#2 Distribution System

Any person who transacts insurance wihtout a valid license is guilty of a misdemeanor, punishable by a fine not exceeding _________.

$ 50,000

A lender does have the right to provide insurance or renew the insurance and charge a transaction fee if the borrower fails to deliver proof of insurance at least ____ days before the policy expires.

30 days.

Binders can be extended how many additional days?

60 days

Which of the following is not true about the relationship between an agent and a solicitor? A. An agent or broker cannot transacts a solicitor, but a solicitor can transact as a broker or agent. B. A solicitor cannot be employed by more than one fire and casualty broker/agent at the same time. C. A solicitor may give premium quotes over the phone, just like an agent. D. An agent represents the company, whereas the solicitro is an assisstant to an agent and has no binding authoirty.

A. An agent or broker cannot transactas a solicitor, but a solicitor can transact as a broker or agent.

There are no binders issued in A. In health insurance. B. Excess of 1 million. C. Any of the above. D. Life insurance.

Any of the above.

An insurance agent is appointed to transact: A. All lines of insurance. B. All are incorrect. C. All classes of insurance. D. All lines except 24hr care.

B. All are incorrect.

Which marketing system does the insurer not own the expiration list? A. Direct writing system. B. An independent agency. C. A direct mail system. D. A Internet

B. An independent agency.

Which of the followingis NOT a source of information an underwriter might use to investigate an application in order to approve or reject it? A. Medical Information Bureau. B. Department of Industrial Relations C. Finanicla Reports D. Department of Mother Vehichels.

B. Department of Industrial Relations

Which of the following is a responsibility of the insured in an insurance contract? A. Fully explain the pollcy to the client. B. Give true statements and information on the application. C, To complete the application. D. Send the application to the underwriting deparment.

B. Give true statements and information on the application.

In which of the following marketing distribution systems does the agent represent more than one insuere and more than one company? A. Direct writing system. B. Independet agency C. Exclusive agency. D. Direct mailing system.

B. Independet agency

A broker can transact all of the following EXCEPT: A. Casualty Insurance. B. Life, health, and disability insurance. C. Personal Lines. D. Property Insurance.

B. Life, health, and disability insurance.

Law of agency os the relationship between A. Insurer and customer. B. agent and principal. C. agency and agent. D. agent and client.

B. agent and principal.

An insurer ot authorized to conduct business in California would be: a. non-admitted insurer. B. either of these. C. an authorized insurer. D. neither of these.

B. either of these.

A person licensed as a broker/agent shall be deemed to be: A. acting with the same authority granted a managing general agent. B. Responsible for deciding if an application should be approved or rejected. C. Acting as an insurance agent in the transaction of insurance placed with those for whom a notice of appointment has been filed with the Commissioner. D. Involved in the business of financing the purchase of real estate.

C. Acting as an insurance agent in the transaction of insurance place with those for whom a notice of appointment has been filed with the Commissioner.

Which of the following is NOT an action would not be considered thransacting insurance? A. The actual esecution of a contract. B. Any transacction that later result from the operation of the contract. C. Calling an insurer for a price quote. D. Solication of Insurance.

C. Calling an insurer for a price quote.

Which of the following is NOT a typeof authority given to agents? A. Implied authority. B. Express authority. C. Customary authority. D. Aparenty authority.

C. Customary authoirty.

Which of the following actions would not be considered transacting insurance? A. Giving a price quote over the phone. B. Emailing a prospect a auto quote. C. Handing a prospect a business card and asking them for informaiton. D. Collecting premium for a policy.

C. Handing a prospect a business card and asking them for informaiton.

A ________ liceensee is authorized to transact ONLY the following lines of insurance: Automobile, recreational vehicles (noncommericial purposes), personal waercraft, residental property, earthquake, flood, inland marine, umbrella (Excess liabilty). A. Life only. B. Fire and Casualty. C. Personal Lines. D. Limited Lines Automobile.

C. Personal Lines.

In a legal relationship, which authority does a principal (company) give the agent in writing? A. Apparent authority. B. Implied authrity. C. Customary authority. D. Express authority.

D. Express authority.

Which of the following not require a license? A. Public Adjuster. B. Independent Adjuster. C. All require a license. D. Insurance Adjuster.

D. Insurance Adjuster.

Monitoring of exising risks is: A. conditional underwriting. B. a code requirement C. pre-selection D. post- selection.

D. post- selection.

The application is the document that: A. shows proof of insurance. B. serves as a temporary contract that usually lasts 30 days. C. shows the insured has coverage currently in force. D. states the name of the insured, the premium, and other facts that help the insurer decide whether to accept or reject it.

D. states the name of the insured, the premium, and other facts that help the insurer decide whether to accept or reject it.

Errors anda omissions is a type of liailbity insurance. A. for protection against misrepresentation when filing a declaration page. B. that indemnifes a client. C. for insured's use to protect themseleves against a claim loss. D. that agents use to protect themseleves if they give incorrect advice or information to a client.

D. that agents use to protect themseleves if they give incorrect advice or information to a client.

In which system is the agent considered an employee? A. Exclusive agency system B. Direct writing system. C. None of these. D. A direct response system.

Direct writing system.

A solicitor holds which license? A. Personal llines broker-agent. B. A solicitor's license. C. P&C broker-agent. D. Eitther P&C broker-agent or Personal lines broker-agent.

Eitther P&C broker-agent or Personal lines broker-agent.

If an agent gives incorrect advice or unknowingly provides incorrect information to the client, which of the following liability insurance policies for nonmedical professionals is available to pay for losses or defend lawsuits that might be filed against him? A. Nonadmitted. B. Liability Insurance. C. Medical Insurance. D. Errors and Omissions.

Errors and Omissions

The underwriting process consists of all of the following basic steps except: A. Gather necessary information. B. Issue the rate C. Montor the decision D. Implement the decision

Issue the rate.

When dealing with insurance in connection with sales or loans, violating the legal provisions specified by California law is considered a: A. Fine. B. Misdemeanor. C. Felony. D. Penalty.

Misdemeanor.

The following acts are unlawful and are misdemeanors in California except when performed by a surplus lines broker EXCEPT: a. In any manner, advertising for an admitted insurer in this state. b. In any other manner, aiding a nonadmitted insurer to transact insurance business in this state. c. Acting as agent for a nonadmitted insurer in the transaction of insurance business in this state. d. In any manner, advertising for a nonadmitted insurer in this state.

a. In any manner, advertising for an admitted insurer in this state.

Which of the following statements about insurance in connection with sales or loans is TRUE? a. A person approved by the Commissioner may be required to be involved in the business of financing the purchase of real estates. This person would act as the agent in purchasing insurance for the real estates. b. No person involved in the business of financing the purchase of real estates may require the purchase of insurance through a specific agent as part of the requirements in the purchase. c. No person involved in the business of financing the purchase of real estate may require the purchase of insurance through a specific agent as part of the requirements in the purchase. d. A person involved in the business of financing the purchase of real estate may require the purchase of insurance through a specific agent as part of the requirements in the purchase.

c. No person involved in the business of financing the purchase of real estate may require the purchase of insurance through a specific agent as part of the requirements in the purchase.