State Law and Regulations - Chapter 20 (Law Supplement Practice Exam Section)

*I. General Insurance* How much may the Commissioner fine an *insurer* for each violation of cease and desist order?

$10,000

*III. Casualty Insurance* Which of the following are the minimum limits of liability any individual must provide for for bodily injury and property damage?

$25,000 per person, $50,000 per accident for bodily injury, and $15,000 for property damage

*I. General Insurance* How many hours of continuing education must be in approved courses in the line of insurance for which the producer is licensed?

18

*I. General Insurance* A producer has how many days to file a written response to the Commissioner after he has been terminated by his appointing insurer?

30

*II. Property Insurance* An insurer may not cancel or refuse to renew a homeowners insurance policy unless the insurer gives the the insured at least how many days advance notice?

30

*III. Casualty Insurance* When an automobile policy is cancelled for a reason other than nonpayment of premium, how many days notice must be provided to the insured?

30

*I. General Insurance* The Commissioner gives approval to an insurer to do business in Colorado in a certificate of

authority

*I. General Insurance* The Commissioner may

conduct investigations and subpoena witnesses whenever he deems it necessary

*I. General Insurance* Which of the following statements regarding the payment of commissions is NOT correct?

- A producer may share commissions with another licensed producer. - A producer may not share commissions with unlicensed persons. - A producer may not charge additional fees not included in his commissions for soliciting and procuring insurance or for servicing existing policyholders. - *A producer cannot share commissions with a licensed nonresident producer.*

*III. Casualty Insurance* An insurer must notify an insured at least how many days before increasing the premium on a policy?

45

*II. Property Insurance* If an insurer fails to give the appropriate amount of notice prior to a premium increase on a commercial policy, the company is required to extend the policy for what additional length of time?

45 days

*I. General Insurance* The Commissioner must examine every insurer doing business in Colorado at least once every

5 years

*III. Casualty Insurance* All owners of motor vehicles in Colorado must have in effect at least the following legal liability coverage for bodily injury or death arising out of the use of the motor vehicle to a limit of what amount?

$25,000 to any one person in any one accident

*I. General Insurance* For each violation of a cease and desist order, how much may the Commissioner fine an individual?

$500

*III. Casualty Insurance* When a work related injury results in death, what amount is payable for reasonable funeral and burial expenses under Colorado's workers compensation laws?

$7,000

*I. General Insurance* An insurer who terminates a producers appointment must inform the Commissioner within how many days?

30

*I. General Insurance* All of the following may result in license suspension or revocation EXCEPT

- *making a factual but subjective comparison of 2 policies* - intentionally violating a cease and desist order - making a false statement in a license application - violating an insurance regulation

*II. Property Insurance* Which of the following statements regarding insurance and loans secured by real property is CORRECT?

- A lender may require a borrower who has a loan secured by real property to provide property insurance greater than the replacement value of the property. - *A lender may not require a borrower who has a loan secured by real property to provide property insurance in excess of the replacement value of the property.* - It is up to the borrower to determine the amount of insurance. - The lender has no restrictions on the amount of property insurance it may require a borrower to purchase.

*II. Property Insurance* Under the Fraudulent Claims and Arson Information Reporting Act, which of the following is considered an authorized agency?

The Colorado Bureau of Investigation

*III. Casualty Insurance* If a member of an applicants household submitted 7 claims under an auto mobile policy during the past year, the proposed insurer may:

offer to exclude the household member from the policy

*III. Casualty Insurance* which of the following statements about the nonrenewal of auto policies is CORRECT?

- An insurer can refuse to renew a policy because another insurer has cancelled a prior policy. - At least 10 days written notice must be given prior to nonrenewal. - An insurer can refuse to renew a policy based on the insureds occupation, including military service. - *An insurer cannot refuse to renew a policy because of convictions for traffic violations that result in 7 points being assessed if received while driving a commercial vehicle for work.*

*III. Casualty Insurance* Motor vehicle insurance policies must include uninsured motorist for losses resulting from all of the following EXCEPT

- bodily injury - *consequential damage* - death - sickness

*I. General Insurance* All of the following are violations of Colorado insurance law EXCEPT

- charging individuals of the same class different premium rates - offering tickets to a football game as an incentive to purchase a policy - *informing a new policyholder that his new policy, if inadvertently lapsed for nonpayment of premium, could be reinstated upon reapplication* - having an interdependent arrangement to sell stock to a person contingent upon the purchase of an annuity

*III. Casualty Insurance* When an auto policy has been in effect for more than 60 days, it may be cancelled for any of the following reasons EXCEPT

- failure of the insured to pay the policy premium - suspension or revocation of the insureds drivers license - making a false statement on a claim submitted under the policy - *failure to enact reasonable loss control measures*

*I. General Insurance* All of the following are duties of the Commissioner EXCEPT:

- keeping records of the insurers that he has examined - adopting rules and regulations - *writing insurance laws* - issuing insurance licenses to qualified individuals and companies

*I. General Insurance* All of the following are considered unfair trade practices EXCEPT

- misrepresentation - rebating - *replacement* - coercion

*I. General Insurance* All of the following are example of unfair claim settlement practices EXCEPT

- requiring both a claimant and physician to fill out extensive proof of loss forms - denying a claim promptly but without explaining the coverage or laws on which the denial is based - *paying a claim promptly after liability has become reasonably clear* - denying a claim without making an investigation

*III. Casualty Insurance* When it comes to establishing rate standards, medical malpractice insurers must consider all of the following EXCEPT

- risk management activities - underwriting standards - tort reform legislation - *long term medical expenses*

*I. General Insurance* All of the following insurance practices are illegal in Colorado EXCEPT

- soliciting or procuring insurance without a license - paying a fee for services of an insurance producer to anyone who is not properly licensed - inquiring about an applicants sexual orientation in connection with an application - *comparing policies*

*III. Casualty Insurance* All of the following are methods an employer can use to insure its workers compensation obligation EXCEPT

- the Colorado compensation insurance authority fund - a stock or mutual company authorized to transact workers compensation insurance - an approved self insurance plan of the employer - *a group of captive workers compensation insurance plan*

*III. Casualty Insurance* It is a violation of Colorado law for an insurer to refuse an applicant for auto insurance based solely on any of the following EXCEPT

- the applicant had no prior insurance - the applicant was previously insured under the assigned risk plan - the applicant was previously insured with an insolvent insurer - *the applicant was convicted of a major traffic violation*

*II. Property Insurance* When a homeowners insurance policy is cancelled for nonpayment of premium, how many days notice must be provided to the insured?

10

*I. General Insurance* For good cause, the Commissioner can grant licensees an extension of how many months to complete their continuing education?

12

*III. Casualty Insurance* An injured employee must generally file a claim for workers compensation benefits within what time period after the injury occurred?

2 years

*III. Casualty Insurance* Which of the following provides motor vehicle insurance to those applicants who would otherwise be uninsurable?

Colorado Auto Insurance Plan

*III. Casualty Insurance* Under the Colorado workers compensation law, which of the following would NOT be covered?

Heart related illness resulting from hereditary causes

*II. Property Insurance* What should an insurer do if it suspects that a fire causing a loss to its insured property is caused by arson?

Notify an authorized agency to have the fire loss or claim investigated

*III. Casualty Insurance* Which of the following is NOT considered a commercial exposure?

Personal Liability

*III. Casualty Insurance* Under Colorado Law, an insurer may do which of the following with regard to the provision of uninsured motorists coverage?

Provide coverage for the same amount as the policy's bodily injury liability limits

*III. Casualty Insurance* Which of the following is a reason to cancel or nonrenew an auto policy?

The insured willfully made a false material statement on a claim under the policy

*III. Casualty Insurance* What happens if workers compensation benefits and periodic Social Security benefits are both payable to an employee?

The workers compensation benefits can be reduced

*I. General Insurance* Bob, an insurance producer, publishes a written statement that is false and derogatory. It concerns the financial condition of AllPro Insurers and is designed to injure the company's reputation. This can be considered an act of

defamation

*I. General Insurance* A person may not act as a Colorado producer unless he or she

has qualified to become a licensed insurance producer

*II. Property Insurance* Under the Colorado Fraudulent Claims and Arson Information Reporting Act, no person or authorized agency may

intentionally withhold relevant information requested by an authorized agency

*I. General Insurance* To motivate a buyer to sign an application for insurance, a producer promises a gift equal to one-half of the commission. This is an example of

rebating

*I. General Insurance* When an insurer terminates a producers appointment, the insurer must notify

the Commissioner and Producer

*I. General Insurance* When appropriate, the Commissioner reports a violation of insurance law to

the appropriate district attorney

*I. General Insurance* An insurance producer who solicits insurance on behalf of an insurer represents

the insurer

*III. Casualty Insurance* If an insured chooses NOT to purchase uninsured motorists coverage

the insurer is not required to notify the policyholder in renewal notices about the availability of such coverages

*I. General Insurance* A license is deemed to used for controlled business if during any 12 month period

the licensee's total premiums on controlled business exceeded the total premiums on all other business