Personal lines

what is the most common penalties for violations of insurance statues?

A cease and desist order, a fine, and license suspension or revocation

who is an insurance agent

A person authorized to sell, solicit and negotiate insurance contracts

An insurance institution or agent that discloses information in violation of the information privacy and disclosure statues of North Carolina will be liable for

Damages sustained by the individual to who the information relates.

Which of the following will NOT be considered unfair discrimination by insurers?

Discriminating in benefits and coverages based on the insured's habits and lifestyle

How is the Commissioner of insurance selected for the office?

Elected in a general election for a 4 year term

what is a controlled business

Insurance on the producer's own life or property, or the lives or property of the producer's family or business associates

If an insurer accepts premium payments by credit card who is responsible for paying the fees charged by a credit card company?

Insurer accepting payment

Prior to approving the application for resident insurance license, the Commissioner shall find that the individual meets all of the following requirements except?

Is at least 21 years of age. (applicant must be 18 years of ager)

All of the following are eligible risks for the North Carolina Motor Vehicle Reinsurance Facility Except

Nonresident of this state who owns a motor vehicle registered in another state but is principally garaged in this state

The need for essential property insurance for the beach and coastal areas of North Carolina resulted in the creation of?

North Carolina Insurance Underwriting Association

Eligibility Requirements for obtaining property coverage in the Fair Plan includes all of the following Except

Property at risk must be owner occupied

Eligibility requirements for obtaining property coverage in the Fair Plan Include all of the following Except

Property must be owner occupied

An insurance company cannot pay a commission to a person for selling soliciting or negotiating insurance in North Carolina if

That person does not hold a required license

What type of licensee represents the insurance company?

The agent

Who must be notified of a producer's change of address?

The department of insurance/commissioner/director/superintendent)

A friend helped an insurance producer sell an insurance policy. The producer can share the commission with a friend if

The friend is licensed in the same line of insurance.

Whenever an insurer knows that a person has violated either the fraudulent claims or embezzlement provisions it is the insurers duty to notify which of the following

The insurance commissioner

Whenever an insurer knows that a person has violated either the fraudulent claims or embezzlement provisions it is the insurers duty to notify which of the following?

The insurance commissioner

Under which of the following circumstances would a pretext interview be permissible?

The insurer suspects criminal activity and fraud.

who is responsible for the cost associated with the examination of the insurers?

The insurer who is being examinded

The Commissioner is empowered to examine the records of any person transacting insurance in the State as an agency an agent or broker of record. If the Commissioner does examine a person the expense of that examination will be paid by

The person examined

When is controlled business legal?

When the commissions from controlled business do not exceed the aggregate commissions on all the other business (specific limits may vary from state to state)

defamation

a producer or broker who makes oral or written maliciously statements intended to injure another producer or insurer

which of the following acts would be grounds for a persons license suspension revocation or refusal to renew

an agent fails to pay state income tax

If an insurer holds a Certificate of Authority, it is known as what type of insurer?

authorized or admitted

If an insurer meets the state's financial requirements and is approved to transact business in the state, it is considered what type of insurer?

authorized or admitted

If a licensee is convicted of a criminal violation the licensee's insurance license is

automatically suspended

If the Commissioner/Superintendent finds a licensee engaging in an unfair method of competition or an unfair practice, what order will be issued?

cease and desist order

A state-issued document empowering an insurance company to become an admitted insurer is called what?

certificate of authority

twisting

is a misrepresentation that persuades and insured/owner to his or her detriment to cancel, laspe or switch policies from one to another

On its advertisement a company claims that it has funds in its possession that are in fact not available for the payment of losses or claims the company is guilty of

misrepresentation

On its advertisement, a company claims that it has funds in its possession that are, in fact, not available for the payment of losses or claims. What is the company guilty of?

misrepresentation

What illegal act does a producer commit when the producer represents a policy in a more favorable light than the policy really is?

misrepresentation

All of the following are eligible risk for the North Carolina Motor Vehicle Reinsurance Facility Except

nonresident of this state who owns a motor vehicle registered in another state but is principally garaged in this state

what is the purpose of the north Carolina fair plan

provide property coverage to persons outside oothe standard markets

Every insurer who writer essential property insurance in this state must be a member of the North Carolina Insurance Underwriting Association

As a condition of its authority to continue to transact the business of insurance in North Carolina

Every insurer who writes essential property insurance in this state must be a member of the North Carolina Insurance Underwriting Association

As a condition of its authority to continue to transact the business of insurance in North Carolina

When an insurance producer conducts business under any name other than the producers legal name they must

Before using the assumed name.

an insurer may be exempt from coverage under the North Carolina Motor vehicle reinsurance facility by the direct authority of

Board of governors

Insurance companies are required to provide proof of loss forms to the claimant within how many days after receipt of notice of loss?

15 days (when any company under any insurance policy requires a written proof of loss after notice of the loss has been given by the insured or beneficiary the company must furnish a blank form within 15 days)

Agents must complete how many hours of CE(continuing education) every year

24 hours

What is the continuing education requirement in Ethics for agents in this state?

3 hours every two years

SDIP surcharges are applied to premiums for what time period?

3 years

How many days prior to an insurer becoming insolvent may a claim be covered by the North Carolina Insurance Guaranty Association?

30 days

The initial binding period for the new workers compensation coverage issued by the North Carolina Rate Bureau is

30 days

The minimum liability limits that can be written in the North Carolina Reinsurance facility are

30/60/25

In North Carolina a Commissioner serves a term for how many years?

4 year term

The North Carolina Motor Vehicle Reinsurance Facility was created to provide auto insurance for otherwise difficult to place risk. The facility is made up of

All insurers licensed to write auto liability insurance in the state

who is considered a nonresident agent?

An agent who resides and is licensed in another state, but who is authorized to transact insurance in this state

The perils covered by the Beach Area Property Plan include all of the following EXCEPT

Flood-(insurance must be purchased from NFIP)

What is the purpose of SDIP

To distinguish between safe and high risk drivers

The North Carolina Insurance Underwriting Association has all of the following powers Except

To engage in writing policies of insurance for town and county mutual insurance associations

All of the following identify purposes of the insurance information and privacy act except

To establish fair and marketable advertisement procedures

what is the purpose of a cease and desist order?

To prevent a producer or insurer from further violating laws for transacting insurance.

What document is required for an insurance company to transact insurance?

certificate of authority

A banker is ready to close on a customers loan. The bank is prepared to offer the loan but only if the customer purchases a life insurance policy from the bank in the amount of the loan. This is an example of

coercion

An agent received a cash premium payment 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

what are producers required to do in order to renew their license

complete continuing education hours and pay a renewal fee.

If a producer makes maliciously critical statements about another insurer, what is this illegal practice called?

defamation

When a producer was reviewing a potential customers coverage written by another company the producer made several remarks that were maliciously critical of that insurer. The producer could be found guilty of

defamation

Two individuals who are in the same risk and age class are charged different rates for their insurance policies due to an insignificant factor. What is this called?

discrimination

insures are classified according to their domicile. What are the three types of insurers?

domestic, foreign and alien

SDIP-safe driver incentive plan

established to differentiate between safe drivers and those with records of at fault accidents and major or minor moving traffic violation convictions

What type of insurer is formed under the laws of another state?

foreign

An insurer devises an intimidation strategy in order to corner a large portion of the insurance market. Which of the following best describes this practice?

illegal

all of the following are considered unfair trade practices in the business of insurance except

sharing commissions

in order for an insurer to deviate from the rates set by the bureau the deviation must be approved by the commissioner and be based on

sound actuarial principles

who owns stock in companies

stockholders

If the commissioner of insurance is unable to complete their term,

the governor appoints a replacement

insurance agents licensed in this state must complete continuing education every 2 years by

the last day of the licensees birth month

To maintain their insurance license agents are required to complete how many hours of continuing education every 2 years?

24 hours

Under North Carolina's financial responsibility insurance law, insurers may NOT issue a policy to a resident with limits less than

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

How long must a complaint record be maintained?

5 years

The Commissioner must examine every domestic insurer at least once every

5 years

after a claim has been settled, insurance companies are required to keep records pertaining to the claim for at least

5 years

An automobile rate filing made by the North Carolina Rating Bureau is deemed to be approved after

50 Days

an automobile rate filing made by the North Carolina Rating Bureau is deemed to be approved after

50 days

If a PAP is terminated for any reason other than nonpayment of the premium the effective date may be how many days from the date the notice is mailed

60 days

In North Carolina a person who violates the law for false pretenses and cheats maybe found guilty of a/an

felony

The requirement that agents must account for and promptly remit all insurance funds collected is known as what type of agent responsibility?

fiduciary

In general, who can be excluded from producer licensing and examination requirements?

insurance company officers directors or any other employees who do not transact insurance and who do not receive commissions for their services (usually their responsibilities include administrative executive or clerical)

Who may share in the commission from the sale of a life insurance policy?

only producers properly licensed for the type of insurance transaction

An agent offers a client free tickets to a sporting event in exchange for the purchase of an insurance policy. What is the agent guilty of?

rebating

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

rebating

The North Carolina Insurance Underwriting Association has all of the following powers except

to engage in writing policies of insurance for town and county mutual insurance associations

Illegal

to participate in any boycott coercion or intimidation that is intended to restrict fair trade or create a monopoly

Which type of misrepresentation persuades an insured, to his or her detriment, to cancel, lapse or switch policies from one to another?

twisting

Which type of misrepresentation persuades an insured, to his or her detriment, to cancel, lapse, or switch policies from one to another?

twisting

pretext interview

used to obtain information from a person for the purpose of investigating a claim where, based upon specific information available for review by the commissioner there is a reasonable basis for suspecting criminal activity, fraud, material misrepresentation or material nondisclosure in connection with the claim

When is a producer allowed to charge a service fee in addition to the premium for the processing of an application for insurance?

when consented to in writing by the applicant

When would a misrepresentation on an insurance application be considered fraud?

when it is intentional and material

When can the Commissioner or Director examine insurers?

whenever deemed necessary but at least once every few years

On behalf and on request of an insurer by which an agent or limited representative is appointed, the agent or limited representative may from time to time act as an adjuster and investigate and report upon claims however he may do so

without being licensed as an adjuster

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

15 days

The Post-Assessment Insurance Guaranty Association Covers which type of direct insurance?

Automobile Insurance

By what date must agents complete the required continuing education?

By the last day of the licensee's birth month every 2 years

The Commissioner has the power to examine and investigate the affairs of every insurance institution or agent doing business in North Carolina to determine which of the following

If the insurer remains solvent and conducts business in compliance with state laws and regulations

To whom may a certificate of authority be issued?

To an insurer authorized to transact business in this state