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LICENSING EXAM - Property and Casualty > chapter fifteen - state laws > Flashcards

chapter fifteen - state laws Flashcards

1
Q

Which of the following statements is false regarding Mexican surplus lines brokers?

A Mexican surplus lines broker must be a resident producer of Arizona

A Mexican surplus lines broker must be licensed and maintain an office in Arizona

Mexican surpluc lines insurance is not regulated by the state of Arizona

Mexican surplus lines insurance is not protected by the Arizona Guaranty Association

A

A Mexican surplus lines broker must be a resident producer of Arizona.

A Mexican surplus lines broker may be a resident or a nonresident producer of Arizona, as long as they maintain an office in Arizona.

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2
Q

Which of the following statements is true regarding insurance vending machines?

The vending machine must display the insurer’s information but not the producer’s

Once granted, the authority to issue insurance via vending machine does not expire

Insurance vending machines may have insurance from unauthorized insurers

The Director must find the policy suitable for vending machines or it may not be solicited

A

The vending machine must display the insurer’s information but not the producer’s

A vending machine must display the identification of both the insurer and producer. A policy may not be solicited through a vending machine if the Director finds the kind of insurance form of policy is unsuitable for sale through vending machines. A producer may only issue policies from authorized insures, and the producer’s authority expires at the same time as their license.

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3
Q

Each personal auto insurer in Arizona must offer UM/UIM coverage in what amount?

30/60/15

20/40/10

50/100/10

25/50/15

A

25/50/15

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4
Q

Which of the following is not a requirement that a business entity must comply with in order to become licensed?

Identify a licensed producer who will be responsible for compliance

Ensure that employees who act as a producer are licensed

Ensure that all officers, directors, and partners are licensed

Provide the Director names of all employees

A

Ensure that all officers, directors, and partners are licensed.

A business entity must ensure that any office, director or partner who acts as an agent be licensed.

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5
Q

A licensing candidate must be at least _____ years of age to be licensed.

There is no age requirement

18

21

25

A

18.

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6
Q

All the following are examples of boycott, coercion, or intimidation, except:

Requiring a mortgager to pay a handling charge on a policy to secure a loan

Unreasonably disapproving a policy that provides requisite coverage

Offering a premium discount or credit that is not specified in the policy

Convincing a debtor to getting a requisite insurance through a particular agent

A

Offering a premium discount or credit that is not specified in the policy.

Offering a premium discount or credit not specified in the policy is an example of rebating.

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7
Q

Which of the following acts constitutes an unfair claims settlement practice?

Frequently denying claims based on facts and law

Routinely settling claims without conducting an investigation

Often settling claims for amounts higher than the claimant expects

Regularly denying claims when the insured is not liable

A

Routinely settling claims without conducting an investigation

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8
Q

Which of the following is not an additional line of producer license authority in Arizona?

Travel insurance

Personal auto insurance

Rental car agent

Self-service storage agent

A

Travel insurance.

Personal auto insurance is a part of a property and casualty licensee’s authority. Additional lines of authority may be issued by the Director, including rental car agent, self-service storage agent, title insurance agent, limited lines portable electronics, limited lines travel insurance, and qualification to issue variable annuities.

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9
Q

The Director may take any of the following disciplinary actions, except:

Order payment of fines of up to $2,500 if the licensee committed an intentional violation of insurance law

Suspend a license if the producer provided incorrect or incomplete information on a license application

Suspend or revoke a license if the licensee forged a client’s signature on an application

Suspend a license for up to 2 years if the producer is convicted of a misdemeanor

A

Suspend a license for up to 2 years if the producer is convicted of a misdemeanor.

The Director may only suspend a license for up to 12 months and may revoke a license for a felony conviction.

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10
Q

A producer who pays the first 6 months premium for a friend while writing a life insurance policy is guilty of __________.

Paying improper fees

Rebating

Providing prohibited inducements

Defamation

A

Rebating

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11
Q

A licensee must complete at least how many hours of continuing education offered by an approved provider?

36

48

21

24

A

48.

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12
Q

Which of the following is included in the Telemarketing Sales Rule?

Require the telemarketer have a script to read to consumers

Immediately disconnect callers who ask not to be called again

Set limits on the time a telemarketer can call consumers

Suggest payment guidelines for the sale of certain services

A

Set limits on the time a telemarketer can call consumers.

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13
Q

An insurer discontinued a policies that had been posted online. How long must the insurer allow the information for the policy to remain accessible?

2 years

1 year

3 years

5 years

A

5 years.

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14
Q

Which of the following is an act constituting an improper claim settlement practice?

Failure to complete its investigation of a claim within 15 days of receiving notice

Failing to acknowledge receipt of a claim within 10 working days

Failure to pay a first party claim within 5 days after receipt of the proof of loss

Failure to advise claimants, in writing, of the acceptance or denial of claims within 5 working days

A

Failure to acknowledge receipt of a claim within 10 working days.

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15
Q

The Drive Other Car endorsement is used to insure which of the following?

A person who doesn’t own any car

A person who co-titled the car

A person who occasionally borrows the car

A person who is visiting for 6 months

A

A person who doesn’t own any car.

The Drive Other Car endorsement is for the person who does not own the car and will be provided coverages, including Unisnured Motorist higher limits of coverage.

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16
Q

Which of the following is a true statement about the Arizona uninsured/underinsured motorist coverage?

Uninsured motorist coverage can be rejected by the insured

A volunteer worker’s injuries from an uninsured driver are excluded

Underinsured motorist coverage applies if the insurer for the negligent party is insolvent

If more than one policy applies to the same accident, the coverage will be proportionate based on the limits of liability

A

Uninsured motorist coverage can be rejected by the insured.

The insurer must offer uninsured and underinsured motorist coverage, but the insured can reject it in writing

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17
Q

When may an insurance company discriminate based on blindness?

Never

When charging premium rates

When cancelling insurance

At the time of application or insurance

A

Never

18
Q

If an insured only has Liability coverage when they purchase a replacement auto, when must they notify the insurer?

4 days

10 days

The day of purchase

14 days

A

4 days.

If an insured has a newly acquired auto, they must inform the insurer of the purchase within 4 business days if the Declarations page indicates that the insured does not have Collision or Other Than Collision coverage.

19
Q

A licensed producer was using another name to transact insurance in New Mexico, but the New Mexico Division of Insurance fined the producer $1,000. Within how many days must the producer notify the Arizona Director of Insurance?

20

10

30

There is no requirement to notify the Department

A

30

Not only must a licensed producer report any disciplinary action by the insurance regulatory agency of any other state or territory of the United States to the Director within 30 days, but the producer must also notify the Director before using an assumed name.

20
Q

In Arizona, if an insured misses a payment on their personal auto policy, how long do they have to pay the premium before the policy is cancelled?

7 days

10 days

5 days

21 days

A

7 days.

In Arizona, the grace period for personal auto policies is 7 days. After this, the insurer may mail a notice of cancellation, which is effective once the notice is mailed.

21
Q

Which of the following is an example of false financial statements?

An agent alters records of premiums received, knowing that the insurance company will be audited by the Director

An agent conceal the amount of the policy’s benefits during solicitations

An agent retains records for a 3-year period and provides them for examination

An agent incorrectly writes a financial statement and later corrects it

A

An agent alters records of premiums received, knowing that the insurance company will be audited by the Director

22
Q

Choose the incorrect statement regarding the Subsequent Injury Fund:

The Fund reviews claims involving a pre-existing injury and a subsequent work-related injury

The Fund will determine if permanent compensation can be apportioned between the Fund and insurer

Reimbursements will be made to the insurer after apportionment requests are approved

2% of all premiums received by private insurance carriers in the preceding year go into the state treasury

A

2% of all premiums received by private insurance carriers in the preceding year go into the state treasury

The industrial commission can direct the payment into the state treasury of up to 1.5% of all premiums received by private insurance carriers during the immediately preceding calendar year.

23
Q

Producer B tells applicants that if they buy their insurance with the producer’s agency, the applicants will be refunded the first month’s premium. This is an example of which unfair trade practice?

Coercion

Unfair Discrimination

Rebating

Misrepresentation

A

Rebating

24
Q

Which state plan provides coverage to employers who cannot obtain insurance in the normal market?

Industrial Commission

Workers’ Compensation Insurance Plan

Assigned Risk Plan

Arizona Workers’ Compensation Fund

A

Assigned Risk Plan

25
Q

A policy cannot be issued in Arizona without identifying the name of the producer. Which of the following is a policy that is exempt from this rule?

Liability insurance

Policies issued through producers who receive commission

Policies issued by a vending machine

Life insurance

A

Policies issued by a vending machine.

Policies issued by a vending machine are not required to identify the producer on the Declarations page of the policy or on any endorsement. The vending machine itself must identify the producer and the insurer.

26
Q

In the event of nonrenewal or cancellation of commercial risks for reasons other than nonpayment of premium, the insurer must give the named insured ______ days’ notice.

60

10

30

45

A

45

In the event of nonrenewal and cancellation of commercial risks, the insurer must give the insured 45 days’ notice. Cancellation for nonpayment requires 10 days’ notice.

27
Q

In the event of premium increase, change in deductible, reduction in limits, or substantial reduction in coverage, the insurer must give the insured notice of at least ____ days before the expiration date of the policy.

60

10

45

30

A

30

In the event of premium increase, change in deductible, reduction in limits, or substantial reduction in coverage, the insurer must give the insured notice of at least 30 days before the expiration date of the policy.

28
Q

A vehicle with a load capacity in excess of _________ pounds is not an eligible motor vehicle in Arizona.

1,500

500

1,000

2,000

A

1500

A motor vehicle is defined in Arizona as a licensed, land, motor-driven vehicle with a load capacity of no more than 1,500 pounds, is not used as a public or livery conveyance, in business transporting passengers for hire, or primarily transporting property or equipment.

29
Q

Which of the following is false regarding surplus lines brokers in Arizona?

A surplus lines broker is licensed to procure insurance through an unauthorized insurer

A surplus lines broker must also be licensed as a property and casualty producer

The Director must find the individual competent and trustworthy before issuing a license

The surplus lines license must be renewed every 2 years

A

The surplus lines license must be renewed every 2 years.

In Arizona, a surplus lines license is renewable on the same terms as other producer licenses, which is every 4 years.

30
Q

Upon the passing of a licensing examination, the Director will issue what type of license to the applicant pending completion of their background investigation?

Probationary

Temporary

Conditional

Permanent

A

Conditional.

Upon the passing of a licensing examination, the Director will issue a conditional license to the applicant pending completion of the background investigation. On completion of the background check and depending on the results, the Director may issue a permanent or probationary license.

31
Q

In Arizona, the insurer’s right to recover payment under Medical Payments does not apply to the first _________ paid.

$2,000

$5,000

$500

$1,500

A

$5,000

31
Q

In Arizona, the insurer’s right to recover payment under Medical Payments does not apply to the first _________ paid.

$2,000

$5,000

$500

$1,500

A

$5,000

32
Q

If an insured does not have Collision or Other Than Collision coverage, and they are in an accident before they inform the insurer of a newly acquired auto, which of the following would be true?

If the insured notifies the insurer within 14 days of purchase, and adds Collision coverage, the loss will be covered

The loss will not be covered because the insured did not notify the insurer before the loss

The loss will not be covered because the insured did not have Collision coverage

If the insured notifies the insurer within 4 days of purchase, and pays a $500 deductible, the loss will be covered

A

If the insured notifies the insurer within 4 days of purchase, and pays a $500 deductible, the loss will be covered

33
Q

If a first party claim is not paid within how many days after the receipt of adequate proof of loss, the insurer must pay interest from the date the claim is received?

10

15

30

20

A

30

34
Q

According to Arizona’s UM/UIM coverage, what happens if more than one policy applies to the accident?

UM/UIM coverage is primary if another policy applies to the accident

The insured can select which policy will apply first

UM/UIM coverage is excess if another policy applies to the accident

The insured can select one policy that will apply

A

The insured can select one policy that will apply.

If more than one policy applies to the same accident, the insured may select the one policy that will apply.

35
Q

Before granting a license, the Director may ask for which of the following type of information?

Copy of tax returns

Verification of medical history

A set of fingerprints

Proof of college degree

A

A set of fingerprints

36
Q

Which of the following applies when the Director revokes a producer’s license for violating the Insurance Code?

Producer must deliver the license to the Director

Producer can write surplus lines coverage with nonadmitted companies

Producer can write business for another producer

Producer’s revoked license will not be valid for 3 years

A

Producer must deliver the license to the Director

Upon suspension or revocation, the licensee must deliver the license to the Director, and the Director will not consider issuing a new license for 1 year.

37
Q

If an insurer notifies an insured of their eligibility for the Arizona Automobile Liability Plan, what most likely just occurred?

The insured’s policy was cancelled

The insured increased their limits of liability

The insured purchased a new policy

The insured’s policy was renewed

A

The insured’s policy was cancelled.

Insurer’s are required to notify an individual of their possible eligibility for the Arizona Automobile Liability Plan when the insurer has cancelled or nonrenewed the policy.

38
Q

How many hours of ethics must be included in the total of 48 hours of continuing education a producer must complete to renew a license?

6

3

15

10

A

6

38
Q

How many hours of ethics must be included in the total of 48 hours of continuing education a producer must complete to renew a license?

6

3

15

10

A

6

39
Q

A personal property policy that has been in effect for ________ days or more can be cancelled for nonpayment of premium.

60

30

90

120

A

60

LICENSING EXAM - Property and Casualty (16 decks)

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