Law Supplement Practice Exam

How many hours of continuing education must a producer complete every 2 years?

24

When a personal fire insurance policy is cancelled because the insured's negligent acts increase the hazard insured against, how many days' notice must be provided to the insured?

30

An insurer must notify an insured at least how many days before increasing the premium on a commercial casualty insurance policy?

30 days.

When an automobile policy is cancelled for a reason other than nonpayment of premium, how many days' notice must be provided to the insured?

60 days.

An employee who suffers a total disability is entitled to payment of what % of his average weekly earnings?

66.7%.

Under workers' compensation law in PA, the awaiting period which must be satisfied before benefits are payable is:

7 days.

This individual is entitled to workers' comp benefits

Anna, who is injured because of her co-worker's negligence.

A new HO is being forced to buy insurance from a particular insurer as a condition of receiving a mortgage. The lender is guilty of:

Coercion of borrowers.

This insurance option lets the insured seek recovery for all medical and other out-of-pocket damages, pain and suffering, and other nonmonetary damages as a result of injuries caused by other drivers

Full tort option.

Susan's producer license lapsed because she forgot to pay her licensing renewal fee 10 days after it was due, so:

Her license may be reinstated if she makes a request for reinstatement and submits the renewal application, the registration fee, and continuing education certification.

This provides motor vehicle insurance to those applicants who would otherwise be uninsurable

PA Auto Insurance Plan.

When an employer must provide workers' comp insurance but is unable to do so through normal channels, which org. can provide the required coverage?

State workers insurance fund.

This is a covered peril under a Mine Subsidence policy

Sudden discharge of water from an abandoned mine.

1. being less than 18 2. failing to satisfy prelicensing requirements 3. failing to pay all applicable fees

The department of insurance may deny an application for a producer's license for all of these reasons:

Uninsured and Underinsured motorist coverage in PA:

The insured may reject both types of coverage by signing a waiver form.

This employee is covered by PA workers' comp laws:

a full-time secretary at a church.

This must comply with the continuing education requirements

a licensee for property insurance only.

Rebating

an applicant for insurance who knowingly shares a producer's commission in return for purchasing a policy is guilty of:

A producer who converts premiums for his own use most accurately describes:

breach of fiduciary duty.

The commissioner may

conduct investigations and subpoena witnesses whenever he deems it necessary.

An applicant for a resident producer license may:

either reside in PA or have their principal place of business in this state.

Diane, who is applying for a property and casualty license and is a licensed real estate broker

is required to take the licensing examination as an applicant for a producer's license.

A person may not act as a PA insurance producer unless that person is

licensed in the line of authority under which a contract is issued.

Nonrenewal of automobile policies:

need at least 60 days; written notice must be given prior to nonrenewal.

The purpose of the PA Property and Casualty Insurance Guaranty Association is to:

protect the public by paying legitimate claims when the insurer is insolvent.

Under PA law, an insurer may do this with regard to the provision of uninsured motorists coverage?

provide coverage for the same amount as the policy's BI liability limits.

Defamation

statements made by a producer which are false and derogatory with regard to the financial condition of another producer would be considered this.

When an insurer terminates a producer's appointment, the insurer must notify

the commissioner and producer.

Nonresidents may be licensed to sell insurance in PA under this circumstance:

they hold a valid license in their state of residence.

All owners of motor vehicles in PA must have in effect at least the following legal liability coverage for bodily injury or death arising out of the use of the motor vehicle to a limit of what amount?

$15,000 to any one person in any one accident.

If Bob dies as a result of an accident while working in a coal mine, what amount is payable for his reasonable funeral and burial expenses under PA/s workers' compensation laws?

$3,000.

According to PA law, first-party benefits provided by an auto policy must include minimum coverage for medical benefits in the amount of:

$5,000.

A temporary license may be issued to these individuals:

1. surviving spouse of a deceased producer in order to sell the business. 2. a deceased producer's personal representative until new personnel is trained to run the business. 3. a person holding a power of attorney for a producer in the armed forces.

Benefits provided under a workers' comp policy:

1. total disability. 2. medical benefits. 3. partial disability.

If an insured's driver's license has been suspended, the insurer may cancel the automobile insurance policy by giving how many days' notice?

15 days.

Minimum limits of liability any individual must provide for bodily injury and property damage?

15/30/5.

Illegal insurance practices in PA

1. soliciting or procuring insurance without a license. 2. paying a fee for services as an insurance producer to anyone who is not properly licensed. 3. using insurance premiums for a producer's personal uses.

Exempt from the continuing education requirements in PA

1. a licensee which is a business entity. 2. a licensee with only a limited line of authority. 3. a nonresident licensee who has satisfied the continuing education requirements of the licensee's home state.

Correct statements regarding the payment of commissions

1. a producer may share commissions with another licensed producer. 2. a producer may not share commissions with unlicensed persons. 3. a producer may not charge additional fees not included in his commissions for soliciting and procuring insurance or for servicing existing policyholders.

Covered under the PA workers' compensation law:

1. accidental injuries suffered while working at an employer's site. 2. traumatic injuries suffered while making a delivery for an employer. 3. lung-related illness resulting from exposure to carcinogens during employment.

The PA Insurance Guaranty Association:

1. all insurers must participate in the association as a condition of their authority to write property and casualty insurance policies in the state. 2. it is illegal to advertise the existence of the association as an inducement to purchase insurance. 3. it helps in the detection and prevention of insurer insolvencies.

Violations of PA insurance law

1. charging individuals of the same class different premium rates. 2. offering tix to a football game as an incentive to purchase a policy. 3. having an interdependent arrangement to sell stock to a person contingent upon the purchase of a policy.

Crop Insurance elements:

1. crop insurance does not apply until a crop is visible above the ground. 2. multiperil crop insurance is written on an open-perils basis. 3. vulnerability of specific crops is factored into rating.

An automobile policy may be cancelled these reasons:

1. failure of the insured to pay the policy premium. 2. suspension or revocation of the insured's driver's license. 3. making a false statement in the insurance application.

License suspension:

1. intentionally violating a cease and desist order. 2. making a false statement in a license application. 3. violating an insurance regulation.

These are powers and duties of the Insurance Commissioner

1. issuing cease and desist orders 2. conducting complaint hearings 3. appointing examiners

General guidelines given to insurers when developing rates for various insurance products include:

1. not excessive. 2. adequate. 3. not unfairly discriminatory.

To cancel residential property insurance in PA, an insurer must do this:

1. notify the insured of the specific reasons for the cancellation. 2. provide at least 30 days' written notice. 3. advise the insured of his possible eligibility for property coverage under the FAIR Plan.

Examples of Unfair Claim Settlement Practices

1. requiring both a claimant and his physician to fill out extensive proof of loss forms. 2. denying a claim promptly without explaining the coverage or laws on which the denial is based. 3. denying a claim without making an investigation.