Ch. 15: State Laws
A new policy form must be submitted to the Commissioner at least _____ days before the date the policy form will be used.
60
A new policy form must be submitted to the Commissioner at least _______ days before the date the policy form will be used.
60
In Texas, classroom continuing education course credit hours will only be granted to licensees who complete what percentage of the course?
90%
An insurance license may be suspended for all of the following infractions, except: A Over-insuring a property insurance risk B Cheating C Conviction of a felony D Rebating
A
False advertising, misrepresentation, and defamation are all examples of which of the following? A Unfair Methods of Competition B Unfair Claims Methods C Unfair Marketing Practices D Unfair Claims Practices
A
If the Department issues a temporary agent license, for how many days is it valid? A 90 days B 30 days C 180 days D 60 days
A
How many days' notice must the Commissioner provide before revoking an insurer's Certificate of Authority?
10
General Property and Casualty agents must complete ______ continuing education hours each renewal period.
24
The death benefit amount is _____ % of the employee's average weekly wage.
75
Which of the following is NOT a fiduciary duty of an agent? A Keep premium funds in a trust account separate from other funds B Serve the best interests of the insurer C Recommend the most profitable coverage for the agent D Forward premiums collected from the insured to the insurer on a timely basis
C
Which of the following persons may renew his insurance license? A Michael, whose license expired 6 months ago B Timothy, whose license expired 2 years ago C Brendon, whose license expired 30 days ago D Donald, whose license was revoked
C; no more than 90 days
Choose the act involving the agent and insured that is not part of a homeowner insurance transaction. A Deliver contract B Collect premium C Negotiate rate D Give proposal
C
How much may the Department fine an education provider for failing to issue a course completion certificate within 30 days of completion?
$100
Compensation for a temporary disability is payable up to how many weeks following an injury?
401
After the 60-day underwriting period, an insurer cannot cancel a personal auto policy for which of the following reasons? A The spouse's driver's license was suspended B Non-payment of the policy premium C The insured submitted 3 claims in the past 5 years D The insured submitted a fraudulent claim
C
An employee's average weekly wage is calculated on which basis? A The previous calendar year's earnings B The wages paid during the 3 weeks after the injury C The wages paid during the 13 weeks before the injury D The previous week's earnings
C
An agent's license expires on the _____ anniversary of the date the license was issued.
2nd
In Texas who must complete continuing education requirements? A Any agent who has been licensed in the past 5 years B Any agent who holds nonresident licenses and are in compliance with their home state's continuing education requirements C Any agent who is called to active military duty in a combat theater D Any agent who has been continuously licensed for at least 20 years
A
Which of the following is not a prohibited claims settlement practice? A Refusing to pay a claim without reasonably investigating it B Misrepresenting a material fact to a claimant C Requiring an insured to release the insurer from a claim in order to receive a partial payment D Requiring a claimant's income tax return while investigating a fire
B
After the underwriting period, an insurer is not allowed to cancel a personal auto policy for which of the following reasons? A Nonpayment of premium B Spouse's driver's license was suspended C Claim report showing 3 claims in the past 5 years D Fraudulent claim submitted by insured
C
What is the penalty for violating the Texas Transportation Code? A It is a civil infraction with a fine of up to $50,000 B It is a misdemeanor punishable by a fine up to $500, confinement in county jail up to 90 days, or both C It is an administrative issue which can lead to a public censure after a hearing has been concluded D It is a felony punishable by up to 5 years in prison
B
A Certificate of Authority is issued to an insurer for which of the following reasons? A It certifies the insurer is authorized to transact insurance in this state B It recognizes the insurer for excellence in handling claims C It certifies the insurer has passed a market conduct exam in this state D It certifies the insurer can break some laws
A
Which association covers wind and hail losses in designated areas in Texas? A FAIR B TWIA C AIP D JUA
B
The Texas Insurance Department may impose which of the following penalties for an insurer who fails to comply with a cease and desist order? A Insist that the carrier place a public notice of their failure to comply in the state's three largest newspapers based on paid subscriptions B Increase the insurance company's Guarantee Association commitment C Require the insurer to increase the volume of their business by 20% within the next fiscal year D Revoke or suspend the insurer's Certificate of Authority
D
An injury for which Workers' Compensation benefits are payable is called a(n) _____ injury.
compensable
Which of the following statements is true concerning rates and forms? A The Commissioner must approve a policy form before it is delivered B Policy forms must be filed 90 days prior to being used C Policy forms are not required to be filed if they have been adopted by a national organization of insurance companies D An agent may sell a policy form at the end of the 30-day period from the date such policy has been filed
A
An insurer is permitted to nonrenew a homeowners policy if the insured submits how many claims within a 3-year period?
3
Which of the following cannot be used to show proof of financial responsibility? A A bond B A bank account with an adequate balance C A certificate of insurance D A certificate of self-insurance
B
Which one of the following is not true regarding the Texas Automobile Insurance Plan Association? A Each auto insurer authorized in Texas must be a member of the Association to transact insurance business in the state B The Association assesses members for its operation in proportion to the volume of auto insurance premiums written by each member C The Governor may discipline a member for failing to pay an assessment D It provides auto insurance to eligible individuals who are unable to obtain insurance through standard insurance markets
C
To be eligible for supplement income benefits in Texas, a recipient must: A Have returned to work earning less than 95% of his/her average weekly wage B Elect to receive a portion of the impairment income in a lump-sum C Have at least a 5% impairment rating from the compensable injury D Actively seek employment
D
Which of the following is not one of the Commissioner's duties? A Issuing Certificates of Authority B Examining Insurers C Conducting investigations D Establishing new insurance law
D
Which one of the following scenarios would not require a person to pass a written exam in Texas in order to receive a license? A An applicant who has decided to change careers and enter into the insurance business on a full-time basis B An applicant who is re-entering the insurance business after 10 years C Any applicant who wants to sell insurance on a part-time basis only D An applicant who is seeking to obtain a temporary license
D
The Department must examine each insurance company at least once every _____ years.
5
The Department of Insurance must examine each insurance company at least once every ______ years.
5
The Texas Automobile Insurance Plan Association (TAIPA) provides insurance for which of the following reasons? A Applicant was rejected by two insurers B Applicant had no prior insurance C Applicant's driver's license was suspended D Applicant has a poor claims history
A
The minimum financial responsibility liability limit in Texas is _____. A 30/60/25 B 15/30/10 C 10/20/5 D 25/50/15
A
The purpose of the Texas FAIR Plan Association is to: A Insure property owners who are unable to obtain insurance coverage B Handle insurance complaints by policyholders C Mediate claim disagreements between insurers and policyholders D Review premium rates to investigate allegations of discrimination
A
An automobile liability policy in Texas must provide which of the following coverages? A Bodily injury, death, and PIP B Bodily injury, death, and property damage C Uninsured and underinsured motorist D Medical payments
B
Who is NOT eligible for an agent license in this state? A A 43-year-old who submitted the appropriate application and fees 1 month ago B A 17-year-old who passed the licensing exam 6 months ago C A 25-year-old who passed the licensing exam 2 months ago D A 30-year-old who submitted the appropriate application and fees 1 week ago
B
The Floor Plan Merchandise floater covers which of the following? A Department store's inventory B Contractor's floor plans C Car dealer's cars D Architect's blueprints
C
Which of the following is NOT transacting insurance? A Providing an insurance proposal B Collecting an insurance payment C Completing continuing education requirements D Delivering an insurance contract
C
The Texas Property and Casualty Insurance Guaranty Association pays covered claims against which of the following? A Unauthorized insurance companies B Workers' Compensation carriers that have denied coverage C Labor associations that have denied coverage D Insolvent insurers
D
Which is true of a joint underwriting association (JUA) in Texas? A It is an association made up of employers B It is not subject to examination by the Commissioner C Its license expires 1 year from the issuing date unless renewed D It may act only on behalf of association members who are admitted and licensed to do business in Texas
D
Which of the following best describes a Texas Lloyds company? A It is a group-owned insurer that primarily assumes and spreads liability-related risks for its members B It is a partnership with the state in which the state offers and Lloyds reinsures hard to find coverages C It is an organization that provides excess life and accident & health insurance only D It is an arrangement between an attorney-in-fact and at least 10 underwriters providing property and casualty insurance
D
Which person would not be covered under a Workers' Compensation policy? A Texans' Work program trainee B Employee injured while working C Repairman working on employer's premises D Seaman injured on board moving vessel
D
Who must report any actual or suspected act of insurance fraud to the Department or the NAIC within 30 days? A Only agents and insurers B Only insurers C Only agents D Any person
D
Inducing a policy holder to terminate a policy in exchange for a less favorable one is an example of which type of unfair trade practice? A Rebating
misrepresentation
An agent must maintain all insurance records, including all records relating to customer complaints, separate from the records of any other business in which the agent may be engaged.
record maintenance
The minimum limits of auto liability insurance required to establish financial responsibility in Texas are:
$30,000, $60,000, $25,000
Which of the following does NOT qualify as evidence of financial responsibility? A Savings account statement B Certificate of surety bond C Deposit of $55,000 filed with the county judge D Auto insurance card
A
Which one of the following best describes an adjuster in Texas? A An insurance company's field representative who seeks to recruit new agents to sell their policies B A person who invests the insurance company's funds to make sure they have adequate reserves in order to pay claims when and if they come due C A person who investigates or adjusts losses on behalf of an insurance company D An insurance company's employee who helps in establishing rates on various risks
C
Which of the following best describes a Texas Lloyds company? A It is an arrangement between an attorney-in-fact and at least 10 underwriters providing property and casualty insurance B It is a group-owned insurer that primarily assumes and spreads liability-related risks for its members C It is an organization that provides excess life and accident & health insurance only D It is a partnership with the state in which the state offers and Lloyds reinsures hard to find coverages
A
Which of the following is not a prohibited claims practice? A Requiring a claimant's income tax return while investigating an arson fire B Misrepresenting a material fact to a claimant C Refusing to pay a claim without reasonably investigating it D Requiring an insured to release the insurer from a claim in order to receive a partial payment
A
Commissions may be paid: A To the holder of a temporary license on a sale made to an individual with whom the licensee has a business relationship B To a licensed agent for the sale of insurance to a non-related individual C By an insurer to an agent who is not licensed, but is appointed by the insurer D In addition to a fee from the same client
B
In order to receive credit for attending a classroom insurance continuing education course, how much of the course must a student attend? A More than half of the course B At least 90% of the course C No less than 3/4 of the course D The entire course
B
Which if the following is a requirement of a Texas surplus lines agent? A Hold a Fair Plan agent license B Obtain and maintain a $50,000 surety bond C Hold a personal lines property and casualty agent license D Obtain and maintain business auto insurance
B
Which of the following is not required of an agent to do in order to be able to transact insurance business in Texas? A Appointment by insurer B Pay a fee for a Certificate of Authority C Has not committed an act for which a license may be denied D Pass an exam
B
Which of the following statements about continuing education is true? A At least 90% of continuing education hours must be completed online B Every licensee must complete 2 continuing education hours on the topic of ethics C Every licensee must complete 3 continuing education hours on the topic of flood insurance D At least 50% of continuing education hours must be completed via webinar
B
Which of the following statements is correct with respect to medical benefits? A Medical benefits are payable from the date the injury is diagnosed B Medical benefits are payable from the injury date C An employee may receive medical treatment from any physician D An insurer is not liable for medical costs related to spinal surgery, except in a medical emergency
B
Which of the following statements is false regarding supplemental income benefits? A Supplemental income benefits are calculated quarterly and paid monthly B Once every 6 months, an employee and an insurer may request that the Commissioner review the employee's status C To be eligible to receive supplemental income benefits, a recipient must actively seek employment D An insurance carrier must begin paying supplemental income benefits by the 7th day after the employee's impairment income benefit period expires
B
With respect to the Texas Uninsured/Underinsured Motorists Coverage: A The coverage applies to the insured, his/her family members and passengers in the insured's car, but not to others driving the insured's car B The coverage pays for property damage, including auto repairs, a rental car, and damage to items carried in the insured's car, subject a deductible of $250 C The coverage pays for bodily injury for medical bills, lost wages, pain and suffering, disfigurement, and permanent or partial disability, subject a deductible of $250 D The coverage pays for property damage, including auto repairs, a rental car, and damage to items carried in the insured's car without application of a deductible
B
What prohibited trade practice does an agent commit when he lies about policy terms in order to convince a policyholder to cancel an existing policy in order to buy a new policy?
misrepresentation
The Texas Property and Casualty Guaranty Fund will cover Workers' Compensation claims up to what amount?
no limit
If an employee's death results from a compensable injury, what amount must the insurer pay toward the actual and reasonable burial costs?
$6,000
The Department may issue a temporary agent's license, valid for ______ days.
90
Which of the following statements is correct with regard to the FAIR Plan? A Insurers, except TWIA, must be members B Property must be an uninsurable risk C The FAIR Plan is designed to provide a means to purchase basic property insurance at reduced rates D Losses are paid by the state
A
In Texas, when the Commissioner cancels or revokes an insurance license, he/she may also do all of the following except: A Refer the matter to the attorney general for enforcement of any unpaid penalty B Suspend the license for up to 5 years C Issue a cease and desist order D Order the licensee to pay restitution
B
In Texas, a Workers' Compensation carrier is not liable for compensation to an employee if: A The employee was injured while engaged in horseplay at work B The employee is injured while in the course and scope of employment C The employee was injured while participating in a mandatory social activity at work D The employee's injury is an occupational disease
A
When is an employee entitled to temporary income benefits? A When disabled B Before an injury C After death D When not disabled
A
Who does not qualify for exemption from continuing education requirements necessary to maintain an insurance license? A Agent who is in a coma B Agent who serves in the Army Reserves C Agent licensed for 25 years D Nonresident agent
B
An automatic fine of $50 per credit hour applies if a licensee fails to comply with what continuing education requirement? A Issue a course completion certificate within 60 days of completing a course B Obtain a life and health license during the first licensing period C Complete the required number of continuing education hours during a licensing period D Prepare 30 course completion certificates during a licensing period
C
Which of the following may the Commissioner not do if he/she cancels or revokes an insurance license? A Issue a cease and desist order B Refer the matter to the Attorney General for enforcement of any unpaid penalty or restitution C Suspend the license for up to 5 years D Order the licensee to pay an administrative penalty and/or make restitution
C
A licensed agent is required do which of the following before transacting insurance in Texas? A Pass an appointing exam B Obtain an appointment from an insurer C Obtain a Certificate of Authority D Obtain an insurance counselor's license
B
For what types of loss may a person obtain insurance from the Texas Windstorm Insurance Association? A Only hail B Only windstorm C Windstorm and fire D Windstorm and hail
D
Which of the following is not true about PIP coverage in Texas? A It provides periodic benefit payments within 10 days after receiving proof of loss B It covers insureds and their guests without regard to fault or coordination of benefits C It includes lost income benefits for injured persons who are employees D It must be included in all auto policies unless a named insured rejects it in writing
A
Which of the following is not true about continuing education requirements? A 3 credit hours of ethics is required B To qualify to sell flood insurance, 3 credit hours of flood education is required C The licensee will automatically be fined $50 per required CE hour not taken D At least 50% of the CE credits must be taken in the classroom or classroom equivalent
A
Which of the following statements is false regarding the Texas Automobile Insurance Plan Association? A The TAIPA provides automobile liability insurance when an insurer becomes insolvent B An applicant must be rejected by at least 2 licensed, authorized, and active insurers C The TAIPA provides automobile liability insurance for individuals who have been unable to obtain auto insurance through normal markets D Each auto insurer must be a member of the Association to transact insurance business in the state
A
All of the following are motor vehicles EXCEPT: A A pickup truck B A train C A car towing a boat D A camping trailer towed by a car
B
Which of the following is not required to have an insurance agent's license from the Department of Insurance in order to transact insurance business? A Counselor B Underwriter C Bank D Subagent
B
A managing general agent (MGA) is: A A salaried employee who only performs assigned duties in a property and casualty agent's office B A person who causes an insurance contract to be issued with an eligible surplus lines insurer C Any person or entity responsible for supervising the local agency and field operations of an insurance company D A person who, for compensation, examines, assesses, or evaluates risks for, and provides advice for reduction of risks
C
For which employee is an employer NOT liable for Workers' Compensation benefits? A An employee who accidentally injured himself B A careless employee C An intoxicated employee D An employee taking prescription drugs
C
In Texas, Workers' Compensation Disability benefits are covered from the date of disability if a disability is longer than: A 7 days B 10 days C 2 weeks D 10 weeks
C
The Texas insurance code applies to all of the following except: A Any organization holding an authorization to conduct insurance business in the state B Any corporation engaged in the business of insurance in the state C Any student studying insurance in the state D Any association regulated by the insurance commissioner
C
Which of the following facts is TRUE about UM/UIM coverage in Texas? A UM/UIM coverage is mandatory B Hit-and-run accidents are NOT covered C An insured may decline UM/UIM coverage D Mandatory UM/UIM coverage is $100,000
C
Which of the following statements is NOT correct with respect to a Joint Underwriting Association? A A JUA only acts on behalf of association members B A JUA's license expires every 3 years C A JUA is not subject to an examination by the Commissioner D A JUA must have a Certificate of Authority to transact business
C
Who is not covered by a Workers' Compensation policy? A Employee injured while working B Texans' Work program trainee C Workers injured while working on a moving vessel D Repairman working on employer's premises
C
The Commissioner may discipline a licensed insurance agent for all the following behavior, EXCEPT: A Being convicted of a felony B Deliberately violating a Texas insurance law C Stealing a client's insurance premium D Being arrested for overdue parking tickets
D
The Floor Plan Merchandise floater covers which of the following? A Contractor's floor plans B Architect's blueprints C Department store's inventory D Car dealer's cars
D
Which of the following is not a duty the Commissioner must administer? A Enforce state insurance laws B Approve an insurance license for a producer C Administer the workers' compensation system D Make state insurance laws
D
What line of insurance does NOT require a licensee to complete a certification course, and a specified number of continuing education hours, if he/she acts as an agent with respect to insurance products in that specialty?
auto insurance
