P&C Licensing Exam Review

The Insurance Commissioner is: Appointed by the Secretary of State Elected every 4 years Appointed by the Governor Appointed by the President of the NAIC

Elected every 4 years. The NAIC does not appoint any insurance commissioners. The commissioner is not appointed, but is elected in a general election.

What are the minimum liability limits required for personal auto coverage in Louisiana?

$15,000/$30,000/$25,000

Coastal Plan:

- ALL insurers that write property insurance in the state must participate -The plan provides coverage for properties in LA coastal areas -A structure must comply with the Standard building code, including the design wind requirements to be covered -A person must have an insurable interest in insurable property to be entitled to apply for coverage and inspection of the property.

With respect to loss payments for property damage claims:

- An insurer must pay a claim within 30 days after receiving proof of loss -An insurer must initiate loss adjustment of a claim within 14 days -an insurer that fails to pay a claim within the required time frame may be penalized the greater of 50% of the amount due or $1,000

Commissions & Compensation:

- Renewal commissions may be paid to a person for selling or negotiating insurance in this state if the person was required to be licensed at the time of the sale or negotiation, and was licensed at that time - An insurer or producer may pay commissions to a duly licensed producer for negotiating, soliciting, or effecting insurance contracts -An insurer or producer may not pay a commission to a person for selling, soliciting, or negotiating insurance in this state if that person is required to be licensed and is not licensed. -An insurer may not pay a commission to an unlicensed producer, regardless of any appointment.

True regarding a nonresident license:

-A person residing in another state may be licensed as a nonresident producer if the person is currently licensed in his/her home state -A person residing in another state may be licensed as a nonresident producer if the person's home state issues nonresident producer licenses to Louisiana residents on a reciprocal basis -A person residing in another state may be licensed as a nonresident producer if the person is currently in good standing in his/her home state

Qualifications required for a product license:

-Pass a licensing examination for each line of insurance to be transacted -Have not committed any act that is grounds for denial, suspension or revocation of license -Pay the required license fee

What is the minimum amount of notice an insurer must provide to a policy holder in advance of cancelling a commercial policy for nonpayment of premium?

10 days- an insurer must provide at least 10 days notice to a policyholder in advance of cancelling a commercial policy for nonpayment of premium, regardless of whether the policy has been in effect for 60 days.

An insurer must file a notice of appointment with the commissioner within:

15 days after the date of the agency contract is executed. An insurer must file a notice of appointment with the commissioner within 15 days after the date the agency contract is executed.

How many credit hours of continuing education must a producer complete every renewal period?

24 (with at 3 hours in ethics) A producer must complete 24 credit hours of continuing education every renewal period with at least 3 hours in ethics.

All of the following are true regarding a nonresident license, except

A nonresident licensee may be authorized for any line of insurance for which the licensee is not authorized in his/her home state

Which of the following statements is false regarding the Coastal Plan?

A person does not need an insurable interest in property to apply for coverage (A person must have an insurable interest in insurable property to be entitled to apply for coverage and inspection of the property. )

Which of the following statements is correct with respect to the Named Driver Exclusion Endorsement? (PP 13 43)

Allows an insured to name specific persons in the policy as named excluded drivers (The policy will not cover damages or expenses (including medical) or loss arising out of the use of any auto by a named excluded driver. The Endorsement allows an insured to name specific persons in the policy as named excluded drivers)

Which of the following is FALSE with regard to commissions and compensation? Renewal commissions may be paid to a person for selling or negotiating insurance in this state if the person was required to be licensed at the time of the sale or negotiation, and was licensed at that time An insurer may pay a commission to an unlicensed producer who is appointed by the insurer An insurer or producer may pay commissions to a duly licensed producer for negotiating, soliciting, or effecting insurance contracts. An insurer or producer may not pay a commission to a person for selling, soliciting, or negotiating insurance in this state if that person is required to be licensed and is not licensed.

B. An insurer may pay a commission to an unlicensed producer who is appointed by the insurer ( an insurer may not pay a commission to an unlicensed producer, regardless of any appointment)

Which of the following statements is false with respect to continuing education requirements?

Credit Hours awarded in a compliance period may not be carried over to another renewal period (False bc up to 10 credit hours awarded in a compliance period may be carried over or applied to any other renewal period. )

If a producer lies and tells their prospective consumers another insurance company is insolvent with the intent to put the insurer out of business, that is an example of which unfair trade practice?

Defamation- making any false statement maliciously critical of, or derogatory to, any insurers financial condition with the intent to injure someone in the insurance business.

Which of the following statements is false with respect to the Insurance Guaranty Association? Every insurer admitted to transact property and casualty insurance in Louisiana has the option of being a member of the Association Up to $500,000 per policy for claims; full amount for Workers' Compensation Member insurers are assessed the amounts necessary to administer the program and pay covered claims The purpose of the Act is to establish a method to pay claims that are unpaid as a result of the insolvency of a member insurer

Every insurer admitted to transact property and casualty insurance in Louisiana has the option of being a member of the Association (Every insurer admitted to transact property and casualty insurance in Louisiana must be a member of the association)

An insurer's annual statement is due to be filed by:

March 1st, Quarterly statements are due by May 15, August 15, and November 15.