Iowa Property and casualty exam practice (CASUALTY)

Beck Company's insurance policies include a crime policy that includes blanket coverage on employee theft. Beck's policy would apply to theft of covered property by any of the following individuals EXCEPT

Alton, an indpendent contractor who writes advertising copy for Beck

All of the following statements are true about applying for a nonresident producer's license in Iowa EXCEPT:

An applicant must establish residency in Iowa

Under workers compensation laws, a current employer is not liable for compensating an employee for

An employees preexisting disability that occurred as a result of work-related injury with another employer

Which statement regarding the licensing of insurance producers is correct?

Candidates for a resident license are required to pass a state license exam but candidates for a nonresident license are usually exempt from the license exam

Who regulates all insurers and producers conducting insurance business in Iowa?

Commissioner of Insurance

Which one of the following incidents is an example of vicarious liability?

Rudy is held responsible for an accident caused by his employee

Which one of the following situations would trigger coverage under a firm's computer fraud insuring agreement?

Shannon hacks into a merchant's computer and redirects merchandise ordered by the merchants customer be shipped to her house

An enforceable contract must involve consideration by both parties. When an insurance company enters into a contract, what is the insurance company's consideration?

a promise to pay for losses as stipulated in the insurance contract

Before workers compensation statutes were enacted, employers could defend themselves against negligence claims by injured workers by employing certain common-law defenses. Which is NOT one of those defenses?

act of God

An insurance producer whose actions are not authorized by the insurer but which the insurer accepts anyway is demonstrating:

apparent authority

What must an insurance company do to make a producer its agent?

appoint the producer as its agent

The Terrorism Risk Insurance Act (TRIA) requires insurance companies to make coverage for certified acts of terrorism available for all the following lines of insurance EXCEPT:

homeowners

The two things that an insurance company's loss ratio compares are:

incurred losses and earned premiums

Which of the following would not be covered by Iowa workers compensation laws?

independent contractor

An insurance policy is different from a surety bond in that an insurance policy

is issued with the expectation that some insureds will have losses

When considering the suitability of an insurance product for a customer, an agent's primary duty is to determine whether the product:

is most appropriate for the customers needs

Stephanie is hired by ABC Insurance Company's home office. She does not have an insurance producer's license. Which of the following duties may she perform for ABC?

mail company correspondence for the president

It is an unfair method of competition for a producer to inaccurately portray to a prospective insured the terms, benefits, and dividends paid on an insurance policy. This deceptive practice is called

misrepresentation

Making a false statement in an insurance policy application to obtain a benefit from the insurer is known as:

misrepresentation

Wayne's insurer refuses to renew his motor vehicle insurance policy solely because he turned 60 years old. May the insurer refuse on this basis, and why?

no, because age may not be the only reason to refuse renewal

How often must the Insurance Commissioner examine the affairs and transactions of every authorized insurer?

once every five years

After several violations, Napoleon Bar and Grill's liquor license was revoked. Napoleon did not inform its insurer of this fact and continued to serve alcohol to its regular customers, including Brett. After a long night at the bar, Brett was involved in a serious auto accident and sued Napoleon under the applicable dram shop act. Napoleon's liquor liability insurance:

provides no coverage because Napoleans required license was not in effect

Lamont owns 100 shares of ABC Insurance Company stock and receives dividends from this investment. What type of insurer is ABC?

stock

Because the insurer he represents was running a liability umbrella sales contest, Daniel talked Jill, his agency's customer, into buying a personal umbrella policy although he realized the money would better be spent on disability insurance in her circumstances. What standard does Daniel's recommendation fail to meet?

suitability

Which of the following is most likely to be an insurable risk?

the chance that the fire will destroy the building

Brian's car collides with Lola's car in the high school parking lot. She claims he hit her on purpose, but Brian insists the collision was accidental. What is true about his coverage under his PAP's liability insuring agreement?

the insurer will defend Brian and pay damages if coverage applies

In an auto policy that has split limits of 50/100/75, what does the "75" represent?

the maximum amount the insurer will pay for damage to other cars or property

Melanie becomes intoxicated at a party and then Pierre persuades her to sell her car to him for $25. Pierre puts the terms in writing and both of them sign the document. The next day, Pierre goes to Melanie's house with the money and demands that she deliver the car to him. The agreement he made with her is:

unenforceable because one pf the parties was incompetent

If the liability insurer of an insured motor vehicle has had insolvency proceedings instituted against it in Iowa, the insured motor vehicle is considered a(n)

uninsured motor vehicle

All of the following causes of loss are commonly listed as excluded perils in open perils property insurance policies, EXCEPT:

vandalism

Which of the following is not within the powers of the Iowa Insurance Commissioner?

writing insurance laws

What monetary penalty may be imposed if a producer is transacting insurance business and is not licensed to do so?

$1,000 per violation

Which of the following actions would not subject a producer to license probation, suspension, revocation, or nonrenewal?

failure to meet sales goals

Which of the following documents is required before an insurance company may transact insurance business in Iowa?

certificate of authority

In an auto policy that has split limits of 50/100/75, what does the "100" represent?

the maximum sum the insurer will pay to all injured persons

An employer that is unable to purchase workers compensation insurance in the state's voluntary private market may be able to procure it through:

the states residual market facility

What is the purpose of endorsements in a property and/or liability insurance policy?

they modify the provisions in the policy form

Insurer Zeta forces its insureds to institute legal action on claims by offering them significantly reduced settlement offers than they should receive. Which statement is true about this practice?

this is an unfair claims settlement practice

Kelly is a licensed insurance producer. She last renewed her license early this year. When will her license expire

three years from now, on the last day of her birth month

If an insurer believes that it has received a fraudulent insurance claim, which of the following must be notified

Iowa Insurance Fraud bureau

Barbara's car is in the dealer's garage when lightning strikes the building and ignites a fire that destroys it and its content. The dealer's garage policy includes garagekeepers coverage with the primary direct coverage option. How does the policy address the loss?

It will pay for the loss to barbaras car and other customers cars subject to the policys limit and deductible

Josiah is the sole proprietor of a luggage repair business. His wife, Bonnie, is the office manager. Josiah is the named insured listed in the business' commercial general liability insurance policy. Bonnie's sister Ruth is a part-time employee. Who is insured under the policy?

Josiah bonnie and ruth will respect to all business activities

If the Bakersfield Property & Casualty Insurance Company has a very low volume of insurance policy sales, must it be a member of the Iowa Insurance Guaranty Association?

Membership is madatory

which part of the personal auto policy (PAP) contains an insuring agreement that covers the named insured for the cost of legal representation in a lawsuit arising from an auto accident?

Part A liability coverage

Frieda Hotel's crime policy includes a guests' property endorsement that covers all the following claims or losses EXCEPT:

Property stolen from a guests care while parked in Friedas lot

Which of the following is not an unfair claims settlement practice if committed by an insurance company in Iowa?

failing to promptly settle a claim for which liability is uncertain

A certified abstract of an individual's operating record, if purchased directly from the Department of Transportation, must be retained for at least how many years?

five

The Iowa Insurance Commissioner is appointed for a term of

four years

Nick let his producer's license lapse eight months ago after he failed to pay the renewal fee and fulfill continuing education requirements. What must he do to reinstate the license?

fullfill CE requirements and pay fees for renewal and reinstatement

If an employee sustains a personal injury causing permanent partial disability for which compensation is payable, the employer pays the employee compensation for a(n):

healing period

Ivy's personal auto policy provides primary liability coverage with a $100,000 limit, while her personal umbrella policy provides excess coverage with a $1 million limit. If Ivy must pay $55,000 in damages because she is responsible for an auto accident:

her personal auto policy will pay $55,000

Arnold's Auto Repair Shop's garage policy does NOT cover it for loss sustained by a vehicle that it

is painting for a customer

Acting on reliable information, the Commissioner decides to take immediate action against two insurance companies suspected of illegally fixing premium rates for a class of insureds. Which disciplinary measure will the Commissioner take first?

issue a cease and desist order

Because the Bender Insurance Company insures a large number of similar convenience stores against fire:

it can predict its losses with much more accuaracy than if it insured only a few stores

Chris did not pay the premium to renew his personal auto insurance policy at the end of its term. What will happen to the policy on its expiration date?

it will automaticall terminate

Tyler accompanies Janelle while she visits their employer's customers. Janelle's company car has liability coverage under their employer's business auto policy (BAP). She crashes into a lamppost and Tyler is injured. He sues Janelle for his injuries. How will the BAP treat his lawsuit

it will not cover the loss because of the fellow employee exclusion

Which of the following is clearly not a rebate in an insurance transaction?

reducing premiums due to an insurers favorable claims experience

Which of the following would not be considered a prohibited rebate in an insurance transaction?

reducing premiums due to aninsurers favorable claims experience

In insurance terms, the basic state of being subject to a possible loss is called:

risk

The property and casualty underwriting process generally involves all the following steps EXCEPT:

risk analysis by the producer

Roberto works for an organization that places excess and surplus lines insurance coverage with nonadmitted insurers. What is Roberto's employer?

surplus lines broker

Vicky's business is located in a state that requires uninsured motorists coverage. What symbol will indicate this coverage in her business auto policy (BAP)?

symbol 6

a workers compensation insurance policy with Outer Continental Shelf LAnd act Coverage endorsement excludes coverage for workers subject to all the following legislation EXCEPT:

the Outer Continental shelf Lands act

Cheri's car is stolen. The car had an actual cash value of $5,000. She wishes to replace it and locates three similar cars for sale at $4,500, $5,000, and $5,500. How much will her insurer pay for her loss?

$4,500

Kristie opens the remote-controlled gate to the mansion where she lives to allow her friend Marta to enter the grounds. An uninvited vacuum cleaner salesman follows Marta through the open gate. Kristie's watchdogs are trained to attack intruders, and they injure both Marta and the salesman. Which of the following statements is true?

Kristie has less of an obligation to the uninvited salesman than she has her invited friend Marta

Which of the following items constitutes personal property?

a houses refrigerator

Public officials in the village of Castle Heights are covered under the same public officials bond, and each of the bonded officials is identified by name within the bond. What kind of bond is Castle Heights' public official bond?

a name schedule bond

A combination of toxic fumes and debris from an explosion at a paint supply store forces the evacuation of nearby homes and damages several automobiles. It also damages a neighboring computer repair shop where Quincy delivered his personal computer for repairs. Smoke and water destroy the hard drive containing files in which Quincy stored manuscripts for his doctoral thesis. Under the store's CGL policy, which does NOT qualify as property damage?

destruction of the manuscripts

The residual market is most often the source of coverage for all of the following lines of insurance EXCEPT

directors and officers lability insurance

Which of the following is not a prohibited marketing practice when selling insurance?

discrimination among risks

Who has the right to choose the care provided to an injured employee who is covered by workers compensation insurance?

employer

How often must insurance producers licensed in Iowa fulfill continuing education requirements to maintain their licenses?

every 36 months

All the following are regarded as illegal practices by insurance producers EXCEPT:

explaining the terms or conditions of a recommended insurance policy

An "ordinance or law" exclusion in a property insurance policy deals with:

extra expenses required to comply with current building codes when repairing damaged property

Which of the following employers would most likely have the highest workers compensation rate classification?

factories

In a few states (North Dakota, Ohio, Washington, and Wyoming), employers are required to purchase workers compensation coverage through a state workers compensation insurance fund. What are these state funds called?

monopolistic state funds

In the context of a property or casualty insurance policy, which of the following is considered to be personal property?

moveable gas grill

Celia put her laptop computer in the overhead bin of an airplane, discovered it was missing when she got ready to depart the plane at the end of the flight, and concluded it had to have been stolen. This type of theft is called:

mysterious disappearance

Zelda, a property and casualty insurance producer, assures a prospective applicant that the insurance company she represents is backed by the protections of the Iowa Insurance Guaranty Association. This kind of assurance is

prohibited at all time

When comparing her insurance company's policies to those of Zenith Insurance, Melanie makes a misleading statement to convince an insurance prospect to terminate a policy with Zenith and buy one from Melanie's company. What prohibited practice has Melanie engaged in?

twisting

Olen buys insurance on the inventory in his warehouse, which includes a sizable quantity of watches bearing the "Rolex" label, and Olen pays the insurance premium. After Olen reports a theft, the insurer's investigation reveals that the watches it had agreed to insure were illegal counterfeits. Olen's contract with the insurer is

unenforceable because it was for an illegal purpose

In Iowa, what is the minimum required limit in an auto insurance policy for property damage coverage?

$15,000

Florist has a business auto policy with a $300,000 limit, and a commercial umbrella policy with a $1 million limit and a $10,000 self-insured retention. While driving the company van, Florist's driver rear-ended a school bus. The injured bus passengers' claims and damage to the bus result in a $500,000 judgment against Florist. How much will be paid by the insurer that issued the umbrella policy?

$190,000

An employee is entitled to temporary partial benefits during the period of temporary partial disability. What percentage of the difference between the employee's weekly earnings at the time of injury and the employee's actual gross weekly income from employment will the employee receive?

66.66 percent

Compensation for an injury causing permanent total disability is based upon what percentage per week of the employee's average spendable weekly earnings?

80 percent

When an independent contractor discovered he had asbestosis, he submitted a workers compensation claim to Iva Builders, the contractor that employed him. Iva's risk manager submitted the claim to its insurer, but asserted that the contractor got the disease elsewhere and told the insurer to refuse the claim. Which of the following statements is true?

The insurer has a right to investigate and settle the claim regardless of Iva's consent

Pamela lives in a state with a financial responsibility law. When will she be required to prove she has auto liability insurance?

after it is involved in serious traffic violation or accident

Cody's employer furnishes him with a company car for both business and personal use. His wife, Deanne, has her own car but sometimes drives the company car. Adding the extended nonowned coverage endorsement to Deanne's personal auto policy (PAP):

applies the liability and medical payments coverages to Cody while driving the company car

Matt, a parcel delivery driver, delivers a package to Christa's front porch where he is attacked by Christa's bulldog. In determining the degree of care that Christa owed to Matt, how would the courts probably classify Matt?

as an invitee

Even though Beverly has homeowners, personal auto, watercraft liability, and other liability policies, she might also want to buy a personal umbrella policy to protect against:

catastrophic liability losses

Which is least likely to be considered a "covered auto" in a personal auto policy (PAP)?

commercial tractor trailer combination

Greg died as a result of his work-related injury and is survived by his wife and no children. What amount of death benefit will his wife receive?

compensation based on 80 percent of his average weekly spendable earnings

Rhonda's parents bought her a car for her sixteenth birthday and made her responsible for maintaining and insuring it. However, when Rhonda applied for auto insurance after getting her driver's license, she was told that she could not enter into a binding insurance contract because, according to the law in her state, a 16-year-old does not qualify as a(n)

competent party

Jock was a professional athlete who was permanently disabled while playing football. Upon what will his workers compensation be based?

other occupations he previously performed or was reasonably suited to person at the time of the injury

Which of the following persons would not qualify for a temporary producer's license in Iowa?

part time producer of licensed agency

Phoebe rents her home. She loses control of her car on the icy driveway and crashes into the garage door. It will cost $1,000 to repair or replace the door. The property damage liability coverage of Phoebe's personal auto policy will:

pay for the damage

Which of the following acts would not be considered rebating?

paying a personal visit to induce a person to buy insurance

From an insurance perspective, the items inside a house, in a yard, and in a suitcase when the insured travels is considered to be:

personal property

Which of the following is not a power granted to the Iowa Insurance Commissioner?

prosecuting inviduals for violating the insurance laws

When the front fenders of Bobbie's coupe were damaged in an auto accident, his insurer arranged to replace them with non-original equipment manufacturer (non-OEM) parts. Why does the insurer use non-OEM parts?

to help minimize the cost of repairs and the cost of insurance