Pennsylvania Property and Casualty Law Supplement
The workers compensation benefit for total disability is what percentage of the average weekly wage?
66.67%
All of the following are considered unfair claim practices EXCEPT: A) failing to act promptly on communications regarding claims. B) misrepresenting the amount of coverage available under the policy. C) insisting on investigating a claim based on an uncertain cause of death. D) attempting to settle a claim for less than the contract provides.
C
A policy covering commercial risks is subject to midterm cancellation for non-payment of premium upon how many days' written notice?
15 days
What is the minimum age at which a person may apply for an insurance producer's license?
18
A type of insurance for which an agent's license may be issued in Pennsylvania is called a:
line of authority
A licensee may charge a fee in addition to a commission to a person for the sale of what kind of insurance contract?
Commercial business
All of the following are considered unfair trade practices EXCEPT: A) defamation. B) rebating. C) misrepresentation. D) replacement.
D
All of the following are unfair trade practices EXCEPT: A) offering advantages in dividends that were not specified in the policy. B) rebating premiums. C) making derogatory statements regarding an insurer's financial condition. D) paying commissions to licensed producers.
D
How often must producer licenses be renewed in Pennsylvania?
Every 2 years
The insurance industry in the United States primarily is regulated by the:
States
In Pennsylvania, notice of nonrenewal of a commercial policy must be given to the named insured at least how many days in advance?
60 days
The Pennsylvania Insurance Commissioner has all of the following powers EXCEPT: A) prosecuting insurers and producers for criminal wrongdoing. B) conducting hearings. C) examining the financial condition and market conduct of insurers and producers. D) making rules and regulations.
A
Programs used by states that create a pool to provide fire and extended coverage insurance to individuals unable to obtain coverage from private insurers are called:
FAIR plans
The Pennsylvania Property and Casualty Insurance Guaranty Association is made up of all:
insurers who issue property and casualty insurance in Pennsylvania
An individual that acts as a manager or exclusive general agent without a proper license is subject to a fine of how much for each day of operation?
$1,000
Written notice of cancellation of a FAIR plan policy must generally be provided at least how many days in advance?
20 days
How many credit hours of continuing education must an insurance producer complete during each 2-year license period?
24 hours
A binder for temporary fire insurance is good for how many days?
30 days
A producer must report any criminal charge to the Commissioner within how many days of the charge?
30 days
A standard fire policy issued in Pennsylvania covers loss of property due to all of the following EXCEPT: A) damage to property that resulted from a defective product. B) fire. C) removal from the premises endangered by the perils insured against. D) lightning.
A
Basic property insurance under the FAIR plan covers loss from all of the following EXCEPT: A) flood. B) lightning. C) fire. D) vandalism.
A
What is an admitted insurer?
A company that is authorized by the Commissioner to transact insurance business in Pennsylvania
An insurance company formed under the laws of any country other than the United States would be considered what kind of company?
Alien
Which type of insurer is formed under the laws of a country other than the United States?
Alien
Occupational disease for purposes of the workers compensation laws includes the following EXCEPT: A) skin cancer from tar. B) loss of leg due to an accident. C) black lung. D) skin infection or inflammation from oils.
B
Which of the following statements about the stacking of uninsured motorist coverage is CORRECT? A) It is prohibited by Pennsylvania insurance law. B) It may be waived at the option of the insured. C) It may be waived at the option of the insurance company. D) It is required by Pennsylvania insurance law.
B
The Insurance Commissioner is responsible for all of the following duties EXCEPT: A) issuing certificates of authority. B) conducting insurance investigations. C) enforcing provisions of the insurance code. D) passing insurance laws and regulations.
D
To obtain a producer license, a person must comply with all of the following EXCEPT: A) complete a licensing application. B) be at least 18 years old. C) pass the licensing examination. D) earn a college degree.
D
Which type of insurer is domiciled in a state other than Pennsylvania?
Foreign
An insurance producer must be appointed by whom?
Insurer
Which entity exists to pay covered claims and avoid financial loss to claimants when an insurer becomes insolvent and to assist in the detection and prevention of insurer insolvencies?
Pennsylvania Insurance Guaranty Association
Which term refers to a nonadmitted insurance company which is eligible to place business on risks in the state?
Surplus lines
The practice of using misrepresentation to induce any person to lapse, forfeit, surrender, exchange, or convert an insurance policy is also known as:
Twisting
An insurer who violates Pennsylvania law regarding the midterm cancellation of policies covering commercial property and casualty risks is subject to:
a cease and desist order
By examining an insurer's records, the Insurance Commissioner assesses the insurer's:
compliance with state laws
To demonstrate financial responsibility in Pennsylvania, the insured must be able to respond to damages in what amounts?
$15,000 for injury to any one person/$30,000 maximum for any one accident.
Workers compensation death benefits include a burial benefit of up to what amount?
$3,000
Financial responsibility requires the ability of the insured to pay how much for damage to the property of others from any single accident?
$5,000
If an insurer initiates the midterm cancellation of a policy covering commercial property risks, any unearned premium must be returned to the insured within what period of time of the effective date of the cancellation?
10 days
When an insurer sends a notice of cancellation of a property or casualty policy to an insured, the notice must advise the insured of the right to request a review of the insurer's action within:
10 days
Within how many days of a notification of a claim must an insurer provide necessary claim forms?
10 days
A licensee whose license has lapsed has how much time to reinstate it without reapplying as a new licensee?
12 months
An insurer must continue basic property insurance for how many days after the death of the named insured?
180 days
What is the maximum term of a temporary license that is issued as a result of a licensee's death?
180 days
The workers compensation statute in Pennsylvania includes all of the following in its definition of employer EXCEPT: A) a one-person, non-incorporated business. B) for-profit corporations. C) the state. D) not-for-profit corporations.
A
Clear and conspicuous notice of a licensee's privacy policies and practices must be provided to customers at least:
Annually
A written agreement in which an insurer authorizes a producer to sell insurance policies for it is called a (n):
Appointment
How often must the Commissioner examine a domestic insurer?
At least once during a 5-year period
Which of the following statements about workers compensation in Pennsylvania is NOT correct? A) The employer must pay compensation according to a schedule set by the state. B) The employer does not have to pay workers compensation if the employee was negligent in causing his injury. C) The employer does not have to pay workers compensation if the injury to the worker was self-inflicted. D) The employer does not have to pay workers compensation if the injury to the employee was caused by the employee's violation of the law.
B
All of the following statements about uninsured and underinsured motorists coverage in Pennsylvania are true EXCEPT: A) coverage can be less than the bodily injury liability limits if requested by the insured. B) these two types of coverage must be sold separately by insurers. C) these coverages must be offered in amounts equal to the bodily injury liability limits. D) these optional coverages are included in a policy only upon request.
D
Which one of the following statements regarding the Pennsylvania Property and Casualty Insurance Guaranty Association is CORRECT? A) The members of the association are the insurance-buying public. B) The association has a limit of $1,000,000 per any claim. C) The association protects policyowners, insureds, and beneficiaries against failure of an insurer due to insolvency. D) The association covers insurers who provide workers compensation coverage.
D
Executing the insurance laws of Pennsylvania is whose responsibility?
Department of Insurance
An endorsement to a workers compensation policy may be used to cover:
Longshoremen
A written note that temporarily obligates an insurer to provide insurance before a contract has been written or the premium paid is called a:
binder
Suppose that to motivate a buyer to sign an application for insurance, a producer promises a gift of one-half of the commission. This is an example of:
rebating
A person convicted of one count of insurance fraud may be subject to a civil penalty of up to what amount?
$5,000
Insurers issuing liability policies covering motor vehicles in Pennsylvania must include medical benefits coverage in the amount of:
$5,000
The fine for failing to inform an insured of possible eligibility for the PAIP upon cancellation of an auto policy is an amount up to:
$5,000
Agents and brokers must notify the Insurance Department of any change in their residence or business address within:
30 days
Before selling insurance policies for an insurer, a producer must first: A) be appointed by the insurer. B) complete college. C) register with the Commissioner. D) issue a public statement of intent to sell insurance.
A
Insurers issuing liability policies covering motor vehicles in Pennsylvania must offer all of the following coverages EXCEPT: A) injuries incurred on the job. B) accidental death benefit. C) funeral benefit. D) income loss benefit.
A
Loss due to all of the following are covered in a standard basic property insurance policy EXCEPT: A) crop failure. B) theft. C) burglary. D) vandalism.
A
The Commissioner may deny, revoke, or suspend a producer license for all of the following EXCEPT: A) failing to meet the yearly sales quota. B) providing false information in a license application. C) misappropriating money being held in a fiduciary capacity. D) committing a felony.
A
All of the following are purposes of FAIR EXCEPT to: A) provide insurance to property owners when it is not available in the normal market. B) protect policyowners who are insured by insolvent insurers. C) stabilize property conditions in the state. D) provide a reinsurance pool involving all fire insurance companies in the state.
B
The office of the Insurance Commissioner is filled by:
appointment by the governor
An insurer that terminates an appointment must notify the department within how many days of the termination?
30 days
Benefits from an auto insurer are overdue if not paid within how many days after the insurer receives proof of the amount due?
30 days
Once a policy covering commercial property and casualty risks has been in effect for 60 days, all of the following reasons may serve as a basis for midterm cancellation of the policy EXCEPT: A) the business that owned the property suffered a financial setback. B) the insured failed to pay a premium when due. C) the insured made a material misrepresentation affecting the insurability of the risk. D) the insured requests the cancellation.
A
Which one of the following statements concerning paying commissions is NOT correct? A) A licensee may pay a commission to another licensee for selling an insurance contract. B) An insurance entity may not pay a commission to a person who is not licensed for activities related to the sale of insurance. C) An insurance entity may pay a commission to a licensee for selling an insurance policy. D) A licensee may pay a commission or fee to a person who has a suspended license or whose license was revoked.
D
Which of the following statements about limited tort insurance is CORRECT? A) It is prohibited in Pennsylvania. B) It allows the insured to recover only for pain and suffering. C) It limits an insured's ability to seek recovery for noneconomic losses such as pain and suffering. D) It limits an insured's ability to seek recovery for economic losses such as medical expenses.
C
An insurance company that is owned by its policyholders and that typically issues participating policies is known as a:
mutual insurance company
Upon the death of the named insured, a policy providing basic property insurance must be continued until the property is sold or for a minimum period of at least:
180 days after the death occurs.
Once an insurance policy on an owner-occupied dwelling has been in effect for 60 days, written notice must be given at least how many days in advance of the termination?
30 days
The law requires that a licensed producer advise the insurance department of a change in her residential or business address within how many days of such a change?
30 days
Under the Pennsylvania motor vehicle financial responsibility law, a statute of limitations applies to recovery of first-party benefits. When benefits have not been paid, any action to recover first-party benefits must begin within:
4 years from the accident date
The waiting period for payment of workers compensation benefits is:
7 days
All of the following are records the Commissioner may examine to determine an insurer's financial condition EXCEPT: A) level of working capital. B) personal correspondence. C) asset portfolio. D) market conduct reports.
B
All of the following are true of an insurer's cancellation of a policy covering an owner-occupied dwelling EXCEPT: A) the insured may appeal the cancellation to the Insurance Department. B) it may be done only for non-payment of premium. C) it must include the specific reasons for cancellation. D) it must advise the insured of possible eligibility for coverage under the FAIR plan.
B
All of the following individuals are exempt from the continuing education requirement EXCEPT: A) a producer who sells insurance for a fraternal society. B) a producer who sells only auto insurance. C) a business entity. D) a licensee who has only a limited line of authority.
B
All of the following people must be licensed to transact insurance business in Pennsylvania EXCEPT: A) producers who work for more than one insurance company. B) the chief financial officer of an insurer who does not solicit or negotiate risks. C) producers who specialize in annuities. D) insurance producers who hold their Chartered Life Underwriter designation.
B
All of the following statements regarding the responsibilities of a producer who is representing a consumer are correct EXCEPT: A) the producer must first sign a written agreement with the consumer. B) the producer must submit his agreement to the Commissioner for approval before beginning work. C) the producer must list clearly the services he will provide. D) the producer must include the fee he will charge for the services.
B
Which of the following statements regarding the licensing of a business entity as an insurance producer is CORRECT? A) If selling insurance for a licensed business entity, a person does not have to be a licensed producer himself. B) The entity must designate one individual to be responsible for the entity's compliance with insurance law. C) The entity may send a letter of intent to the Commissioner indicating its desire to act as an insurance producer. D) A business entity is not required to pay a licensing fee.
B
All of the following are true of a temporary producer license EXCEPT: A) the license may be revoked immediately and without notice. B) the lines of authority under the license may be limited. C) the license may be transferred to another individual. D) the license holder may be required to have a sponsoring insurer.
C
All of the following are true of binders for temporary fire insurance EXCEPT: A) they may be made for a period of up to 30 days. B) they include all the provisions of the permanent policy. C) they must be in writing. D) they include all the endorsements of the permanent policy.
C
Which of the following statements about the Pennsylvania workers' compensation law is NOT true? A) Employers are generally required to provide statutory benefits for work-related injuries. B) Employers may formally self-insure instead of purchasing private insurance. C) All employments are subject to the law, and there are no exceptions. D) Usually, compensation benefits are the exclusive remedy against the employer.
C