STUDY THIS: Property Insurance Test PearsonVue (LAW)
A licensed insurer must be examined by the Commissioner at least every ______ year(s). A. 1 B. 3 C. 5 D. 7
5
What is the minimum advance written notice an insurer must provide to a policy holder before canceling a commercial property or casualty policy for nonpayment of premium? A. 10 days B. 15 days C. 30 days D. 45 days
A. 10 days
After an insurer receives a satisfactory proof of loss from an insured on a fire loss, payment is due within a MAXIMUM of how many days? A. 5 B. 30 C. 60 D. 90
A. 5
Which of the following is true regarding insurance and loans secured by real property? A. A lender cannot require a borrower to provide hazard insurance insurance on the property for more than the replacement cost of the property B. A lender can require a borrower to provide hazard insurance coverage on the property in an amount exceeding the replacement cost of the property C. A person harmed by a violation of this rule can recover damages, but not attorney fees and costs D. Lenders cannot require borrowers to provide hazard insurance on property secured by a loan
A. A lender cannot require a borrower to provide hazard insurance insurance on the property for more than the replacement cost of the property
Each of the following is a component of the legal responsibility of maintaining an insurance license, except: A. A producer must register any assumed name in writing to the Commissioner within 30 days of use B. A producer must inform the Commissioner of any change in address within 30 days C. An insurer must notify the Commissioner within 30 days of terminating a producer's appointment D. The producer must be given a copy of the termination within 15 days of the Commissioner's notification, but has 30 days to file comments about that termination with the Commissioner
A. A producer must register any assumed name in writing to the Commissioner within 30 days of use
Which of the following is a reason an insured can increase a property or casualty policy's premium or decrease its coverage during a policy period? A. Material misrepresentation B. A change of the insured's occupation C. A change in the insured's name D. The insured prepaid the premium
A. Material misrepresentation
Each of the following are an example of boycott, coercion, or intimidation, except: A. Offering a premium discount or credit that is not specified in the policy B. Unreasonably disapproving a policy that provides requisite coverage C. Coercing a debtor into getting requisite insurance through a particular age D. Requiring a mortgager to pay a handling charge on a policy required to secure a loan
A. Offering a premium discount or credit that is not specified in the policy
The definition of a Colorado producer includes which of the following: A. a person who solicits or negotiates membership enrollments in a health care plan B. A nonresident licensed to sell or negotiate commercial property and casualty insurance policies in another state C. An insurer D. An employer, association, or trustee administering its own employee benefit program that uses insurance
A. a person who solicits or negotiates membership enrollments in a health care plan
An incorporated insurer with capital divided into shares and owned by its shareholders is known as: A. a stock company B. a mutual company C. a fraternal benefit society D. an association group
A. a stock company
The insurance commissioner is empowered to: A. enforce state laws relating to insurance B. pass state laws relating to insurance C. write policy forms for mandatory insurance coverages D. set rates for mandatory insurance coverages
A. enforce state laws relating to insurance
To obtain coverage from this state's FAIR Plan, an applicant MUST A. show that a diligent search was made through established markets B. apply at least thirty days prior to the desired effective data of the coverage C. pay a premium surcharge based on the applicants past claims experience D. pay a premium surcharge based on the type of property to be insured
A. show that a diligent search was made through established markets FAIR plan source: Established markets
If the insurer is unilaterally increasing premiums or decreasing benefits at the renewal of a commercial policy, the named insured must be notified ______ days before the renewal. A. 30 B. 45 C. 55 D. 60
B. 45
The insurer must give the named insured at least ______ days' notice to nonrenew a commercial policy that has been in effect 60 days or more. A. 30 B. 45 C. 55 D. 60
B. 45
With respect to a producer's fiduciary responsibilities and duties, the agent must do all of the following, except: A. Remit premiums received to the insurer on or before the due date, or within 45 days if there is no due date B. Account for any collected premiums within 45 days after the policy due date or within 90 days after receipt C. Remit to the insured any unearned premiums received from the insurer within 30 days, or within 45 days of cancellation D. Maintain separate bank accounts for all insurers represented
B. Account for any collected premiums within 45 days after the policy due date or within 90 days after receipt
Which of the following is incorrect with regard to insurance rates in Colorado? A. Rates must not be excessive, inadequate, or unfairly discriminatory B. Considering past and prospective loss experience when setting rates is unfairly discriminatory C. Workers' Compensation and assigned risk auto are related by prior filing and approval D. Type II coverages are regulated by open competition, meaning that prior approval is not required
B. Considering past and prospective loss experience when setting rates is unfairly discriminatory
The Insurance Commissioner may suspend, revoke, or deny a producer's license for all of the following reasons EXCEPT: A. Untrue statements on the license application B. Conviction of a misdemeanor C. Incompetency D. Coverting funds
B. Conviction of a misdemeanor
The Commissioner can refuse, suspend, revoke, or nonrenew a license if the licensee has committed any of the following, except: A. Failed to pay child support B. Issued insufficient coverage to a customer through apparent authority C. Had a license suspended or revoked in another state D. Cheated on an insurance examination
B. Issued insufficient coverage to a customer through apparent authority (Explanation in book: Being convicted of a felony, misappropriating funds belonging to someone else, demonstrating a lack of trustworthiness or competence, or committing an unfair trade practice are also grounds for license suspension, non-renewal or revocation)
All of the following apply to a Summary Disclosure form, except: A. Each insurer must file a Summary Disclosure Form for dwelling, fire homeowners, or auto coverage with the Division B. The producer must provide the form with 30 days of purchase if doing so by mail C. Producers and insurers must have an insured's express consent to add optional or enhanced coverage, other than UM/UIM or medical payments, that increases the premium D. Specify who initiated optional coverage, and keep the consumer consent on file for at least 3 years
B. The producer must provide the form with 30 days of purchase if doing so by mail (it's actually 48 hours, not 30 days)
Under the standard flood insurance policy, all of the following loss avoidance measures are covered up to $1,000 when damage to the insured property due to flooding is imminent EXCEPT: A. sandbags, including the sand to fill them B. Tools required to secure the property C. plastic sheeting and lumber D. the value of work, at the federal minimum wage, that a member of the household performs
B. Tools required to secure the property
Which of the following situations is considered an insurance transaction? A. Two insurance companies share actuarial data B. Two parties negotiate the term of coverage when executing an insurance contract C. An independent audit company reviews a domestic insurer's records for a fee D. An insured sends a policy to the bank in preparation for a mortgage closing
B. Two parties negotiate the term of coverage when executing an insurance contract
An insurer that generally fails to affirm or deny coverage of claims within a reasonable period of time after receiving Proof of Loss may be found guilty of: A. a breach of fiduciary responsibility B. an improper claims practice C. defamation D. misrepresentation
B. an improper claims practice
In order to be reimbursed for a covered loss under a Standard Fire policy in this state, an insured MUST: A. contact an independent claims adjuster B. protect the property from further loss C. provide a proof of loss statement within 10 days D. obtain a written appraisal of the damages
B. protect the property from further loss
If an owner-occupied dwelling is totally destroyed without criminal fault on the part of the insured, the amount of the loss covered by a property policy would be based on: A. a depreciated value of the dwelling B. the policy limits C. the market value of the dwelling D. the assessed value of the dwelling
B. the policy limits
An insurer that permits different rate classifications for individuals of the same class and same hazard may be guilty of A. boycotting B. unfair discrimination C. misrepresentation D. defamation
B. unfair discrimination
How much is the penalty for a negligent violation per accident and max per year? A. $1,000 per accident, $5,000 max per 12 months B. $20,000 per accident, $750,000 max per 12 months C. $3,000 per accident, $30,000 max per 12 months D. $30,000 per accident, $750,000 max per 12 months
C. $3,000 per accident Unintentional 3k up to 30k Intentional 30k up to 750k
A candidate for licensure as a property insurance producer must have completed a MINIMUM of how many hours of prelicensing education? A. 45 B. 30 C. 15 D. 7.5
C. 15 Prelicensing: 15 hrs Continuing education: 24 hrs in 24 mo
The Insurance Commissioner is: A. Appointed by the President of the NAIC B. Appointed by the Governor and confirmed by the State Senate C. Appointed by the State Senate and confirmed by the Governor D. Elected through public nominations
C. Appointed by the State Senate and confirmed by the Governor
Obtaining an insurance license for the sole purpose of writing insurance on the life or property of one's employer constitutes which of the following? A. Rebating B. Redlining C. Controlled business D. Discrimination
C. Controlled business
When using credit information, an insurer offering personal property and casualty insurance can not: A. Use an insurance score based on the consumer's age, driving record, vehicle use, annual mileage, territory, and liability limits selected B. Consider an absence of credit information or the inability to calculate an insurance score when underwriting or rating insurance C. Decline a policy based solely on credit information D. Use a credit report or insurance score obtained with 90 days of a policy's issue or renewal date
C. Decline a policy based solely on credit information
Who is required to prepare, implement, and maintain an insurance anti-fraud plan when transacting insurance in Colorado? A. Every licensed producer B. Every licensed third party administrator C. Every licensed insurer D. Every licensed managing general agent
C. Every licensed insurer
Which of the following is correct regarding unauthorized entities? A. An unauthorized insurer's act or contract is invalid because it is not authorized to transact insurance business B. The Commissioner is required to issue a Cease and Desist Order stating charges if an unauthorized person is transacting insurance C. Every person acting as an insurance adviser, counselor, or analyst must report every policy issued by an unauthorized insurer to the Commissioner D. A claims adjuster is not required to report unauthorized business to the Commissioner
C. Every person acting as an insurance adviser, counselor, or analyst must report every policy issued by an unauthorized insurer to the Commissioner
Upon determining that a producer has violated the insurance law, the Insurance Commissioner is required to take which of the following actions? A. Place the licensee on probation immediately B. Publish notice of the violation C. Hold a hearing on the infraction D. Submit the infraction to the Department of Insurance for review
C. Hold a hearing on the infraction
Coverage of goods in transit is usually provided by which of the following types of insurance? A. Casualty B. Surety C. Inland marine D. Automobile
C. Inland marine
The Insurance Commissioner may issue a limited insurance representative license to an individual who wants to sell which of the following types of policies? A. Fire B. Automobile C. Mortgage Guaranty D. Health
C. Mortgage Guaranty
The Fraudulent Claims and Action Information Reporting Act requires all the following, except: A. When an insurer suspects arson in connection with a fire loss, it must notify the local fire department or other investigation bureau B. Any person violating this Act commits a Class 2 misdemeanor C. No person or insurer is immune from civil liability when acting in good faith to comply with a court order or furnish evidence to an agency of the federal, state, county, or municipal government D. An insurer may be required to produce an insured's claim or payment history, or any proof of loss the insured submitted
C. No person or insurer is immune from civil liability when acting in good faith to comply with a court order or furnish evidence to an agency of the federal, state, county, or municipal government
Which of the following is NOT an unfair claims practice? A. Misrepresenting pertinent policy facts or provisions to claimants B. Excluding medical benefits under health coverage solely because the individual uses a motorcycle, snowmobile, off-highway vehicle, skis, or a snowboard C. Promptly acknowledging communications pertinent to a claim D. Failing to attempt, in good faith, to promptly, fairly, and equitably settle a claim in which the insurer's liability has become reasonably clear
C. Promptly acknowledging communications pertinent to a claim
Which of the following persons may assign a Standard Fire policy? A. A claims adjuster B. The Superintendent of Insurance C. The insured with the permission of the insurance company D. The insured only
C. The insured with the permission of the insurance company
An insurer can refuse to issue a fire policy for property in a federally designated disaster area prone to wildfire based on what condition? A. Drought B. Zip code C. The property is located in an immediately threatened area D. The property is located in potentially threatened area
C. The property is located in an immediately threatened area
An insurance producer license is at all times considered property of who/what? A. Your property B. The property of the insurance company under which you operate C. The property of the State of Colorado D. None of the above
C. The property of the State of Colorado
Producers can receive the following forms of compensation for soliciting, procuring, or servicing policies: A. Administrative fees, in addition to commissions B. Service fees, in addition to commissions C. Consulting fees, in addition to commissions D. Commissions from an insurer
D. Commissions from an insurer
The Commissioner can impose a penalty for all of the following, except a person who has: A. Surrendered his/her license B. Not surrendered his/her license C. Engaged in an unfair trade practice D. Failed to pass the licensing examination
D. Failed to pass the licensing examination He's not an insurance producer so he can't be determined by commissioner
All of the following are true about surplus lines insurance, except: A. Within 30 days, surplus lines producer must file an affidavit with the Commissioner describing coverage placed with a non-admitted insurer within 30 days B. To write surplus lines insurance in Colorado, a non-admitted insurer must be on the Commissioner's approved list that is issued each year on July 1 C. The written record documenting the search for admitted insurance must be maintained by the producer for at least one year from the effective data of coverage D. Each surplus lines produce must remit a 3% tax on the previous year's surplus lines premiums on or before March 1st of each year.
C. The written record documenting the search for admitted insurance must be maintained by the producer for at least one year from the effective data of coverage (Answer in the book: A written record documenting diligent search efforts must be maintained by the producer for at least 3 years from the effective date of coverage and not one year from the effective dates)
All of the following items contained in a basement are covered under the standard flood insurance policy EXCEPT: A. drywall for walls and ceilings and the cost of labor to nail it, unfinished and unfloated and not taped to the framing B. functioning electrical outlets and switches C. carpet permanently installed over unfinished flooring D. fuel tanks, if installed in their functioning locations and connected to a power sources
C. carpet permanently installed over unfinished flooring
If a commercial insurer fails to meet the requirements of the forty-five days Notice of Nonrenewal Rule prior to the expiration date of the existing policy, the company MUST A. extend the current policy for one year and waive the premium B. reduce coverage to develop a new premium that does not exceed the expiring policy's premium C. provide a renewal policy that matches the expiring policy's coverages and premium D. pay a $3,000 fine per violation to the Division of Insurance
C. provide a renewal policy that matches the expiring policy's coverages and premium 재계약기간(계약만료일) 45일 전 통보 하지않았을 경우 기존 계약과 같은조건의 상품을 제공해야함
All insurance advisers, counselors, or analysts must report every policy issued by an unauthorized insurer to _______________. A. the NAIC B. the attorney general C. the commissioner D. the police
C. the commissioner
How much is the penalty for a willful violation per accident and max per year? A. $1,000 per accident, $5,000 max per 12 months B. $20,000 per accident, $750,000 max per 12 months C. $3,000 per accident, $30,000 max per 12 months per accident and max per year D. $30,000 per accident, $750,000 max per 12 months
D. $30,000 per accident, $750,000 max per 12 months
After an insurance producer license is issued, a licensee MUST complete how many hours of approved continuing education courses every two years? A. 10 B. 15 C. 20 D. 24
D. 24
If a producer is the subject of criminal prosecution in any jurisdiction, the producer must report to the Commissioner after the initial pretrial hearing date within: A. 60 days B. 12 months C. 10 days D. 30 days
D. 30 days
The purpose of the FAIR Plan is to provide: A. automobile insurance for high-risk drivers B. crime insurance for residents of high-risk neighborhoods C. property insurance on recreational vehicles for which such coverage is unavailable in the regular market D. Basic property insurance for which coverage is not available in the regular market
D. Basic property insurance for which coverage is not available in the regular market
Each of the following are requirements for licensure, except: A. Residency in Colorado B. Residency in a state to which Colorado grants nonresident licenses C. Passing the state licensing examination D. Being at least 21 years of age
D. Being at least 21 years of age
The Commissioner is going to send a cease and desist order to a producer. How must it be delivered? A. Email B. By telephone call C. In person D. First-class certified mail
D. First-class certified mail
Concerning license suspension and revocation, the Commissioner can take all of the following actions, except: A. Notify the producer of any license suspension, revocation, or termination B. Notify the NAIC of any license suspension, revocation, or termination C. Notify the Attorney General or District Attorney of criminal violations of the insurance code D. Impose a civil penalty of $1,500 per violation, up to $10,000 per fine in addition to or in lieu of, license termination
D. Impose a civil penalty of $1,500 per violation, up to $10,000 per fine in addition to or in lieu of, license termination A civil penalty can be imposed not to exceed $3,000 per violation.
All of the following are powers and duties of the Commissioner, except: A. Issuing, denying, revoking, or suspending insurance licenses. B. enforce state insurance laws C. Ensuring that insurance rates are adequate D. Performing all duties in the best interest of independent insurance agent
D. Performing all duties in the best interest of independent insurance agent
An insurer that intends to nonrenew a Homeowners policy MUST take which of the following actions? A. Obtain coverage for the policyholder from another insurer B. Obtain coverage for the policyholder under the FAIR Plan C. Send a nonrenewal notice to the Commissioner of Insurance thirty days prior to the policy expiration date D. Send a notice stating the reason for nonrenewal to the insured
D. Send a notice stating the reason for nonrenewal to the insured
The following definitions apply to the use of credit information in personal lines insurance, except: A. Adverse action B. Credit report C. Insurance score D. Title element
D. Title element
Refusing to insure or renew, canceling, or limiting the amount of coverage on the residential property risk or personal property solely because of the age of the residential property is considered to be: A. Coercion B. Defamation C. Unfair claim practice D. Unfair discrimination
D. Unfair discrimination
XYZ Insurance Company recently received its certificate of authority to sell property insurance in Illinois. XYZ is an Iowa insurer but will sell its products through its licensed Illinois producers. Which of the following statements is CORRECT about XYZ Company's involvement in the FAIR Plan? A. XYZ may not join the FAIR Plan, because it is a foreign company B. XYZ may not join the FAIR Plan, because its producers are licensed in Illinois C. Membership in the FAIR Plan is optional for XYZ D. XYZ must belong to the FAIR plan because it has a certificate of authority to sell homeowners insurance in Illinois
D. XYZ must belong to the FAIR plan because it has a certificate of authority to sell homeowners insurance in Illinois
An individual appointed by an insurer to solicit applications for a policy of insurance or to negotiate a policy on its behalf is known as: A. an adjuster B. a consultant C. an insurance broker D. an insurance producer
D. an insurance producer
In this state, a domestic insurer is defined as a company that: A. Operates in this state but is incorporated in another state B. operates in this state but is domiciled in another state C. is headquartered in this state D. is incorporated in this state
D. is incorporated in this state
Making false or misleading statements about dividends or shares of surplus previously paid on an insurance policy is known as: A. unfair discrimination B. rebating C. coercion D. misrepresentation
D. misrepresentation