Texas Adjusters License
All of the following may work as licensed adjusters in Texas, but are exempt from taking the state licensing exam, EXCEPT:
A previously licensed Texas adjuster whose license has been expired for 15 months..
All of the following statements are TRUE regarding a proof of loss statement, EXCEPT:
A proof of loss is also known as a loss notice.
Which of the following statements best describes "the law of agency"?
A relationship in which someone is authorized by contract to represent another party..
Charlene states on an application for personal automobile insurance, that she has not been involved in any "at-fault" accidents within the past five years. The next day, Charlene later remembers an accident and corrects this statement to include an accident that occurred three years ago. Charlene's original statement can be described as:
A representation
Which of the following terms describes a statement that is guaranteed to be the truth throughout the duration of the policy?
A warranty
The NAIC Model Unfair Claim Settlement Practice Act provides for a financial penalty of _________ for each violation of the ACT .
$1,000
Jake is a busy all lines adjuster in Texas. His employer has kept him so busy in fact, that he realizes his license has expired and he has not completed even one hour of the required continuing education credits to renew his license. Which of the following is the amount Jake will be subject to in fines for his lack of CE compliance?
$1,200
Sheena completed a 40-hour claims certification course and has reported this to the Texas Department of Insurance to receive continuing education credit for the required 24-hours in the current reporting period. How much of the remaining 16 hours of credit can Sheena carry over to her next two-year continuing education compliance period?
0 hours because Texas does not permit any continuing education credit hours to be carried over to the next reporting period.
The NAIC Model Unfair Claim Settlement Practices Act specifies that the insurance company must provide the proper claim forms with a reasonable explanation of how o use them to the claimant within:
15 calendar days of the request
Indemnify Insurance, Inc. is a Texas insurer has violated the regulations with regard to the timely payment of claims. Indemnify will now be required to pay interest on the amount of the claim at a rate of:
18% per year
The Texas Commissioner may require an interinsurance exchange to cease conducting business in Texas if its required aggregate surplus is impaired by more than:
25%
Surplus Lines companies in Texas have _____ to acknowledge the receipt of a claim.
30 Days
A license holder in Texas must report a change in mailing address within:
30 days of the change.
Adjusters in Texas are required to keep records of the continuing education courses they have taken to meet the license renewal requirement. How long are licensees required to keep these records?
4 years
Adjusters in Texas must complete at least _____ of the continuing education required to renew their license in a classroom or classroom equivalent setting.
50%
The Texas Department issues emergency adjuster licenses in case of an emergency arising out of a disaster. An emergency license is valid for ______ days.
90
The Texas Insurance Commissioner's authority to discipline or sanction insurance carriers does NOT apply to which of the following types of insurers?
A Canadian casualty company
A document that temporarily obligates an insurance company to provide coverage while the issuance of a policy is pending is known as:
A binder
Which of the following is a "general summary" of a policy?
A certificate of insurance
Which of the following statements is NOT TRUE regarding the usage of a claims certification course to meet the Texas adjuster CE requirements?
A claims certification of at least 15 hours is permissible to meet the entire continuing education requirement for a single reporting period.
Which of the following phrases best describes a "hazard?"
A condition that increases the chances of a loss..
All of the following must hold an adjuster license in Texas, EXCEPT:
A licensed insurance agent acting as a claims supervisor.
Any intentional misinformation provided by an applicant for an insurance policy that would have kept the insurance company from issuing the policy had that information been known is:
A material misrepresentation
All of the following are exempt from the Texas adjuster continuing education requirement, EXCEPT:
A military service member not serving in a combat theater during the continuing education reporting period.
Margaret is a co-owner of a business. She purchases an insurance policy to cover the property of the business and lists Charlie, the other co-owner, on the policy. There are others covered by the policy that are referred to as employees. For the purposes of this policy, Charlie is considered to be:
A named insured
All of the following are exempt from holding a Texas adjuster license, EXCEPT:
A person adjusting claims as an employee of an adjustment bureau.
Which of the following statements best describes the term "fiduciary".
A person who is entrusted with the assets of another.
All of the following are Texas adjusters who are not permitted by law to adjust a loss related to roofing damage on behalf of an insurance company, EXCEPT:
An adjuster that has taken roofing classes and is capable of repairing a damaged roof.
A church has had the woodwork in the building refinished and new stain and varnish has been applied. The workers placed the rags and brushes that were used to apply the varnish in a small closet and closed the door, creating the possibility of spontaneous combustion. Which of the following terms best describes this condition?
Hazard
Oliver has instituted a contested case with regard to an emergency cease and desist order that he received from the Texas Department of Insurance. He has received a notice of hearing for a contested case and reads the required disclosure written in 12-point boldface type. This disclosure states that if Oliver does not file a written response to the notice within the required time period, the hearing may be cancelled and:
His license may be revoked by default..
All of the following are remedies the Texas Commissioner may impose for a violation of the insurance code, EXCEPT:
Impose a criminal penalty.
Which of the following situations would NOT be considered an unfair claim settlement practice according to the NAIC Model Act
Indemnify insurance pays thousands of claims per year, but on two of those claims they failed to accept or deny the claim within the time frame required by state law
Standard and Poor's, A.M. Best and Moody's are examples of:
Independent rating services.
Rick has three insurance policies covering his small commercial building for $700,000. Insurer 1: Carries $400,000 of the coverage. Insurer 2: Carries $200,000 of the coverage. Insurer 3: Carries $100,000 of the coverage. According to the provisions of the policies, the loss will be settled using the contribution by equal shares method. When Rick's building suffers a $500,000 covered loss, which of the following statements is correct on the amount each insurer will pay?
Insurers 1 and 2 will each pay $200,000 and Insurer 3 will pay $100,000.
All license application and state licensing exam fees in Texas are deposited:
Into the Texas Department of Insurance operating account.
The doctrine of utmost good faith:
Is a legal obligation that requires both parties to the insurance contract act with honesty and integrity.
Which of the following best describes the purpose of the "insuring agreement(s)" contained in an insurance policy?
It contains the insurer's promise to pay in case of a loss..
All of the following statements are TRUE regarding the notice of an emergency cease and desist order, EXCEPT:
It may be served electronically.
Thomas has submitted a request for a hearing to contest a cease and desist order issued by the Texas Commissioner. Which of the following statements is NOT TRUE regarding this request?
It must be submitted no later than the 60th day after the order was served.
Which of the following statements is TRUE with regard to an emergency cease and desist order issued in Texas?
It remains effective during the time following a request for hearing and the hearing date.
John's Texas adjuster license has been expired for 16 months. Which of the following describes the procedure John will need to follow to reinstate his license?
John will need to take the state licensing exam again and submit an application for a new license
Joe enters into a contract with Martha to set fire to her house so she can collect on her insurance policy. Martha will pay Joe a portion of the insurance proceeds for his trouble. Which of the following parts of a valid contract is missing in this situation?
Legal Purpose
Milton agrees to steal and wreck Albert's car for $4,000, so that Albert can collect $8,000 under his auto insurance policy. Which of the elements of a valid contract are missing in this agreement?
Legal Purpose
Which of the following describes a "peril"?
Lightning that stikes a house and destroys electronic equipment inside.
All of the following are examples of unfair claim practices, EXCEPT:
Making claim payments and stating the coverage under which payment is made
For a misrepresentation to void an insurance policy, it must be:
Material
A Texas adjuster has adjusted a claim under a policy type for which he is not licensed. This is considered a:
Misdemeanor and is punishable by a fine of not more than $500, confinement in the county jail for not more than six months, or both.
Private, unincorporated mutual insurers that consist of associations that agree to equally share risks among its members are known as:
Reciprocal exchanges..
What type of insurance is usually provided or subsidized by the state or federal government because it is not ordinarily available from private insurers?
Residual market insurance.
Horatio is a business owner who is part of a business owners group that are buying old commercial buildings in their small city and refurbishing them. Horatio has bought a beautiful historical building made mostly of wood. He installs a sprinkler system right away to prevent a fire. What risk management strategy is Horatio using?
Risk Reduction
A risk where both profit and loss are possible is a ____________ risk.
Speculative
100-year flood is an example of which of the following types of risk?
Static Risk
The Texas Insurance Commissioner may issue an emergency cease and desist order to an insurance company for all of the following reasons, EXCEPT:
Submitting new rates for approval.
Ted holds a property & casualty adjuster's license as well as a workers' compensation adjuster's license in Texas. Which of the following statements best describes how the mandatory continuing education requirements will apply to Ted?
Ted will be required to complete a total of 24 hours of continuing education to meet the requirement for BOTH licenses
The doctrine that states an insured's policy should provide the coverage that an average prudent person would expect is:
The "Reasonable Expectation" doctrine.
With regard to the examination of insurance carriers in Texas, which of the following statements is TRUE?
The Department may conduct the examination alone or with representatives from the Insurance Departments of other states..
Which of the following sections of an insurance policy contains language to assist an insurance company in managing moral and morale hazards?
The Exclusions
The first party to an insurance contract is:
The Insured
The time period after the policy inception and before the policy expiration is known as:
The Policy Period
The Texas Commissioner has ordered that Indemnify Insurance, Inc. make restitution to those affected by their violation of the insurance code. Which of the following parameters of the restitution is NOT determined by the Commissioner?
The explanation.
Talia is a licensed adjuster in Texas. She has been so busy adjusting claims over the past two years, that she realizes a month before her license is scheduled to expire that she hasn't taken any continuing education courses. She applies to the Texas Department for an extension to obtain her CE credits citing her busy work schedule. Which of the following statements best describes how the Texas Department will likely answer Talia's request?
The extension will likely be denied because the Texas Department does not grant extensions to obtain CE credit based on business reasons.
When can an insured assign his or her insurance policy over to another party?
When the insurer provides written consent.
Any corporation organized with a representative form of government operated solely for the mutual benefit of its members is known as a:
Fraternal benefit society.
All of the following are part of the "entire contract", EXCEPT:
An agreement made between the insured and the agent stated verbally, that the agent will personally service the insured's policy, and it will not be delegated to a staff member is part of the entire contract.
The Texas insurance code specifies that "misrepresentation" includes all of the following, EXCEPT:
Any false statement.
Adverse selection occurs when:
Applicants are accepted by the insurer with little or no attention given to underwriting
The nonrenewal of an insurance policy occurs:
At the end of the policy period
Before an insured can bring a lawsuit against their insurer to provide coverage under their policy, the insured must:
Fulfill all of their required duties as outlined in the policy.
Brittany is a licensed adjuster in Texas. She failed to renew her license at the specified time, and now her license has been expired for 60 days. Which of the following best describes the next step Brittany should take?
Brittany can still apply to renew her license, subject to an automatic fine.
Candace lives in Louisiana and holds an independent adjuster license there. She also holds a non-resident Texas independent adjuster license. Which of the following statements best describes Candace's continuing education requirements to renew her Texas license?
Candace must complete her continuing education credits for the state of Louisiana. She will then report those hours to Texas to renew her license.
An applicant fails to disclose known facts when completing an application for insurance. This act is known as:
Concealment
Binders Keepers, Inc., a domestic insurer in Texas had an examination conducted by the Department that ended on December 31st, 2008. Another examination was commenced on July 15th, 2013. What is the examination period for the second examination?
December 31st, 2008 to December 31st, 2012.
Where in the insurance contract can an insured find the terms used throughout the policy and an explanation as to what they mean within the context of the policy?
Definitions
Binders Keepers, Inc. is selling their insurance products via telephone calls. Which of the following insurance marketing and distribution systems is being utilized by Binders Keepers?
Direct response system.
The titles bestowed on the person empowered to administer and enforce the insurance laws of Texas include all of the following, EXCEPT:
Director
The Conditions section of an insurance policy sets forth the:
Duties of the insured and the insurance company.
The NAIC Model Unfair Claim Settlement Practices Act DOES NOT apply to any of the following types of coverage, EXCEPT:
Dwelling insurance
Willie's Widgets has been earning a large portion of their market share for 10 years. During Willie's 11th year in business, Wynonna's Widgets opens and her superior marketing practices leaves Willie unable to continue in business. Which of the following types of risk caused Willie's loss?
Dynamic Risk
A written modification of an insurance policy is known as a(n):
Endorsement Form
Three hours of the required continuing education courses in Texas for adjusters must cover the topics of:
Ethics or consumer protection.
Stewart has filed a complaint with the Texas Department of Insurance against Indemnify Insurance, Inc. The Department will notify Stewart and Indemnify of the status of the complaint:
Every three months.
Daniel has paid a premium to an insurance company for a Homeowners policy, and the policy was issued. Later, a fire occurred, and Daniel's home suffered damage. In this situation, both Daniel and his insurance company are required to perform certain duties because an insurance policy is a(n) ______ contract.
Executory
Which of the following is NOT an example of an unfair claim settlement practice
Failing to examine a claimant under oath
Which of the following is NOT a common risk management technique?
Multiply the risk by engaging in hazardous activities.
The Texas Department has decided to suspend a domestic insurer's certificate of authority for the maximum time allowable by law. This time period:
Must not exceed 1 year.
The Texas Commissioner has decided to modify the certificate of authority held by Binders Keepers, Inc. The Department must provide notice of the modification:
No later than the 10th day before the date the modification will occur.
Katherine lives in Texas. A third-party claim has been filed against her insurance policy by Joe, for an accident in which Katherine was liable. Joe's attorney contacts Katherine's insurance company and makes an initial offer to settle the claim. The insurance company must notify Katherine of the offer, in writing:
Not later than the 10th day after the date the initial offer was made..
When a licensee in Texas receives an inquiry from the Insurance Department regarding their insurance transactions, he or she must respond in writing:
Not later than the 15th day after the date the inquiry is received..
The NAIC Model Unfair Claim Settlement Practices Act specifies that when a violation of the Act is suspended, a hearing must be held
Not less than 30 days after notice has been provided to those involved
The agreement between the parties to an insurance contract is known as:
Offer and acceptance.
When a person purchases several insurance policies to provide more coverage on a risk than the value of the possible loss, it is known as:
Over insurance
A mutual insurance company is:
Owned by its policyholders
Risk retention and purchasing groups are used to provide which of the following types of coverage?
Products Liability insurance.
All of the following are included in the term "adjuster" as referenced in the Texas insurance code, EXCEPT:
Public Adjuster
In Texas it is considered to be an unfair or prohibited practice if an insurer does not keep a record of all complaints received for:
The preceding three years
Which of the following is most likely to be uninsurable?
The purchaser of a new home wants to protect herself from a possible drop in housing prices
One of the Unfair Claim Settlement Practices is "failing to affirm or deny coverage of claims within a reasonable time after having completed its investigation related to such claim or claims". How is the length of time that is considered "reasonable" decided?
The state legislatures set the reasonable time period by statute
Which of the following is NOT a duty of the Texas Department of Insurance?
To ensure that insurance companies make a profit.
Under the A.M. Best insurance company rating system, a rating of "E" means that the company is:
Under state supervision..
Libby completed an application for a new residential policy to cover her home, stating that she does not use the dwelling for business purposes. However, Libby has been conducting business operations from the home and has hired several employees who work out of the home. She also has several clients per day coming to the home for business purposes. When Libby's insurer finds out about the additional business exposures, they decide to take action. Which of the following actions is Libby's insurer most likely going to take?
Void her policy to inception.
