because the policy specifies that they might be paid.
An insurer sends Form 26 to the Missouri Department of Motor Vehicles for a motor vehicle owner. Which of the following is likely? a)The owner receives Missouri Automobile Insurance Plan coverage.b)The owner's driver's license may be suspended.c)The owner's vehicle registration will be cancelled.d)The owner's automobile policy rates will be lowere
b)The owner's driver's license may be suspended. In Missouri, Form 26 is used to notify the Department when a high-risk driver's automobile insurance policy is cancelled. The Department may suspend the driver's license, pending receipt of Form 22 that proves insurance coverage.
According to the transportation network company regulations, while drivers are logged into the digital network and engaging in a prearranged ride, the driver's primary automobile insurance coverage must be in the amount of at least a)$100,000.b)$175,000.c)$1,000,000.d)$3,000,000.
c)$1,000,000. While a driver is logged into the digital network and engaged in a prearranged ride, the minimum required automobile liability policy coverage is $1,000,000 for death, bodily injury, and property damage.
After a work-related injury, a worker's injuries result in permanent total disability. The worker's pre-injury wages averaged $1,000 per week. If the amount does not exceed the state's average weekly earnings, which of the following amounts would be paid to the worker weekly by the workers compensation insurance? a)$339b)$500c)$667d)$1,000
c)$667 Workers who have a permanent total disability receive a weekly check equal to 66 2/3% of their average pre-injury wages for the previous 12 months. The total payment must not exceed 105% of the state's average weekly wages. In this case, $1,000 X .667 equals $667, which will continue for the worker's lifetime.
How can inland marine coverage be written in this state? a)As a combination policy with dwellingb)As a single-peril policyc)As a combination policy with fire casualtyd)Only as a stand-alone policy
c)As a combination policy with fire casualty Inland marine coverage may be combined with fire casualty, fidelity and surety coverages as a combination policy, as long as the insurer is properly licensed for all the multiple lines, and the package has been approved by the Department of Insurance.
In insurance, producers are permitted to share or split commissions if a)The insurance department knows of the arrangement.b)There is a written agreement between the agents.c)Both are properly licensed for the line of insurance.d)The insured knows and agrees to the arrangement.
c)Both are properly licensed for the line of insurance. For a producer to receive commissions from the sale of insurance, they must be properly licensed for that line of insurance.
All of the following would be considered rebating EXCEPT a)An agent offers the use of his lake house to a client as an inducement to buy an insurance policy from him.b)An agent offers to share his commission with a policyholder.c)An agent offers tickets to a baseball game as an inducement to buy insurance.d)An agent misrepresents policy benefits to convince a policyowner to replace policies.
d)An agent misrepresents policy benefits to convince a policyowner to replace policies. Rebating occurs when an insured is offered something of value in order to induce the sale of an insurance product. Both the offer and acceptance of a rebate are illegal.
Which of the following will NOT be considered unfair discrimination by insurers? a)Cancelling individual coverage based on the insured's marital statusb)Assigning different risk classifications to applicants based on gender identityc)Discriminating in benefits and coverages based on the insured's habits and lifestyled)Charging applicants with similar health histories different premiums based on their ethnicity
c)Discriminating in benefits and coverages based on the insured's habits and lifestyle Discriminating between individuals of the same class with equal life expectancies, or by reason of race, nationality, or ethnic group would be considered unfair discrimination. Insurers are also not allowed to cancel individual coverage due to a change in marital status. Discriminating in benefits based on the insured's habits and lifestyle (such as smoking or dangerous hobbies) is acceptable.
Which of the following entities is responsible for assisting applicants in securing basic property insurance and issuing policies under the Missouri Basic Property Insurance and Placement Program? a)The program itselfb)The Department of Insurancec)The All-industry Placement Facilityd)The Inspection Bureau
c)The All-industry Placement Facility The term "facility" refers to the All-industry Placement Facility - the organization formed by insurers to assist applicants in securing basic property insurance, to issue policies and to administer the program.
Who is responsible for covering the expenses associated with the examination of domestic insurers? a)The Department of Insuranceb)The Insurance Guaranty Associationc)The examined insurerd)The Director
c)The examined insurer All reasonable expenses and charges associated with the examination must be paid by the examined insurer.
The insured failed to pay the premium on his property policy issued under the FAIR Plan. Before the insurer may cancel the policy, what needs to be done? a)The Department of Insurance must be notified.b)The policy must be turned into collections.c)The insurer must send the notice of cancellation to the insured.d)The insurer must collect the premium.
c)The insurer must send the notice of cancellation to the insured. Whenever an insurer cancels a policy, the notice of cancellation or nonrenewal, along with the reason for it, must be sent to the insured at least 30 days prior to the cancellation.
Homeowners policies with terms of less than 6 months will be considered as though they were written for terms of a)3 months.b)12 months.c)9 months.d)6 months.
d)6 months. Because this hypothetical policy period is less than 6 months, it will be considered as though it were written for a term of 6 months.
A producer has submitted a new application to his insurer; however, 30 days later there was still no coverage available for the applicant. What must the producer do? a)Nothing: producer has no further obligations once the application is submitted to the insurer.b)Submit a complaint to the Department of Insurancec)Submit a request for coverage to the insurerd)Inform the applicant in writing
d)Inform the applicant in writing Producers must ensure that each applicant for new policy receives coverage as soon as reasonably possible. If the insurer does not provide coverage within 30 days of the application, the producer must inform the prospective insured of this fact in writing.
An employee was injured on the job and has been out of commission for the past three months. If he last received a workers' compensation claims check on June 5th, what is the latest day that he could receive his next check? a)July 1stb)June 12thc)June 15thd)June 19th
d)June 19th Compensation will be payable as the wages were paid prior to the injury, but in any event at least once every 2 weeks.
If a material misrepresentation is discovered in a policy issued under the Missouri Basic Property Insurance and Placement Program, the policy a)Will still remain in effect. FAIR Plan prohibits cancellation of policies.b)May be cancelled only with the approval of the governing committee.c)Will be rated up.d)May be cancelled.
d)May be cancelled. The facility may not cancel a policy or binder issued under the Missouri Basic Property Insurance and Placement Program without the approval of the governing committee unless it's for arson committed by or at the direction of the insured, nonpayment of premium, or fraud or material misrepresentation of the insured.
What must an insurance company that is organized in, and has its home office in Missouri, do in order to legally transact insurance in the state? a)Receive approval from the state legislatureb)Nothing, they automatically qualify to transact insurance in the state.c)Obtain approval from the National Association of Insurance Companiesd)Receive a Certificate of Authority from the Director
d)Receive a Certificate of Authority from the Director By definition an underinsured motorist is one with auto liability coverage at least with the legally required minimums, but too low to pay for all the damage done to another.
Paul is a producer in Kansas and wants to become a producer in Missouri. The Department will waive certain examination requirements, provided that Kansas would waive these same requirements if a Missouri producer sought licensure in Kansas. What term is used to describe this phenomenon? a)Equalityb)Fair exchangec)Equanimityd)Reciprocity
d)Reciprocity "Reciprocity" occurs when the state in which the person resides accords the same privilege to residents of Missouri.