Exam Q&A's

Under NC's financial responsibility insurance law, no insurer may issue a policy to a resident with limits less than:

-$30,000/$60,000 bodily injury, and $25,000 property damage liability

· The minimum liability limits that can be written in the NC Reinsurance Facility are:

-$30,000/$60,000/$25,000

· In the computer fraud crime coverage form, what limit is placed on each occurrence of the loss of manuscripts, drawings or records?-$5,000

-$5,000

Coverage for medical payments under a personal auto policy applies to expenses following a covered accident that are incurred and services rendered within what maximum time period?

-3 years

· The initial binding period for new workers compensation coverage issued by the NC Rate Bureau is:

-30 days

An automobile rate filing made by the NC Rating Bureau is deemed to be approved after:

-50 days

· The employee theft crime policy includes a coverage extension that applies to employees temporarily outside the coverage territory for up to:

-90 days

· If cargo is damaged short of destination, Lloy'd agent at an intermediate port may agree to sell at best price, with settlement based on the difference between insured value and net proceeds of the sale. This is considered:

-A salvage loss

· The NC Motor Vehicle Reinsurance Facility was created to provide auto insurance for otherwise difficult to place risks. The facility is made up of:

-All insurers licensed to write auto liability insurance in the State

· Which of the following Employee Fidelity Bonds would cover all employees?

-Blanket position bond

An agent receives a cash premium from one of his clients. He deposits the cash into his own personal business account and subsequently drafts a premium check from the business account and forwards that on the insurer. The agent is guilty of:

-Commingling

· The termination of an insurance contract with the premium charge being adjusted in proportion to the exact time the protection has been in force is considered a:

-Flat rate cancellation

· In accordance with American Institute Hull Clauses, a pro rata return of premium will be given for all of the following reasons EXCEPT:

-If the policy is cancelled by the insured

· All of the following are true regarding deposit premium EXCEPT:

-It is 50% of the actual premium

An agent is completing an application of insurance for a client. The agent is required to provide the client a "notice of information practices" at all of the following times EXCEPT:

-No notice is ever required at the initial completion-When the personal information is collected from another source other than the applicants.

· Which of the following limits, shown in the declarations of a policy, applies to medical expenses?-Per person

-Per person

· A customer was injured in a supermarket parking lot when a grocery cart collided with the customer's leg. Coverage for this claim would be provided under:

-Premises and operations coverage

The termination of an insurance contract with the premium charge being adjusted in proportion to the exact time the protection has been in force is considered a:

-Pro rata cancellation

· While an insured was towing a utility trailer with his auto, the trailer came loose and ran into a store front. What part of the insured's auto policy would pay for the damage to the store?

-Property damage liability

· All of the following statements regarding a boat owners policy are true EXCEPT:

-Replacements for the boat listed in the Declarations are automatically covered, if the insured notifies the insurer within 60 days and pays the additional premium

· All of the following conditions must exist for injury or damage to be included in the products and completed operations hazard of a commercial general liability policy EXCEPT:

-The injury or damage must occur within 90 days after the insured's work is completed

· All of the following are true regarding physical damage coverage EXCEPT:

-The limit of liability is greater of the actual cash value of the vehicle at the time of loss or the amount necessary to repair or replace the vehicle

· How much coverage can be available for watercraft damage in the homeowners policy?

-Up to $1,500

All of the following are supplemental payments included in the liability section of a personal auto policy EXCEPT:

-Up to $100 for the cost to secure the release of a vehicle from an impoundment lot following a covered accident

· What is a license suspension period for a second offense of violating state rules regarding records and reports?

-Up to 1 year

An ocean marine adventure is:

-any voyage

A person who is responsible for the administration of a decedent's estate would have a need for a(n):

-fiduciary bond

Which of the following statements is true concerning a bonded contractor who defaults on a construction performance contract?

-the oblige may engage another contractor and then seek reimbursement from the surety

· Cancellation Provision:

-when policy cancelled upon its effective date= flat cancellation-when insurer cancels policy mid-term = insured receives a pro rata refund-when insured cancels policy prior to renewal date= short rate cancellation

When an insurer makes changes to premium rates, the insurer must notify the policy owners within how many days of the change?

15 days

If the commissioner denies an initial application for an agent, how long does the applicant have to request a review after receiving notification of the denial?

30 days

How long must a complaint record be maintained?

5 years

· If the ocean marine contract pays the ACV of the property just prior to the loss, it is

:-an indemnity contract

· Which of the following terms refers to such disabilities as the loss of a limb, hearing or eye sight?

Permanent partial disability

An insured owns and operates a ranch. The insured has several vehicles that are used in the ranching operation and for personal use. Which of the following could NOT be insured under a personal auto policy?

a two-ton grain truck with a 6,500 lbs. capacity