PSI General Insurance
Which of the following statements is true regarding the materiality of representations and concealment
It is determined by the effect of the facts on each party by the contract in determining his or her estimate of the disadvantages of the contract
How is an admitted insurance defined according to the California DOI
It transacts insurance according to the law of the state of California
When may a repersentation be withdrawn?
Only before the insurance is in effect
If an insurer pays an insured to $25,000 in lost wages, $45,000 for positions visits and hospital costs, and $15,000 for physical therapy treatment, and later finds out that the claim was fraudulent the insured may be fined as much as
$170,000. Punishable by up to hundred and $50,000, or double the value of the fraud whichever is greater
All of the following factors can be used according to the insurance code in California, to determine auto insurance policy rates. In addition to any other factors, the insurance commissioner is allowed to adopt and include regulations
, The driver safety record of the insured, ( tricky)
Minimum number of required continuing education hours that a fire and casualty brokers-agent must meet
24 hours every renewal. - Which must include three hours of ethics
What else must an applicant for a fire and casualty license, life agent license, or personal lines agent license complete, in addition to pre-licensing classroom study
A 12-hour course on ethics and the California code
Which of the following best describes a binder
A contract of insurance that is temporary, only in writing, between the insured and the insurer
Company that regulates and binds ceding reinsurance on behalf of an insurer is considered
A managing general agent
In California, excess and surplus line coverage needs to be placed through
A surplus lines broker
An insurer that has a ceritific of authority is Californai is?
Admitted
Under section 770 of the insurance code true regarding unfair or deceptive trade practices, which of the following is an unfair trade practice
An entity cannot demand the insurance to be placed with a particular agency
How is an insurance broker defined according to the California insurance code
An individual who receives commissions for transacting insurance on behalf of another person, but not on behalf of an insurance company
Insureds, especially those with higher premiums, very often do not have the immediate funds to pay required premiums, such as automobile liability insurance. In many cases, insurers will provide premium financing which of the following statements is correct regarding this financing, according to the requirements of the California insurance code
Any insurance that assists in premium financing services is required to maintain all records regarding such financing for three years after transaction
When must insurance records of insurance agents and isurance brokers be made avabilable to the insurance Commissioner?
At all times
When is a property and casualty agent required to inform an insured of any conditions which may be precedent to coverage regarding a personal auto policy
At time of application
All licensees must be appointed by the insurance companies they represent in order to sell the lines of insurance that a particular insurer may offer. Assuming that a licensed fire and casualty broker/agent has received the proper appointment, what type or types of insurance, from the following list, me the individual self
Auto property insurance
An applicant for insured does not reveal information trhat the insurer would rely upon to issue the policy. This is a/an?
Concealment
In the business of insurance, the active concealment is defined by all of the following statements except
Concealment does not occur if no inquiry is made
What must a licensee do in order to surrender for cancellation a license in their possession
Deliver the document itself to the Commissioner
Which of the following statements is not true? A fire and casualty managing
Does not have the authority to collect premium for producing broker-agents
All of the following are areas of market regulation Execpt?
Employee training
Where would an insured, that is in the business of importing exotic animals from Africa, most likely go to obtain insurance coverage
Excess and surplus lines insurer
What must a life agent, travel agent, or fire and casualty insurance agent do in order to act as an agent of a particular insurer
File an appointment with the commissioner
What must an insured do who accepts an application from an agent who is not specifically appointed by the insurer, and then issues a policy from that application
Forward to the Commissioner a notice of appointment within 14 days of receipt of application
Which of the following ways are the least professional and the least likely to correctly identify the loss exposure? You
Get a copy of all current policies and declarations what coverage they have been carrying and how much they have been paying
Property-casualty broker-agent, when properly appointed may transact all of the following except
Health insurance
Which of the following describes an insurer who has enough financial resources only to provide for all of its liabilities and for all reinsurance of all outstanding risks
Insolvent
According to the California insurance code, a binder is deemed a valid insurance policy for the purpose of providing that the insured had the insurance coverage specified in the binder for each of the following types of insurance except
Life insurance
All of the following are characteristics of and ideally insurable loss exposure except
Losses that are catastrophic
It can be very tempting for commission-based insurance sales person to perform unethical activities in order to make a sale. Of the following, which would not be a reason why the agent might be tempted to act on ethically
Maintaining the best interest of customers first and foremost
The state law that regulates insurer practices regarding underwriting, sales, rate-making, and claims handling are called
Market conduct regulations
What is required of a broker-agent before appointing an insurance solicitor
Must hold a permanent license
The type of transaction and insurances that a surplus lines broker is involved with are
Nonadmitted insurers, property and casualty insurances
A fire and casualty managing general agent can do all of the following except
None of these are excluded from the power and authority given to fire and casualty managing agents
All of the following are requirements for a notice by mail to an insured by an insurer except
Notice must be sent with return receipt required
Insurers may purchase reinsurance for a variety of reasons. Which of the following is not a good example of the use of reinsurance? Insurer purchases reinsurance
Only on the below average business submitted to them, keeping a good business for themselves
In the state of California, how is a domestic insurer defined according to the California DOI code
Organized, characterized, or incorporated under the laws of the state of California
If an insured assigns a claim form for a claim which is fraudulent, the insured may be guilty of
Perjury
Every admitted insurer in the state of California is required to maintain a unit or division to investigate which of the following
Possible fraudulent claims made by insureds
Filing system is used in California for most lines of insurance
Prior approval
The method that the California DOI uses to approve or dissapprove rate fillings for various types of insurance such as homeowners and automoblie is know as?
Prior approval method
A repersentation as to the future is consitered which of the following?
Promise
RW and Associates is an agency which represents BLG Insurance Corporations. RW and Associates may leave the names BLG Insurance Corporation in its advertisements by clearly stating the relationship between the two businesses in any of the following ways EXCEPT?
RW and Associates underwriting for BLG insurance Corporation
The negotiation of a policy involves which of the following?
Sending the prospect and email suggesting that they buy a certain type of policy
Any person who makes a loan of money using real property as security
Shall not make available the information contained in a borrowers fire or casualty policy if the borrower has filed a statement with the lender that they do not want the lender to disclose this information
The California insurance code
Requires agents to keep record of any compensation they may have received for their services involved with premium financing
It is vital that an insurance agent/broker fully assesses, analyze, and review a particular risk in order to determine the proper insurance coverage needed. The least likely way to do this is to
Review all coverages in their current insurance contracts as well as the premium paid
The execution of a policy involves which of the following?
Signing a covering note
The insurance code defines an insurance broker is
Someone paid to transact insurance on behalf of another person, but not on behalf of the insurer
What type of insurance company has owners who are stockholders in the company and to share in the profits of the company
Stock insurance companies
What would the commissioner likely do if an agent induces a client to co-sign a loan
Suspend the agent's license
An orgainzation will cease to exist as an entily, eligible to hold alicence, for all of the following reasons EXCEPT?
Termination of a key employee
What will happen when an agent appointment to an insurance company is terminated and the agent has no other appointments with any other insurance company
The agents permanent license becomes inactive
What does it mean if an agent's license is an active
The agent cannot transact any insurance business for which a valid, active licenses required
Entities are organizations that provide coverage for medical expenses in California are subject to the jurisdiction of the state department of insurance (with several specific exceptions), unless these entities or organizations can demonstrate that during the course of providing these services, they are subject to the
The answer is all of the above: an agency of the federal government, another California governmental agency in the state of California, and the agency of another state
For more serious offenses and convictions, an application for a license can be denied without a hearing. Which of the following circumstances would allow for an application to be denied for an insurance license, without a hearing
The applicant for the license had a license denied for cause within the previous five years
I which of the following circumstances can the insurance Commissioner denying the application for an agent's license without a hearing
The applicant has had a license application denied for cause within the past five years
If an insured honestly believes their last ticket was more than 36 months ago and the policy was issued, and then the insurers car is stolen. While processing the claim the insurance company discovers the insured had received his most recent traffic ticket for speeding 32 months ago why was the claim still paid in the policy continued
The concealed facts were not material. They would have paid the claim anyway
Which of the following is the only reason that an insurer can cancel an automobile insurance policy
The drivers license of the individual who usually operates the vehicle and who is insured by the policy, has had his or her license suspended temporarily
Where do most states require insurers to file policy forms
The insurance department
The California insurance code requires property insurance policies specify all the following information except
The insured's address
it is a violation of the California insurance code to actAs a producer for a non-admitted carrier unless
The producer is a surplus lines broker
The California insurance code contains requirements concerning the requirements for name approval for all insurance licensees. These requirements include which of the following
The professional designation CPCU is accountable following the name of any property and casualty broker-agent who has completed the requirements for chartered property and casualty underwriting
An agent who diverts/co-mingle's premium dollars for the agents own use is guilty of
Theft
The word Materiality applies to the concept of concealment and representation. Which of these is true in this regard
Themateriality of any information in this regard is determined by the influence of the facts on each party in determining their estimates of the disadvantages of the proposed contract
Which of the following statements is true regarding insurers with admitted status in California
They may not use race, color, religion, or national origin as a condition to use higher rates
The process of underrating a disability income insurance policy includes analyzing the risks associated with certain activities, hobbies, and hazardous sports therefore, how does the California insurance code defined and classify an act of an applicant who doesn't mention, when applying for this type of insurance, his recent interest and participation in bungee jumping
This is defined and classified as material information and is considered concealment
how do insurance regulators view a statement made by an agentTo a prospective insured that the dividends of an insurance contract are guaranteed each year
This would be considered a misrepresentation
A represtation as to the past, present, or future is a/an?
Verified promise
When does the license of a fire and casualty broker-agent become inactive
When the broker agent has no appointment insurance company, but licensing renewal fees have been paid and CE requirements have been met
When does the authority to transact insurance, that is granted to a licensee from an insurance company, become effective
When the insurance company representative signs the notice of appointment
All firing Kelly to broker-agents must not only be licensed with the Department of Insurance but they must also be appointed with the insurance companies they will be representing. When does this authority to transact business, resulting from the insurer appointment become effective
When the notice of appointment is signed by the insurer
What is the one main factors that the insurance commissioner uses while determining whether a rate excessive or unfairly discriminatory
Whether the rate mathematically reflects the insurance companies investment income
In the state of California, no great will remain in effect if it is considered to be any of the following except
impartial
Which of the following insurance professionals would be employed to add an insurance broker
insurance solicitor