NJ EXAM QUESTIONS
Which of the following statements is false regarding cancellation for nonpayment of premium?
A-The insurer must mail notice of cancellation at least 10 days prior to cancellation B-The insured may file a written complaint with the New Jersey Department C-The notice must inform the insured that the policy will not be cancelled if payment is made before the cancellation date D-The insured may not file a written complaint with the New Jersey Department B- The insured may not file a written complaint with the New Jersey Department when the policy is cancelled for nonpayment of premium.
Which statement is false about service fee requirements?
A- A fee may not be charged for completing an accident form B-A fee must bear a reasonable relationship to the service C-2 service fees may be charged per year D-No service fee for any one policy may exceed $20 C- Under the Insurance Producer Standards of Conduct for commissions and fees, only one service fee up to $20 may be charged per year.
The respective minimum limits of liability under Uninsured and Underinsured Motorist must be at least:
A-$100,000, $250,000, $500,000 B-$100,000, $500,000, $250,000 C-$250,000, $500,000, $100,000 D-$500,000, $250,000. $100,000 C- The minimum limits of liability are $250,000 per person, $500,000 per accident, and $100,000 for property damage.
Which of the following is NOT considered a special risk?
A-Medical malpractice B-Inland marine C-Surety bonds D-Fidelity bonds A- Medical malpractice insurance is not considered a special risk.
A nonresident producer or nonresident business entity will not qualify for a nonresident license if the producer:
A-Provides a copy of the home state application for licensing B-Is currently licensed as a resident producer in good standing in the home state C-Lives in a non-reciprocity state D-Pays a fee C- In order to be a nonresident producer or business entity in New Jersey, the person's home state must award nonresident insurance producer licenses to New Jersey residents on the same basis.
When is the Notice of Information Practices required to be provided?
A-Upon policy delivery B-At the time of application C-Upon policy renewal D-Annually A- The Notice of Information Practices is required to be provided at the time of policy delivery or any time personal information is collected. It is required at policy renewal or reinstatement.
An agency appointment will terminate:
A-When the insurer notifies the NAIC B-On the 60th day after the insurer fails to deliver a contract to the producer C-When the insurer notifies the Commissioner within 15 days of the appointment termination date D-When the insurer receives the producer's underwriting guidelines and other marketing materials C- When an agency contract is cancelled, within 15 days the insurer must notify the Commissioner of the cancellation date and the reason for cancellation.
How many categories of fraud are described under the New Jersey Insurance Fraud Prevention Act?
A- 2 B-4 C-8 D-6 C- The New Jersey Insurance Fraud Prevention Act describes 8 categories of fraud.
Which of the following penalties may be imposed by the Commissioner for a violation or deceptive act or practice?
A- A penalty of up to $2,000 per violation, and up to $5,000 if the violation or act should have been known B-A penalty of up to $5,000 per violation, and up to $10,000 if the violation or act should have been known C-A penalty of up to $1,000 per violation, and up to $5,000 if the violation or act should have been known D-A penalty of up to $5,000 per violation, and up to $10,000 if the violation or act should have been known, and the costs of investigation and prosecution as well as possible restitution C- The Commissioner may impose a penalty of up to $1,000 per violation, and up to $5,000 if the violation or act should have been known, plus the costs of investigation and prosecution as well as possible restitution. For a subsequent violation, the penalty is up to $10,000.
A commercial fleet is a risk with __________ vehicles.
A-5 or more B-Commercial and semi-trailer C-More than 2 D-8 or more A- A risk with 5 or more vehicles, except trailers and semi-trailers, is considered a fleet.
Which of the following is not considered insurance-related conduct?
A-Collecting premiums B-Binding a policy C-Processing claims D-Underwriting an insurance application D- Selling, soliciting, and negotiating insurance policies, communicating with insureds regarding policy terms and conditions, and office management affecting insureds are other examples of insurance-related conduct.
State insurance laws are passed by which of the following?
A-Insurance companies B-Commissioner of Insurance C-Majority vote of NAIC D-State legislature D- The state legislature debates and passes state laws.
Which of the following lines is subject to the Commercial Insurance Deregulation Act of 1982?
A-Personal lines B-Commercial liability C-Ocean marine D-Workers' Compensation and employers' liability insurance B- Personal lines are not subject to the Act. Workers' Compensation and Ocean Marine are exempt from the Act.
Interpreting statutes is required in which of the following circumstances?
A-The insurer's attorney requires it in all litigation B-A statute is debated in the state legislature C-The meaning of a statute is vague D-A statute has been repealed C- Interpretations of Statutes is required when a case before the court involves a state statute that does not have a clear meaning or is vague or ambiguous.
Which of the following is false about uninsured motorist coverage?
A-The limits must be for $500,000 combined single limit, or 250/500/100 split limits B-Rates for UM coverage cannot be based on the insured's territory C-Stacking of limits is acceptable D-It is optional for the insured, but must be offered by the insurer C- It is prohibited to stack uninsured and underinsured motorist coverage limits for multiple autos insured under the same policy.
Which of the following is NOT an unfair claims practice?
A- Refusing to pay a claim without investigating it B-Failing to affirm or deny coverage of claims within a reasonable time after proof of loss C-Promptly acknowledging communications pertinent to a claim D-Misrepresenting pertinent policy facts or provisions to claimants C- Promptly acknowledging communications pertinent to a claim is required with respect to claim practices. The other answers are unfair trade practices.
Insurers must maintain nonrenewal records for at least how many years?
A-3 B-10 C-5 D-7 C- Insurance companies must maintain records of nonrenewals for not less than 5 years including a copy of the notice of nonrenewal, data concerning the allowable number of nonrenewals in each territory, and data concerning the actual number of newly insured automobiles and nonrenewals in each territory for each category.
A temporary work authority is granted and valid up to ________ days after being issued.
A-30 B-60 C-90 D-45 B- The Commissioner is authorized to issue a temporary work authority, valid up to 60 days, allowing the applicant to begin work the proper form has been submitted and there is no information that may disqualify the applicant from being licensed.
A first-time applicant for bail bond authority must complete:
A-6 classroom hours on ethics B-A total of 26 classroom hours on regulation of the insurance industry C-10 classroom hours on regulation of the insurance industry D-6 classroom hours on regulation of the insurance industry D- A first-time applicant for bail bond authority must complete 6 classroom hours on regulation of the insurance industry.
A producer's license that has been suspended may be reinstated:
A-After one year B-On what would have been the next renewal date C-After 5 years D-After submitting a completed application and required affidavit D- A producer's license that has been suspended may be reinstated after submitting a completed application and required affidavit. A license that has been revoked may be reinstated after 5 years
Failure of a producer to respond to a notice of an administrative penalty will not result in which of the following actions?
A-An automatic hearing is scheduled B-The producer agrees with the allegations C-A final order will be sent D-License suspension A- Under the Insurance Producer Standards of Conduct for administrative procedures, a hearing may be requested when the producer responds to the notice of an administrative penalty.
A bank or credit union will not give a loan unless the borrower buys insurance from a specific company. This is known as ____________.
A-Churning B-Rebating C-Coercion D-Misrepresentation C- It is an unfair trade practice to enter into any agreement to commit, any act of boycott, coercion, or intimidation resulting in an unreasonable restraint of, or monopoly in, the business of insurance.
The burden of proof to establish willful negligence of the injured employee will be upon:
A-Employer B-Employee C-Insurer D-Fellow employee A- In all actions at law, the burden of proof to establish willful negligence of the injured employee will be upon the defendant/employer.
Which of the following is not a power of the Commissioner of Insurance?
A-Formulate the insurance laws for New Jersey B-Determine all matters of policy C-Examine a licensee under oath D-Adopt regulations for insurance companies A- Insurance laws are created by the state legislature and signed into law by the Governor.
Which of the following is NOT a qualification required for a producer license?
A-Have not committed any act that is a ground for denial, suspension or revocation B-Pay the appropriate fee C-Pass a licensing examination for each line of insurance to be transacted D-Be at least 21 years of age D- An individual must be at least 18 years of age.
An applicant who cannot obtain automobile insurance in the voluntary market is qualified for the Commercial Automobile Insurance Plan if his/her automobile:
A-Is registered in NJ, or will be within 60 days B-Is valued no more than $100,000 C-Is part of an uninsured fleet D-Has been in 3 accidents in the past 3 years A- A qualified applicant for CAIP is the owner or registrant of a motor vehicle registered in New Jersey or to be registered within 60 days, who is unable to obtain automobile insurance in New Jersey in the voluntary market in the previous 60 days.
Which of the following is a false about uninsured motorist coverage?
A-It is optional for the insured, but must be offered by the insurer B-Rates for UM coverage cannot be based on the insured's territory C-Stacking of limits is acceptable D-The limits must be for $500,000 combined limit or 250/500/100 split limits C- It is prohibited to stack uninsured and underinsured motorist coverage limits for multiple autos insured under the same policy.
Net participation percentage is used to determine:
A-Key component in the annual audit by the Commissioner B-Complaint ratio of CAIP insureds by insurer C-Number of vehicles insured in the CAIP D-Profit or loss relative to all participants D- Net participation percentage means a participant's net participation for that policy year in proportion to the comparable statewide total net participation for all participants in the Commercial Automobile Insurance Plan.
An insurance producer may not become licensed in which of the following lines of authority?
A-Limited lines B-Title C-Funeral D-Variable annuity C- Other acceptable lines of authority are insurance for life, accident and health, variable life, property and casualty, personal lines, surplus lines, and any additional authority as approved by the Commissioner.
It is not in the public interest for The Fair Act to:
A-Mandate an auto policy to be the primary source for paying medical costs from auto accidents B-Continue merit rating surcharges C-Allow automobile insurers to make an adequate profit D-Charge temporary assessments for practicing certain professions A- The Fair Automobile Insurance Reform Act of 1990 provided a healthy and competitive automobile insurance system where insurers are entitled to earn a profit, and offer the option to make a person's health insurance the primary source for payment of medical costs from auto accidents.
If a producer attempts to sell insurance by urging the person to apply for insurance with a specific insurance company, and is called _________ insurance.
A-Negotiating B-Soliciting C-Finalizing D-Selling B- Selling is to exchange the policy for the applicant's money on behalf of the insurer, and negotiating is discussing the substantive benefits, terms, or conditions of a policy as long as the applicant is in the process of purchasing the policy.
Which of the following statements is NOT correct concerning prohibited practices?
A-No person may discriminate against anyone who engages in foreign travel through the rates, terms, or conditions of a policy B-No person may discriminate on the basis of genetic information, the refusal to submit to a genetic test or make available the results of a genetic test C-An insurer may invest in the capital stock of another insurer D-No person may be a director of two or more competing insurers C- An insurer may not invest in of the capital stock of another insurer.
A policy may not be nonrenewed or cancelled unless written notice has been delivered to the insured:
A-Not less than 120 days prior to expiration or cancellation B- Not less than 120 days or more than 30 days prior to expiration or cancellation C- Not more than 30 days prior to expiration or cancellation D-Not less than 30 days or more than 120 days prior to expiration or cancellation D- A policy may not be nonrenewed or cancelled unless written notice has been delivered to the insured not less than 30 days or more than 120 days prior to expiration or cancellation.
$250,000 Personal Injury Protection coverage is available for medical expense benefits in the Basic Auto Insurance Policy for all but which of the following?
A-Permanent injury at an acute care hospital B-Cuts and bruises C-Spinal cord injury D-Disfigurement B- This PIP medical expense benefit also covers a permanent or significant brain injury or treatment of a significant injury at a trauma center.
Which of the following is true with regard to requirements for filing rates and policy forms?
A-Rates must be filed at least 30 days before use and policy forms must be filed at least 30 days prior to becoming effective B-Rates must be filed within 30 days after use and policy forms must be filed within 30 days after becoming effective C-Rates must be filed within 30 days after use and policy forms must be filed at least 30 days prior to becoming effective D-Rates must be filed at least 30 days before use and policy forms must be filed within 30 days after becoming effective A- Rates must be filed at least 30 days before use and policy forms must be filed at least 30 days prior to becoming effective.
Which of the following is NOT considered as rebating?
A-Readjusting premium rates for a group insurance policy based on the loss or expense experience B-Providing a premium discount not specified in the policy C-Providing a premium discount at the time of renewal that is not specified in the policy D-Promising stock options as an inducement to purchase a policy A- Readjusting premium rates for a group insurance policy based on the loss or expense experience is allowed and is not considered as rebating.
A transfer of risk from one reinsurer to another reinsurer is known as:
A-Retrocession B-Certificate of Authority C-1035 Exchange D-Insurance-Related Conduct A- Retrocession is the transfer of risk from one reinsurer to another reinsurer.
Which Workers' Compensation rating plan applies rating factors to characteristics that reflect potential hazards?
A-Statistical B-Experience C-Schedule D-Retrospective C- Credits or debits based on risk characteristics, such as safety programs, maintenance, operation, medical facilities, and cooperation with carrier, will affect the premium by plus (debits) or minus (credits).
The Compensation Rating and Inspection Bureau (CRIB) does not have the authority to:
A-Sue or be sued regarding recovery of assessments B-Approve classification system or risks and premiums C-Prepare policy forms D-Establish rules for member assessment B- CRIB has the authority to prepare and file any amendments to its policy forms and systems of classification of risks and premium, but all such amendments must be approved by the Commissioner for the use by all of CRIB members.
If an insurer offers more than one rate under the Basic Auto Insurance Policy, which of the following rates would not be included?
A-Surplus B-Standard C-Non-standard D-Preferred A- Surplus rates are provided by unapproved insurers for classes of business for which there is no reasonable or adequate market of authorized insurers.
The notice of the hearing to review the Exportable List is not sent to which of the following?
A-Surplus lines agents B-Authorized insurers C-Anyone who previously requested it D-All surplus lines insurers D- Notice of the hearing must be sent at least 30 days' prior to the hearing to all surplus lines agents, eligible surplus lines insurers, authorized insurers and others who have previously requested receipt of such information.
A surplus lines agent has the authority to place insurance coverages on behalf of:
A-Surplus lines insurers B-Commercial lines insurers C-Authorized insurers D-Any Foreign or Alien insurer A- A surplus lines agent has the authority to place insurance coverages on behalf of surplus lines insurers.
Which of the following statements correctly describes requirements for record keeping by producers?
A-Entries to books and records must be made at least once every 5 years B-Each producer must maintain accurate books and records reflecting all insurance-related transactions C-Books and records must be maintained for a period of 30 days after the termination of coverage D-Books and records may be maintained in hard-copy and not electronically B- Books and records must be maintained for a period of 5 years after the termination of coverage. Entries to books and records must be made at least once every 30 days. Books and records may be maintained electronically if they can be reproduced in hard-copy.
If a licensed producer hires another producer to write insurance business on behalf of the employer/producer, the employer will not do which of the following?
A-Examine the employee's credentials B-Sign a contract of employment C-Transfer the insurance-related conduct of the employee to the employer's manager D-Supervises the employee C- A producer employing another producer does not create any responsibility for the acts of the other in the absence of knowledge or concerted action.
Filing changes to coastal and hurricane property risks would not apply to which of the following?
A-FAIR Plan B-Licensed property producer C-Rating organization D-Authorized property insurer B- The change process for filing rates, policy language to be used with respect to hurricane deductibles, and information included in notices to insureds concerns the property insurer who will then communicate necessary information to the licensed property producers.
Charging different rates or providing different benefits to insureds of the same actuarial class or hazard category is which of the following?
A-False statements B-Defamation C-Sliding D-Unfair discrimination D- Unfair discrimination is charging different rates/premiums, using different forms, imposing different limitations, or paying different levels of benefits to individuals of the same class and equal life expectancy, the same hazard class, based on race, creed, color, national origin or ancestry, or for auto insurance, for issuance age.
The Supreme Court in which case reversed an earlier court decision by ruling that insurance was subject to federal regulations?
A-Ferguson vs. NAIC B-McCarran-Ferguson Act C-U.S. vs. South-Eastern Underwriters Association D-Paul vs. Virginia C- In the U.S. vs. South-Eastern Underwriters Association the Supreme Court reversed Paul vs. Virginia and ruled that insurance was interstate commerce and when conducted across state lines, subject to federal regulations.
An applicant is qualified to insure under the Commercial Automobile Insurance Plan if his/her automobile:
A-Has been in 3 accidents in the past 3 years B-Is valued no more than $100,000 C-Is registered in NJ, or will be within 60 days D-Is part of an uninsured fleet C- A qualified applicant for CAIP is the owner or registrant of a motor vehicle registered in New Jersey or to be registered within 60 days, who is unable to obtain automobile insurance in New Jersey in the voluntary market in the previous 60 days.
Fraud Prevention and Detection Plans are established and maintained by:
A-Health insurers B-The Department C-The Insurance Fraud Prosecutor D-The Bureau of Fraud Deterrence A- Fraud Prevention and Detection Plans are established and maintained by health insurers.
What is the effect of Court actions on insurance laws?
A-Insurance laws must be created or repealed B-The court will provide guidance to the Department of Insurance C-Laws are passed based on insurance company lobby recommendations D-Commissioner must approve legislative changes to insurance laws A- Once a law is passed, insurance companies must create or revise policy forms to adhere to new insurance laws.
Which of the following lines of authority require a total of 10 course hours?
A-Limited lines B-Personal lines C-Title insurance D-Bail bonds D- Bail bonds authority requires a total of 10 course hours, whereas these other lines require a total of 20 course hours.
How frequently is the Exportable List reviewed?
A-Quarterly B-Semi-annually C-Biennially D-Annually D- The Commissioner holds an annual hearing to review and determine what will be included on the Exportable List.
Which of the following statements is NOT correct with regard to maintenance and duration of a license?
A-If a license has lapsed for less than one year, the applicant may apply for late renewal and pay a late renewal fee to be exempt from the prelicensing education and examination requirement B-Any producer who writes flood insurance must complete a 3-credit hour course related to flood insurance C-Licenses will not be renewed unless the licensee has completed 12 credit hours of continuing education, including 3 hours in ethics D-Licensees must inform the Commissioner of a change of address within 30 days of the change C- Licenses will not be renewed unless the licensee has completed 24 credit hours of continuing education.
When acting as an __________, this person represents the insurance applicant in negotiating an insurance contract.
A-Insurance Broker B-Insurance Sales Manager C-Insurance Agent D-Insurance Consultant A- An Insurance Broker is an insurance producer who, for a commission, brokerage fee, or other consideration represents the insured or prospective insured in buying insurance and places that insurance with an insurance company the Broker does not represent as an agent.
Which of the following statements is false?
A-Insurer agreements and rate modifications require the Commissioner's prior approval B-A producer may not apply for approval of a higher rate C-Insurers may agree on how to equitably proportion insurance coverage to those who are unable to procure insurance through ordinary methods D-An insurer may apply for approval of a higher rate for a particular risk provided the applicant has consented to the higher rate B- An insurer or producer may apply for approval of a higher rate for a particular risk provided the applicant has consented to the higher rate.
Which of the following statements is false regarding PIP coverage?
A- Essential services are performed not for income, but for the care and maintenance of an individual's family or family household B-Every standard auto liability policy must provide PIP benefits without regard to fault C-Economic loss' does not include medical expenses D-Medical expenses include any nonmedical remedial treatment rendered in accordance with a recognized religious method of healing C- 'Economic loss' does include medical expenses, as well as loss of income or property, or other uncompensated expenses.
Which court case ruled that federal antitrust laws only apply in certain circumstances?
A- Ferguson vs. NAIC B-Paul vs. Virginia C-U.S. vs. South-Eastern Underwriters Association DMcCarran-Ferguson Act D- The McCarran-Ferguson Act of 1945 ruled that federal antitrust laws apply to the extent that state law does not regulate insurance.
Which of the following statements is true?
A- A policy that has been in effect for more than 60 days may be cancelled or nonrenewed for any underwriting reason without prior notice B-An insurer must provide notice of cancellation or nonrenewal if the insured has replaced coverage elsewhere C-Except under certain conditions, a policy covering an owner-occupied 1-to-4 family dwelling may not be cancelled or nonrenewed solely due to claims due to weather-related damage D-An insurer must provide notice of cancellation or nonrenewal if the insured has requested termination C- An insurer is not required to provide notice if the insured has replaced coverage elsewhere or has otherwise specifically requested termination. A policy that has been in effect for less than 60 days may be cancelled or nonrenewed for any underwriting reason without prior notice.
Which of the following statements is true?
A- A pretext interview is a preliminary fact finding process prior to a needs analysis B-A producer is prohibited from releasing information regarding the reason for an adverse underwriting decision to an applicant or insured C-No producer may prepare an investigative consumer report without informing the individual who is the subject of such investigation D-A producer is allowed to use a pretext interview if he/she believes a prospect has a substantial need of insurance C- A producer is not allowed to use a pretext interview. A producer is required to provide an applicant or insured the reason for an adverse underwriting decision. A pretext interview is an interview conducted under false pretenses.
Which of the following statements correctly describes requirements for service fees?
A- A producer may charge a service fee for services in the sale or service of life or health insurance B-There is no limit as to the amount of annual service fees that may be charged C-No service fee for any one policy may exceed $15 D-A maximum service fee of $15 may be charged for a producer acting as a broker or consultant upon placement of a renewal D- A producer may not charge a service fee for services in the sale or service of life or health insurance. A service fee for any one policy may not exceed $20. Only one service fee may be charged per year.
Which of the following statements is false regarding commissions and fees?
A- A producer may pay a commission to an unlicensed individual, provided the person was licensed when the service was performeR B-Before a producer can charge a fee, the producer must obtain the insured's signed agreement C- A producer may assign commissions or fees to persons who do not sell, solicit or negotiate insurance D- A producer may return up to 25% of his/her commissions to the policyholder
Which of the following statements is false regarding commissions and fees?
A- A producer may pay a commission to an unlicensed individual, provided the person was licensed when the service was performed B-Before a producer can charge a fee, the producer must obtain the insured's signed agreement C-A producer may assign commissions or fees to persons who do not sell, solicit or negotiate insurance D-A producer may return up to 25% of his/her commissions to the policyholder D- A producer may not return any amount of his/her commissions to the policyholder.
What is required before a risk may be submitted to a surplus lines agent?
A- A producer must try to place the risk with 3 unauthorized insurers B-A producer must try to place the risk with 3 foreign or alien insurers C-A producer must try to place the risk with one authorized insurer D-A producer must try to place the risk with 3 authorized insurers D- Prior to submitting a risk to a surplus lines agent, a producer must try to place the risk with 3 authorized insurers.
Which of the following is false about NJIUA coverage?
A- All licensed agents in New Jersey can place business with the NJIUA B-NJIUA does not recognize producer ownership related to renewal policies C-The producer cannot assign any loss on behalf of the association D-The producer can bind the association to coverage within acceptable limits D- The association has no agents and the producer cannot bind the association to any coverage. The other choices are producer obligations.
Which of the following statements is false?
A- An insurance broker acts as the representative of an insured B-Soliciting is attempting to sell insurance, or inducing a person to apply for a particular kind of insurance from a particular insurer C-A certificate issued by the Commissioner evidencing the authority of an insurer to transact insurance D-Insurance-related conduct includes selling, soliciting, negotiating insurance, but not binding policies of insurance C- Insurance-related conduct includes selling, soliciting, negotiating insurance, and binding policies of insurance.
What is the purpose of a Certificate of Authority?
A- Authorizes a producer to sell insurance B-Authorizes a producer to sell surplus lines insurance C-Authorizes an insurer to transact insurance business D-Authorizes an insurer to pay claims C- Authorizes an insurer to transact insurance business C- A certificate issued by the Commissioner is evidence of the authority an insurer has to transact insurance in New Jersey.
Which of the following statements is correct concerning the different lines of insurance for which a producer may be licensed?
A- Limited lines is coverage written by unauthorized insurer. B-Property is coverage guaranteeing or indemnifying owners of real property against loss or damage suffered by reason of liens, encumbrances C-Casualty is coverage against legal liability, including death, injury or disability or damage to real or personal property' D-Personal lines includes coverage on human lives, including endowment and annuity benefits C- Personal lines is property and casualty for primarily noncommercial purposes, whereas Life coverage includes coverage on human lives, including endowment and annuity benefits. Property provides coverage for direct or consequential loss or damage to property. Surplus lines is coverage written by unauthorized insurers.
Which of the following statements is false with respect to the powers and duties of the Commissioner?
A- The Commissioner appoints advisory committees B-The Commissioner appoints officers and other department personnel C-The Commissioner reports annually to the Attorney General and to the Secretary of State D-The Commissioner is responsible for the functions, powers and duties of the Department C- The Commissioner reports annually to the Governor and to the Legislature on the operations of the prior fiscal year.
Which of the following statements is NOT correct concerning penalties?
A- The penalty for failing to maintain copies of all employment contracts and copies of all agency contracts is $100 per contract B-The Commissioner may impose an administrative penalty without notice to the violator C-A time related violation is failing to respond to a department inquiry or failing to act or cease actions as established in the order within 15 calendar days D-Each calendar day a producer is in violation of established statute is considered a separate violation B- The Commissioner must notify the alleged violator in writing, advising him/her of the right to a hearing.
The requirements for Workers' Compensation coverage include each of the following, except:
A- Workers' Compensation will be reduced by Social Security benefits B-Notice to the employer of an injury is the same as notifying the insurer C-Workers' Compensation must cover all employees D-An employer may cancel the policy by giving 3 days' notice D- An insurer or employer may cancel a policy by giving at least 10 days' written notice by registered mail, and a copy of the notice must be given to the Commissioner.
Medical expense benefits under PIP must be at least:
A-$15,000, up to $250,000 per person per accident B-$100, payable weekly C-$10,000, up to $250,000 per person per accident D-$12 per day A- Medical expense benefits under PIP must be at least $15,000, up to $250,000 per person per accident. Income continuation benefits must be at least $100, payable weekly and essential service benefits are $12 per day.
A PAIP policy provides physical damage coverage up to ___________.
A-$60,000 B-$35,000 C-$20,000 D-$50,000 A- The maximum coverage for physical damage in any loss is ACV minus any deductible, up to $60,000, and additional insurance may be obtained through surplus lines of insurance.
Which of the following correctly sets forth the penalties that may be imposed on a person who violates the Fraud Act?
A-1,000 for the first violation, $5,000 for the second violation and $10,000 for each subsequent violation B-$5,000 per violation C-$5,000 for the first violation, $10,000 for the second violation and $15,000 for each subsequent violation D-$10,000 for the first violation and $15,000 for each subsequent violation C- The penalties that may be imposed on a person who violates the Fraud Act are $5,000 for the first violation, $10,000 for the second violation, and $15,000 for each subsequent violation.
Workers' Compensation will provide financial compensation to an employee who incurs which of the following injuries?
A-An injury where the employer is not negligent B-An injury that arises from the employee's willful negligence C-An injury that occurs when the employee is intoxicated D-An injury that is self-inflicted A- Compensation will be made by the employer without regard to the negligence of the employer except when the injury is self-inflicted, the employee is intoxicated or under the influence of controlled substance, or if the employee is willfully negligent in purposely not following safety rules.
Which of the following statements is true with regard to suspension or revocation of a producer's license?
A-Any existing agency relationships with insurance or other licensed organizations may be retained if the producer is planning on reinstating his/her license B-The producer may keep his/her license if the producer is planning on reinstating his/her license C-License fees for the unexpired term of the license may be refunded D-Advertising in the producer's legal or business name may not be used D- Any existing agency relationships with insurance or other licensed organizations must be discontinued. License fees for the unexpired term of the license are not refunded. The producer must immediately return the insurance license to the Department upon a final order of suspension or revocation
Which of the following is NOT an example of a prohibited practice?
A-Backdating B-Twisting C-Rebating D-Defamation A- Backdating the age of an insured by no more than 6 months to save age is not an example of a prohibited practice.
Which of the following practices are prohibited?
A-Canceling a policy due to the insured's failure to cooperate on loss control matters B-Canceling a policy due to the insured's failure to pro-vide underwriting information upon request C-Canceling a policy if a situation arises that increases the probability of loss D-Mid-term premium increases or reductions in coverage D- A mid-term premium increase or reduction in coverage is a prohibited practice.
Which of the following statements is NOT correct regarding the principles associated with ethical conduct?
A-Engage in reducing competition B-Provide advertising and sales materials which are clear as to purpose and honest and fair as to content C-Provide competent and customer-focused sales and service D-Provide for fair and expeditious handling of customer complaints and disputes A- One of the principles associated with ethical conduct is to engage in active and fair competition, not reducing competition.
Which of the following is true regarding the New Jersey Insurance Fraud Prevention Act?
A-Suspicious information regarding an accident obtained by the State Police must be referred to an insurance investigator within 48 hours B-Concealing information requested on an insurance application is a violation of the Act C-Only criminal activities will be litigated by the Insurance Fraud Prosecutor D-A claimant will receive twice the damages if the court determines that the defendant violated the Act B- Presenting false evidence for the purpose of obtaining insurance is a violation of the Act. The State Police and other government agencies will refer information within 24 hours. Criminal and civil actions may both be filed against a person alleged of violating the Act, and a claimant will receive 3 times the damages.
Automobile insurance cannot be cancelled by the insurer for which of the following reasons?
A-Tailgating B-Excessive at fault accidents within 5 previous years C-No liability insurance D-Suspended driver's license B- An insurer may non-renew, but not cancel, an automobile policy if the insured had 2 or more at-fault accidents, violations for 4 or more eligibility points, or failed to maintain coverage without a lapse is the 5 years preceding the expiration of the policy.
Under which of the following circumstances can an insurer NOT use a genetic test?
A-The applicant gave oral consent prior to the test B-The applicant gave written consent prior to the test C-The insurer informed the applicant that the test is required D-The applicant promptly received a copy of the results A- The insurer must have the applicant's prior written consent to take the test and if the applicant wants to be informed of the test results.
Workers' Compensation will provide financial compensation to an employee who incurs a loss under which of the following examples?
A-The employee is willfully negligent B-The loss is self-inflicted C-The employer is not negligent D-The employee is Intoxicated C- Compensation will be made by the employer without regard to the negligence of the employer except when the injury is self-inflicted, the employee is intoxicated or under the influence of controlled substance, or if the employee is willfully negligent in purposely not following safety rules.
Which of the following is correct about choosing a tort exemption?
A-The tort exemption is optional B-No Limitation on Lawsuit option applies for a non-economic loss C-Limitation on Lawsuit applies only to death D-The tort option only applies to the named insured B- With the No Limitation on Lawsuit Option, a person is liable for non-economic loss, and liability may extend to persons who are not required to keep PIP coverage and may apply whether or not the person has optional liability coverage.
Which of the following is not a purpose of the New Jersey Insurance Underwriting Association (NJIUA)?
A-To provide insurance to enable homeowners to purchase and improve property B-To provide needed goods and services, job opportunities for community development C-To attract and retain private capital in central city areas and various other areas of the State D-To provide an adequate market for fire and extended coverage, except mine subsidence insurance D- One purpose of the NJIUA is to provide an adequate market for fire, extended coverage, including mine subsidence insurance.
