Code of Ethics 36-52
Which one of the following would be considered an acceptable actuarial classification for discrimination? A) How much someone weighs B) The color of someone skin C) The religion someone might practice D) The national origin someone might be from
A) How much someone weighs
Cal-GLBA affects many aspects of agents business EXCEPT: A) How the agent services, defends, and pay claims. B) An Opt in and Opt out system. C) How client files are secured. D) How firm markets, collects, and shares information.
A) How the agent services, defends, and pay claims.
Public Law 15 exempted insurers from most federal regulation is known as: A) Kennedy Act B) McCarran-Ferguson Act C) ERISA Regulations D) Gramm-Bliley Act
B) McCarran-Ferguson Act
Which of the following statements with regards to the CIGA is true? A) The Association is directed by a ten member board of governors. B) The maximum claim covered is $500,000. C) Covered claims do include claims of $100 or less. D) The Association is funded by premium payments of the consumers.
B) The maximum claim covered is $500,000.
Which of the following CIGA claims would be covered and paid in full? A) A workers' compensation claim in the amount of $90. B) A property damage claim in the amount of $600 on a policy that has a $500 deductible C) A bodily injury claim in the amount of $1000 on a policy that has a $1000 deductible D) A homeowners claim in the amount of $750,000 on a policy that has a $1000 deductible and a limit of $500,000
A) A workers' compensation claim in the amount of $90.
For an insurer to be solvent they must have enough assets to cover: A) All of these B) liabilities C) paid-in-capital D) reinsurance
A) All of these
A Special Surplus Line broker may transact all of the following except: A) Insurance on antique automobiles B) Aircraft insurance C) Insurance on property being exported by land or water D) Insurance on property that engage in interstate commerce thru railroad operations
A) Insurance on antique automobiles
Advising a client to obtain the services of an attorney is considered to be: A) acceptable B) a violation C) an unfair practice D) both a violation and unfair practice
A) acceptable
A unwillful violation of Unfair Practice can be fined up to: A) $20,000 per violation B) $5,000 per violation C) $10,000 per violation D) $1,000 per violation
B) $5,000 per violation
An Insurance Claims Analysis Bureau shall perform the following functions: A) Gather information B) All of the above C) Promote training D) Disseminate information
B) All of the above
California Privacy Act established standards concerning insurance for: A) collection of information B) All of the above C) disclosure of information D) use of information
B) All of the above
Which of the following statements are not true? A) If convicted of insurance fraud the fine can be up to $150,000. B) Full repayment to victims can be required instead of the fine amount. C) Insurance prosecutors may prosecute insurance fraud as a misdemeanor. D) If convicted of insurance fraud the fine could be twice the amount of the fraud.
B) Full repayment to victims can be required instead of the fine amount.
Which of the following statements are true with regards to rate approval in the State of CA? A) The CA DOI uses the Open Approval system for rates. B) Insurers are required to deliver evidence that the rates are reasonable and fair. C) The Commissioner has a maximum of 90 days to approve or reject the rates. D) If the Commissioner fails to respond within 30 days then the rate is considered approved.
B) Insurers are required to deliver evidence that the rates are reasonable and fair.
This law recognized that state regulation of the insurance industry was in the public's best interest and EXEMPTED the insurance industry from the federal regulation required for most interstate commerce industries. A) Paul vs. Virginia 1869 B) McCareen-Ferguson Act of 1945 C) SEUA Case of 1944 D) Public Law 25
B) McCareen-Ferguson Act of 1945
HIPPA addresses how licensees must protect clients: A) None of these B) medical information C) personal information D) financial information
B) medical information
Every company in California is required to report its financial condition to the Commissioner: A) Every year, by Dec 31st B) Every month C) Every year, on or before March 1st D) Every quarter
C) Every year, on or before March 1st
No rate shall be approved or remain in effect that contains all of the following except: A) Inadequate B) Unfairly discriminatory C) Excessively higher than the competition D) Violation of the California Insurance Code
C) Excessively higher than the competition
The insurance Commissioner is elected at the same time as the: A) President B) State Representatives C) Governor D) State Senators
C) Governor
In order to purchase P/C insurance, you must be able to show insurable interest. Which of the following would not meet the insurable interest requirement? A) Jason wants insurance on a car which he sold to his best friend but Jason still carries the bank loan on the car B) Jason owns a beach home as a secondary residence and wants insurance C) Jason wants insurance for his father's home D) Jason obtained a loan so he could buy a car for his sister who drives it 100% of the time and he wants insurance
C) Jason wants insurance for his father's home
The specific classifications which cannot exist include the following except: A) Ancestry B) Sexual orientation C) Nicotine use D) Religion
C) Nicotine use
What type of Valuation would this statement be: An appraised $200,000 house burns and is a total loss? The insurance company pays $230,000 to rebuild the house. A) Valuation Value B) Actual Cash Value C) Replacement cost value D) Market Value
C) Replacement cost value
CIGA protects policyholders against insolvency of all the following, except: A) Marine Insurers B) Burglary insurance C) Self-insurers D) Auto Insurers
C) Self-insurers
Which of the following is not true with regards to Surplus lines? A) Surplus lines insurers are unregulated but operate under each state's Surplus lines laws B) Most states require that Surplus lines insurers be on the state's approved list. C) Surplus lines insurers are admitted insurers who specialize in offering insurance to the high risk market D) The type of business Surplus lines insurers offer is referred to as Excess Lines Insurance
C) Surplus lines insurers are admitted insurers who specialize in offering insurance to the high risk market
The following are true in regards to the California Insurance Guarantee Association except: A) The maximum claim covered would be $500,000 or the policy limit B) The purpose of the association is that each member be provided with insolvency insurance C) The Association is directed by a 9 member Board of Governors who are elected by voters for a two year term D) The association is funded by its member insurers
C) The Association is directed by a 9 member Board of Governors who are elected by voters for a two year term
Which of the following means Insolvency? A) An insurer must also possess additional assets equivalent to such aggregate B) Not being able to meet the many financial, technical, and legal qualifications that must actually be met by the code C) The inability of the insurer to meet its financial obligations when they are due D) Being able to provide for all its liabilities and for reinsurance of all outstanding risks
C) The inability of the insurer to meet its financial obligations when they are due
The penalties for the insurer for unfair discrimination violation determined to be a general business practice is: A) $25,000-$50,000 B) $5,000-$25,000 C) $15,000-$50,000 D) $15,000-$100,000
D) $15,000-$100,000
The following are all responsibilities of the Commissioner of Insurance except: A) Oversee the DOI, directing all its affairs and staff in compliance with the code B) Issue regulations that establish how the DOI intends to interpret and enforce the law C) Appoint people to negotiate settlements with agents or insurers who have violated the code D) Authority to change the code but may not write new laws
D) Authority to change the code but may not write new laws
The following are fair discriminations which would allow an insurer to increase the insured's auto rate except? A) Insured has only be driving for 1 year B) Insured has caused 2 accidents C) DUI on their driving record D) Insured has been divorced
D) Insured has been divorced
All of the following are types of Valuations used by insurers except: A) Agreed Value B) Replacement Cost Value C) Stated Value D) Market Value minus the depreciation.
D) Market Value minus the depreciation.
This law was the first to recognize that state regulation of the insurance industry was in the public's best interest. A) United States vs. Southeaster Underwriters Association B) McCarren-Ferguson Act C) Public law #5 D) Paul vs. Virginia
D) Paul vs. Virginia
What is the main role of the Commissioner and the Department of Insurance? A) Make sure consumers are not abused or taken advantage of by the companies and agents with whom they do business B) Regulate the business of insurance in California C) Administer the California Insurance Code D) Regulate the conduct of agents and insurers in California
D) Regulate the conduct of agents and insurers in California
All of the following are true regarding the Gramm-Leach-Bliley Act except: A) The GLB act gives authority eight federal agencies. B) The GLB is also know as the Financial Modernization Act of 1999. C) The GLB allows the administration of the Financial Privacy Rule and the Safeguards Rule. D) The GLB includes provisions to protect consumers against insurance companies financial failure.
D) The GLB includes provisions to protect consumers against insurance companies financial failure.
Since CA uses the Prior Approval system in filing rates, what happens if the Commissioner fails to respond within 60 days? A) The company must file a request to receive the reasons why the filed rates are being rejected and resubmit new filing. B) The company may not use the filed rates until the Commissioner has either approved or rejected the rates C) The company must not use the filed rates since no response by the Commissioner means: rates not approved D) The company may use the filed rates and may consider them approved
D) The company may use the filed rates and may consider them approved
What regulates trade practices in the insurance business accordance with the intent of Congress? A) The California Administrative Code of Regulations B) Uniform Insurers Rehabilitation Act C) Public Law #15 D) Unfair Practices Article
D) Unfair Practices Article
According to the Code the fastest growing area of fraudulent activities is: A) health insurance fraud B) workers comp fraud C) None of the above D) auto insurance fraud
D) auto insurance fraud
