NC Property & Casualty Exam Practice Questions

L was involved in an accident caused by B. L incurred injuries of $35,000 and property damage of $5,000. B had the NC minimum liability insurance required. Therefore L will receive a total of:

a. $85,000 b. $60,000 c. $40,000 d. $35,000

A licensee decides to terminate his residency in this state. Which of the following would be an appropriate action?

a. allowing the license to expire b. notifying the SEC c. notifying the commissioner within 10 days (D) delivering the license to the commissioner within 30 days

The commissioner of insurance gets into office by:

a. appointment by the governor b. 2/3 vote by the house of delegates c. election every 6 years (D) election every 4 years

If an insured changes his payment plan from monthly to annually, what happens to the total premium?

a. doubles b. increases c. decreases d. stays the same

As deductible amounts increase, premium amounts _______?

a. either increase or decrease (B) decrease c. increase d. remain the same

The period of time that a person must wait for workers comp benefits to begin after injury is the:

a. elimination period b. probationary period c. assumption period d. pre-existing period

Misrepresenting a policy to convince someone to replace it is called:

a. fudging b. defamation c. boycott d. twisting

Which of the following is NOT an essential element of an insurance contract?

a. legal purpose b. incompetent parties c. consideration d. agreement (offer & acceptance)

All of the following apply to the Safe Driver Incentive Plan EXCEPT:

a. newly licensed driver may be surcharged even without any violations b. a minor accident with property damage only usually will not result in a surcharge c. speeding violation of less than 10 miles over the limit (D) a conviction of failing to wear a seat belt will result in a surcharge for 3 years

When an insurance producer conducts business under any name other than the producers legal name, he or she must:

a. notify the appointing insurance company within 30 days of using the assumed name (B) notify the commissioner before using the assumed name c. notify the commissioner within 10 days of using the assumed name d. notify the commissioner within 30 days of using the assumed name

Giving the prospect anything of value as a condition of the sale is called:

a. rebating b. sound negotiating c. misrepresentation d. coercion

Which of the following would obtain a temporary license?

a. recent graduate of business school b. non-resident agent who recently moved to NC c. executor of estate resident agent d. per who recently passed agents exam

Which of the following is true about examination of agent records by the Bureau?

a. they may not be disclosed b/c of privacy concerns b. they may be disclosed at any time c. they may be disclosed only with a subpoena d. they may be disclosed after a 30 day "cooling off" period

The purpose of the reinstatement provision is:

a. to permit the insurer to terminate coverage at any time b. to specify the period of time following the premium due date for the policy owner to pay the premium (C) to determine the process for reactivating coverage once a policy has lapsed d. to allow the policy owner to continue coverage under the policy beyond the current policy year

G is on the way to the office to turn in an application that he completed. He suddenly discovers that the applicant made out the check to the agent, what should the agent do?

a. white out the agent name and change it to the company name b. send the check in and let the company issue an amendment c. immediately return the check to the applicant d. hold onto the check until the policy is issued

If an agent is found guilty of representing an unauthorized company, what will they be found guilty of if the agent did not know it was unauthorized?

(A) misdemeanor b. negligence c. a felony d. fruad

Which of the following types of risk will result in the highest premium?

(A) substandard risk b. standard risk c. preferred risk d. all risks pay equal amounts

An insurer becomes insolvent and Chris has had a $650,000 policy on his house with them. If Chris were to experience a loss, what is the most that would be paid by the Guarantee Association

a. $0 b. $300,000 c. $650,000 d. it depends on the contestability period

An agent in NC must report a change of residency within:

a. 10 days b. 15 days c. 20 days d. 30 days

As of 2010 if an agent has only one license, he must complete continuing ed. in the following manner:

a. 12 hours on an annual basis b. 12 hours on a biennial basis c. 24 hours on an annual basis d. 24 hours on a biennial basis

A major factor in determining insurance premiums is:

a. beneficiary designations b. assignment provisions c. expenses of the insurer d. expenses of the agent

An insurance agent may have their license suspended for all of the following EXCEPT:

a. commingling b. felony conviction c. rebating d. above average commissions

An agent license may be issued to which of the following?

a. corporation b. individual c. limited liability company d. all of the above

The dwelling form DP-3 automatically includes all of the following EXCEPT:

a. coverage A - dwelling b. coverage B - other structures at 10% c. coverage C - personal property at 50% d. coverage D - fair rental value at 10%

A third party administrator of a self-insured workers comp. plan does all of the following EXCEPT:

a. enroll the group members b. collect premiums from group members c. process claims of group members d. insure the group members

The commissioner of insurance can do all of the following EXCEPT:

a. examine insurers in person or through a representative b. suspend an agents license while an investigation is pending c. waive policy provisions in favor of an insured d. issue administrative orders to carry out the insurance laws

The period of time immediately following a disability during which benefits are not payable is called:

a. grace period b. residual period (C) elimination period d. probationary period

Before any action against an agent's license may be taken the agent must:

a. have an appointed attorney b. post a bond c. market conduct examination d. be given the opportunity to be heard

B failed to disclose a material fact on an insurance application, which of the following is correct?

a. he is guilty of misrepresentation (B) he is guilty of concealment c. he is guilty of coercion d. he is guilty of twisting

Which of the following is a statement that is guaranteed to be true, & if untrue may breach an insurance contract?

a. indemnity b. representation (C) warranty d. concealment

All of the following are true for resident NC agents EXCEPT:

a. maintain an office in NC b. pay taxes in NC c. at least 18 years of age d. pass the required exam

The disability provision that pays benefits for injuries 24/7 is:

a. occupational b. non-occupational c. both A & B d. workers compensation

NC requires motor vehicle operators to show financial responsibility in any of the following ways EXCEPT:

a. proof of coverage in the amounts of 30/60/25 b. proof of qualified self-insurance c. deposit of appropriate cash or securities at the DMV (D) post a bond of at least $100,000

All of the following could be considered unfair trade practices EXCEPT:

a. publishing false information about a competitors financial status b. promoting defamation of a competitors chief exec c. providing insurance at rates below those of a competitor d. distributing sales brochures that show dividends as guaranteed

All of the following could be considered unfair claim settlement practices EXCEPT:

a. requiring the insured to submit more than one claim form containing the same information b. sending settlement without explaining why it is less than the amount of the claim c. compelling insureds to sue for benefits that a reasonable person would have expected d. denying a claim after a proper investigation

The special significance of an insurability conditional receipt is that it:

a. serves as proof that the agent has determined the applicant to be fully insurable for coverage by the insurance company b. is given by the agent only to applicants who full prepay all scheduled premiums in advance of the policy (C) is intended to provide coverage on a date earlier than the date of the issuance of the policy d. guarantees the applicant that a policy will be issued in the amount applied for

The boiler and machinery coverage includes expediting expenses, it covers all of the following EXCEPT:

a. temporary repairs (B) temporary replacement c. permanent repairs d. permanent replacement

If an agent mixes client funds with his own, the first thing the Bureau will probably do is:

a. terminate his fiduciary duties b. issue a cease & desist order c. bring charges in small claims court d. fine the agent $1,000

An insurer is attempting to determine insurability of an applicant & decides to obtain information from different sources, which entity must be notified of the investigation?

a. the applicant b. commissioner of insurance c. medical examiner d. the ISO

An insurance institution, agent, or support organization shall not disclose any personal/privileged information about an individual that is collected or received in connection with an insurance transaction unless:

a. the commissioner deems such disclosure to be in the best interest of the insurance buying public b. the disclosure has been previously approved by the insurer (C) the disclosure is with the written authorization of the individual d. such information is considered to be non-public

Under contract law, the actions by a party may intentionally & voluntarily give up a known right. When this occurs, it's known as creating:

a. warranty b. representation c. waiver d. binding condition

Agent Z takes an application for a policy & accepts a check for the first premium. The application & check are mailed to the insurer, who discovers the check is not signed, when will coverage for this policy go into effect?

a. when the application & unsigned check are received by the insurer. b. the date of the postmark on the envelope that contained the application c. never; the policy will not be issued d. when the policy is issued, delivered & the premium is paid.