Insurance License - Quiz Questions
The violation of a cease and desist order may result in a fine of A$3,000. B$5,000. C$7,500. D$10,000.
D$10,000.
How is the Georgia Insurers Insolvency Pool funded? ABy federal government BBy the tax payers CBy the state Department of Insurance DBy assessment of member insurers
D) By assessment of member insurers
Insurers who are members of the Georgia Insurers Insolvency Pool may be assessed up to what percentage of their net direct written premiums? A) 2% B3% C5% D10%
A) 2%
Which of the following entities investigates and negotiates settlement of claims arising under insurance contracts? A) Adjuster B) Agent C) Producer D) Underwriter
A) Adjuster
Which of the following dwelling policy forms primarily insures a structure on an actual cash value basis? ADP-1 BDP-2 CDP-3 DAll DP forms
A) DP-1
An individual who cannot obtain basic property insurance through the voluntary market may be eligible for coverage under AThe Georgia FAIR Plan BThe Georgia Automobile Insurance Plan. CThe Insurance Guaranty Association. DThe Assigned Risk Plan.
AThe Georgia FAIR Plan
It would be considered unfair discrimination to ask an insurance applicant about which of the following and then use that information as a rating factor to determine insurability? A) Address B) Sexual orientation C) Age D) Occupation
B) Sexual orientation
Which type of liability insurance may an insured reject in writing? A) The Georgia Automobile Insurance Plan B) Uninsured motorist coverage C) Auto liability insurance D) Compulsory insurance
B) Uninsured motorist coverage
How much is covered for debris removal under the HO property additional coverages? ANothing, unless added by an endorsement BAll reasonable costs C90% of the total cost of clean-up DEverything after a $200 deductible
BAll reasonable costs
An insured must get advance warning if the premiums will be increased by more than A5%. B10%. C15%. D20%.
C15%.
If an insurer fails to return unearned premiums for a policy that has been cancelled within a specified number of days, the insurer must pay a penalty of A6% B10% C18% D25%
D25%
A producer who fails to separate premium monies from his own personal funds is guilty of ALarceny. BEmbezzlement. CTheft. DCommingling.
DCommingling.
An agent is acting ethically in all of the following situations EXCEPT A) Always representing the insured B) Working within the conditions of his/her contract C) Representing the insurer, not the insured D) Keeping the customers' best interests in mind
A) Always representing the insured
All of the following are classes of inland marine risks EXCEPT ACommon carrier cargo liability. BCommercial property floater risks. CDomestic shipments and transportation risks. DBridges, tunnels, and other instrumentalities of transportation and communication.
A) Common carrier cargo liability. The four classes of inland marine risks are the following: domestic shipments and transportation risks; bridges, tunnels, and other instrumentalities of transportation and communication; commercial property floater risks; and personal property floater risks.
An insured purchased an insurance policy 5 years ago. Last year, she received a dividend check from the insurance company that was not taxable. This year, she did not receive a check from the insurer. From what type of insurer did the insured purchase the policy? A) Mutual B) Reciprocal C) Nonprofit service organization D) Stock
A) Mutual
A participating insurance policy may do which of the following? A) Pay dividends to the policyowner B) Provide group coverage C) Pay dividends to the stockholder D) Require 80% participation
A) Pay dividends to the policyowner
All of the following are additional liability coverages automatically provided in a homeowners policy EXCEPT A) Personal injury. B) Claims expenses. C) Damage to the property of others. D) Loss assessment coverage.
A) Personal injury.
All of the following statements regarding continuing education requirements in this state are true EXCEPT A) Producers may repeat the same courses to meet the required CE hours for a licensing period B) CE hours must be completed every 2 years by the last day of the producer's birth month C) Ethics education is required every licensing period D) Excess hours may be carried over to the next licensing period
A) Producers may repeat the same courses to meet the required CE hours for a licensing period
Pertaining to insurance, which of the following is an example of a producer's fiduciary responsibility? A) Promptly forwarding premiums to the insurance company B) Helping insureds to file claims C) Performing reviews of insured's coverage D) Offering additional coverage to insureds
A) Promptly forwarding premiums to the insurance company
If an insurance premium is paid by the policyowner to the agent, and the agent fails to remit that premium to the insurer, which of the following statements is true? A) The policy will not lapse since payment to the agent is the same as a payment to the insurer. B) The premium will be taken out of the Guaranty Association funds. C) The agent's license will be automatically revoked. D) The policy will lapse since the premium was not received by the insurer.
A) The policy will not lapse since payment to the agent is the same as a payment to the insurer. Since the agent is a representative of the insurer, payment to the agent represents payment to the company. After a hearing, the agent's license could be revoked for engaging in such acts.
Which of the following is an example of a producer's fiduciary duty? A) The trust that a client places in the producer in regard to handling premiums. B) An obligation to state every known fact about the policy the producer is selling. C) A duty to base all transactions upon the principle of Utmost Good Faith. D) The obligation to tell the truth to the best of one's knowledge
A) The trust that a client places in the producer in regard to handling premiums.
Older homes with replacement costs greater than ACV or market value are insured on AHO-8. BHO-8 with an inflation guard endorsement. CHO-3. DHO-3 with an HO-15 endorsement.
AHO-8.
The regular National Flood Insurance Program would insure an eligible single-family dwelling for up to A$200,000. B$250,000. C$100,000. D$150,000.
B$250,000.
If an insured covered under a Mobile Homeowners Policy moves the mobile home to protect it from a covered peril, the policy will pay up to A$350. B$500. C$750. D$1,000.
B$500.
What is the maximum period of time a temporary license can be in force? A) 1 year B) 15 months C) 6 months D) 3 months
B) 15 months
If the premiums for a policy will be increased by more than 15 percent, how much warning must the insured get? A) 60 days B) 45 days C) 30 days D) 15 days
B) 45 days
Which of the following would provide coverage for loss of income when an insured rental dwelling is rendered uninhabitable because of a covered loss? A) Coverage C B) Coverage D C) Coverage A D) Coverage B
B) Coverage D Coverage D provides fair rental value coverage when insured rental dwellings suffer a loss covered by Coverage A, B, or C.
How often must insurers update their rate filings? A) Every year B) Every 2 years C) Every 3 years D) Only when a new product is introduced.
B) Every 2 years
Committing insurance fraud is considered a A) Criminal offense. B) Felony. C) Misdemeanor. D) Civil offense.
B) Felony.
An insurance agent's responsibilities include all of the following EXCEPT A) Perform professionally. B) Represent the client. C) Perform faithfully. D) Represent the insurer.
B) Represent the client.
All of the following are special personal property limits under a homeowners policy EXCEPT A$1,500 for trailers not used with watercraft. B$2,500 for theft of firearms. C$500 for business personal property on the insured premises. D$1,500 for securities, accounts, deeds, and evidences of debt.
C$500 for business personal property on the insured premises. HO forms place a $2,500 limit for business personal property that applies on premises only. A limit of $500 applies to loss of business personal property while away from the premises.
If an agent's residence address is changed, within how many days must the agent notify the Commissioner? A) 10 days B) 15 days C) 30 days D) 60 days
C) 30 days
Agents, subagents, and counselors are required to maintain records of all insurance transactions for what time period? A) 1 year B) 3 years C) 5 years D) 7 years
C) 5 years
If an individual licensed as an agent was employed by the Commissioner as a bona fide full-time employee, upon termination of employment, the individual may reinstate their license within how many days? A) 15 days B) 30 days C) 90 days D) 180 days
C) 90 days
All of the following lines of authority are considered limited lines EXCEPT A) Portable electronics insurance. B) Credit insurance. C) Accident and health insurance. D) Travel insurance.
C) Accident and health insurance. Accident and health insurance is considered a major line of insurance. Limited lines of insurance include, but are not limited to, credit insurance, travel insurance, insurance issued to rental companies, and portable electronic insurance.
Which of the following types of licensees is solely responsible for offering advice on insurance policies for a fee? A) Sub-agent B) Broker C) Counselor D) Agent
C) Counselor
When doing business in this state, an insurance company that is formed under the laws of another state is known as which type of insurer? A) Alien B) Nonadmitted C) Foreign D) Domestic
C) Foreign
Which of the following best describes a misrepresentation? A) Making a maliciously critical statement that is intended to injure another person B) Discriminating among individuals of the same insuring class C) Issuing sales material with exaggerated statements about policy benefits D) Making a deceptive or untrue statement about a person engaged in the insurance business
C) Issuing sales material with exaggerated statements about policy benefits
Any inducement offered to the insured in the sale of an insurance policy that is not specified in the policy is an unlawful practice known as A) False advertising. B) Coercion. C) Rebating. D) Twisting.
C) Rebating
A nonresident agent is allowed to conduct insurance transactions in Georgia because his home state allows Georgia residents to transact insurance business in it. This is known as a/n A) Overinsurance. B) Appointment. C) Reciprocity agreement. D) Nonresident arrangement.
C) Reciprocity agreement.
The difference in the contents coverage on an HO-3 and HO-5 is which of the following? AContents are covered open peril on HO-3, and named peril on HO-5. BContents are covered for replacement cost on HO-5, and ACV on HO-3. CContents are covered for replacement cost on HO-3, and ACV on HO-5. DContents are covered open peril on HO-5, and named peril on HO-3.
D) Contents are covered open peril on HO-5, and named peril on HO-3. HO-5 provides open peril coverage for contents; HO-3 is named peril coverage for contents. Replacement cost coverage is available only by endorsement to either form.
An insurance producer just sold an insurance policy to his sister. What kind of business is this? A) Illegal B) Internal C) Personal D) Controlled
D) Controlled
How is the Commissioner of Insurance selected to be the chief officer of the Department of Insurance? A) Hired by the Department B) Nominated by insurers C) Appointed by the Governor D) Elected to office
D) Elected to office
Which of the following is NOT true regarding a Certificate of Authority? A) It may be necessary for transacting business in a specific state B) It is equivalent to an insurance license C) It is issued by the state department of insurance D) It is issued to group insurance participants
D) It is issued to group insurance participants
Which of the following coverages is included in an unendorsed homeowners policy? APersonal property replacement coverage BFungi, wet or dry rot, or bacteria CEarthquake DMedical payment to others
D) Medical payment to others Medical payment to others is automatically included in Section II of all HO policies.
All of the following are true regarding rebates EXCEPT A) Rebates are only allowed if specifically stated in the policy. B) Rebating can be anything of monetary value given as an inducement to purchase insurance. C) Dividends are not considered to be rebates. D) Rebates are allowed if it is in the best interest of the client.
D) Rebates are allowed if it is in the best interest of the client.