P&C Quiz Flashcards by Kirsten Humes

Which time period is incorrect?

a. 30 days to report a change of address
b. Four years to complete 24 hours of continuing education
c. One year to be licensed after successful completion of the test
d. 30 days to report charges of criminal conduct

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All of the following could be insurance department disciplinary actions for producer misconduct except:

a. Prosecuting the producer in criminal court
b. Suspending a current license
c. Refusing to renew a current license
d. Denying the issuance of a license

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Which action is not a violation of the Unfair Trade Practice Law?

a. Rebating
b. Misrepresentation
c. Larceny
d. Subrogating

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Which statement is incorrect?

a. PC rates must be adequate, not excessive and not unfairly discriminatory
b. Compelling insured’s to instigate litigation to recover claim amounts due is not a violation of the Unfair Claims Practice Law
c. A power and duty of the Insurance Commissioner is to collect fees
d. An admitted insurance company’s license is called a certificate of authority

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All the following are violations of the Unfair Trade Practice Law except:

a. Requiring a down payment with the application
b. Forging a client’s name on insurance application
c. Splitting your commission with a prospective policyholder
d. Representing a Homeowners HO-2 Broad Form as open perils coverage

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All the following are examples of federal legislation that directly affect the insurance industry and producers except:

a. Terrorism Risk Insurance Act
b. Graham-Leach-Bliley Act
c. Howard-Fine-Howard Act
d. Motor Carrier Act of 1980

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Which statement is incorrect?

a. Insurance agency employees who sell, solicit or negotiate contracts of insurance must be licensed
b. Insurance agencies that are corporations do not have to be licensed
c. A producer must complete 24 hours of continuing education every two years
d. The fee to renew a property casualty producer’s license for two years is $55

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Which statement is incorrect?

a. The maximum period for a temporary license is 180 days
b. The maximum jail term for insurance law violations is three months
c. A producer operating under a fictitious or assumed name must file it with the PA Department of State prior to doing business
d. The insurance commissioner may issue a cease and desist order to any producer

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What must be filed and approved by the Insurance Department prior to it’s use?

a. Insurance company production contests
b. The insurance agency’s new building plans
c. Covered payments for a Business Income claim
d. Insurance company rates, rating plans and forms

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For an insurance producer to represent a client as a “broker” he or she:

a. Must have a written agreement with the client
b. Must disclose any fees for services
c. Cannot charge a fee to complete an application
d. All of the above

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The Federal Terrorism Risk Insurance Act:

a. Applies to commercial property and business income losses
b. Applies to workers compensation losses
c. Both a and b
d. Neither a nor b

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Which statement is incorrect?

a. TRIA requires a disclosure of the premium and an opportunity for the client to reject coverage in writing
b. The Motor Carrier Act of 1980 requires financial responsibility for transportation of hazardous cargo by motor vehicle
c. There are federal fraud laws that regulate insurance but there are no Pennsylvania fraud laws
d. The Federal Fair Credit Act does not require that the client be given a copy of the consumer report

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“Misrepresentation” is:

a. Misrepresenting policy benefits, terms or conditions
b. Misrepresenting policy dividend projections
c. Both a and b
d. Neither a nor b

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All of the following are steps that must be completed to be licensed, except:

a. Complete 48 hours of community service
b. Apply for a license by submitting an application and the appropriate fee
c. Complete a 24 pre-licensing requirement
d. Pass the required exam

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Which statement is incorrect?

a. The property-casualty exam is waived for a CPCU designee
b. A resident producer may either live or work in Pennsylvania
c. The fee for a property casualty resident producer is $110 every 2 years
d, Initial resident producer applicants are required to be fingerprinted

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Pennsylvania Property Rate Regulatory Law requires rates to be:

a. Adequate, equal for all classifications and submitted in a timely manner
b. Adequate, not excessive and not unfairly discriminatory
c. Not excessive and never discriminatory
d. Filed and used prior to being approved by the insurance department

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All are violations of the Unfair Claims Practice Law except:

a. Failure to have reasonable standards for prompt claims investigation
b. Compelling insureds to institute litigation to recover amounts due
c. Refusing to pay claims without a reasonable investigation of all available information
d. Requiring the policyholder to report the claim promptly

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The Federal Fair Credit Reporting Act:

a. Requires a copy of the report be given to the prospect
b. Requires all applications submitted to at least two reporting agencies
c. Requires the prospect be given the name and contact information of the reporting agency if the insurance is declined
d. Requires the agent must notarize all correspondence

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The TCPA (Telephone Consumer Protection Act)

a. Limits phone calls to after 10 am and before 11pm
b. Requires solicitors to maintain a Do Not Call List
c. Does not apply to faxes
d. Does not establish fines for infractions

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Graham-Leach-Bliley Act Privacy Law:

a. Allows customers to “opt out” of sharing any private information
b. Requires an annual privacy notice be given to all customers
c. Requires all personal financial information be kept secure
d. All of the above

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All of the following are true, except:

a. Risk can be defined as the uncertainty of financial loss
b. A hazard is a condition or situation that increases the chance of loss
c Retention involves a transfer of risk
d. A peril or cause of loss is an event that causes damage or destruction to property

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Insurance can be defined as:

a. A legal contract
b. A transfer of risk
c. A pooling of funds to pay for the large losses of a few
d. All of the above

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Elements of an insurable risk include all the following except

a. Intentional loss
b. Definite loss in time, place and amount
c. Not catastrophic events
d. Reasonable cost to insure

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All of the following are classifications of Insurers except:

a. Mutual insurance companies
b. Stock insurance companies
c. Virtual insurance companies
d. Lloyds of London insurance companies

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Which statement is incorrect? a. Domestic insurance companies insure domestic servants b. Admitted insurance companies are licensed to write business in PA c. Alien insurance companies are located outside the U.S.A. d. A producer can place business with a non-admitted company through a Surplus Lines Producer

All of the following are able to legally enter into a contract except: a. A retired person b. A convict currently serving a prison sentence c. A person under psychiatric counseling d. A 16 year-old student

Which statement is incorrect a. Material misrepresentation is a valid reason for cancellation of an insurance policy b. Representations are oral or written statements of fact at time of application that must be absolutely correct or they will void the insurance policy c. An insurance policy is a legal contract of utmost good faith d. Concealment of a material fact may be a valid reason to cancel an insurance policy

An example of a producer's express authority would be: a. Authority by estoppel b. An email from the underwriter authorizing binding coverage c. The producer's agency contract d. Both b and c

All of the following statements are correct except: a. Insurable interest must exist at time of loss for property insurance b. Adverse selection is defined as picking the wrong employee for an agency position c. Insureds with similar underwriting characteristics (homogeneous) are placed into classes and charged the same class rate. d. Experience rating is a form of a merit rate

Which statement is incorrect? a. Wet leaves on a sidewalk would be a physical hazard b. An open perils contract will have more exclusions than a corresponding named perils contract c. The terms "basic" and "broad" indicate open perils d. Before there can be a covered indirect loss, there must be a covered direct loss

Blanket insurance is or can be: a. One limit for two or more different types of property b. One limit for the same type of property at two or more different locations c. One limit for both property and liability coverage d. Both a and b

All of the following can be valuation methods used in insurance contracts except: a. Book value b. Replacement cost c. Functional replacement cost d. Actual cash value

Coinsurance is: a. A method to encourage insurance to value b. Is used in both property and casualty insurance policies c. Both a and b d. Neither a or b

Legal liability can be established by all of the following laws except: a. Murphy's law b. Common law c. Statutory law d. Contract law

Two drivers have a collision and they both have damages to their respective automobiles in an intersection accident. James is determined to be 40% at fault and has $10,000 in damages. Peter is determined to be 60% at fault and has $10,000 in damages. Based on Pennsylvania's comparative negligence law, which statement is correct? a. James will be able to collect $6,000 b. Peter will be able to collect $4,000 c. James will be able to collect $10,000 d. Neither James nor Peter will be able to collect anything

All of the following are common law defenses, except: a. Assumption of risk b. Contributory negligence c. Comparative negligence d. Intervening cause

Which statement is incorrect? a. Aggregate limits do not reinstate until the end of the policy period b. Split limits have a per person limit for bodily injury c. Occurrence limits reinstate after each separate occurrence d. Combined single limits has a per person limit for property damage

All of the following are parts of an insurance policy except: a. Declarations b. Fixtures c. Conditions d. Exclusions

The clause in the insurance contract that permits the insurance company to seek recovery from a negligent third party who caused a loss to the insured's property is: a. Assignment clause b. Liberalization clause c. Subrogation clause d. Mortgagee clause

The Pro-Rata other insurance clause: a. Requires each insurer to pay equal amounts of each loss up to the limits they carry b. Requires each insurer pay its proportionate share based on its limit of insurance compared to the total limit of all insurance c. Requires an insurer to return all earned premium if the policy is cancelled d. Requires all primary insurance be exhausted before any payment is made

A person not specifically named in the policy that is given insured status because they fit in a category or class of persons is an: a. Automatic insured b. First named insured c. Additional insured d. A named insured

Construction described as exterior walls of masonry materials and wood frame ceiling and floors is: a. Frame b. Fire resistive c. Joisted masonry d. Fire proof

Which of the following situations under dwelling conditions describes how the insurer will settle a loss? a. Pay the replacement cost of a pair of candlesticks when only one is damaged b. The insurer has the option to repair the property to pre-loss condition c. If the loss is covered by other insurance the dwelling policy says nothing d. Damaged personal property is paid at full replacement value

Under which DP form is the dwelling covered under open perils and the personal property covered on a broad named peril basis? a. DP – 1 b. DP – 2 c. DP – 3 d. DP – 4

A DP-2 policy covers all of the following, EXCEPT: a. Damage to the dwelling caused by burglars b. Theft of copper water pipes c. Accidental discharge of steam from within a plumbing system d. Tree falling on the dwelling causing roof damage

Under a Dwelling Policy (DP), which policy condition can be used to resolve the dispute when the insurer and the insured cannot agree on the amount to be paid on a covered loss? a. Arbitration b. Appraisal c. Subrogation d. Litigation

Which of the following would represent the primary coverage under an H0-4? a. Coverage A b. Coverage B c. Coverage C d. Coverage D

Under which coverage would a fence be covered in an HO policy? a. Coverage A b. Coverage B c. Coverage C d. Coverage D

Which of the following does an HO-6 provide? a. Coverage for a tenant living in a condominium b. Coverage for dwelling and personal property of a condominium owner c. Open peril coverage on the dwelling for a condominium owner d. Coverage for the repairs of the common areas of a condominium

Which of the following is the special limit of coverage on the HO policy for theft of firearms? a. $1,000 b. $1,500 c. $2,000 d. $2,500

All of the following are covered causes of loss under the HO-2 Broad form, EXCEPT: a. Backup of sever water through a sewer or drain b. Lightning damage to the dwelling c. Freezing of plumbing d. Fire damage to kitchen after a stove flare up

Which of the following would be covered under an HO-5 but not an HO-2? a. Insured’s 3 year old son accidentally throws the Wii remote through the wall mounted flat screen TV b. Toilet overflows causing ceiling and wall damage c. Windstorm blows a tree onto roof causing damage d. Theft of the insured’s laptop

Under the earthquake endorsement on the HO policy, a single earthquake constitutes all shocks that occur within ____________? a. 24 hours b. 36 hours c. 48 hours d. 72 hours

Which statement is incorrect concerning the Personal Auto Policy? a. Pennsylvania financial responsibility limits for liability are 15/30/5 b. A pickup truck less than 9000 GVWR and not used for business is eligible for a PAP c. Basic First Party Benefits are not mandatory d. Vehicles titled to a corporation are not eligible to be insured on a PAP

Which vehicle would qualify as a "newly acquired auto" under the PAP a. A new Chevrolet Impala titled to the named insured b. A 2012 Winnebago motor home purchased by the named insured c. A used Ford dump truck purchased by a family member d. A new Harley Davidson motorcycle purchased by the named insured

Who is not an insured under Part A Liability in Max's Personal Auto Policy? a. Max's employer when Max is running an errand for his employer and driving his own vehicle b. Max's neighbor when he borrows Max's car c. Max's resident son who takes Max's car without Max's knowledge d. Max's employer when Max is driving his employer's car

Which is not a Part A Liability exclusion in the PAP? a. Damage to property you own or are transporting b. Using your private passenger vehicle for sales calls c. Driving a non-owned motorcycle d. Using your vehicle as an Uber or Lyft driver

All of the following are Added First Party Benefits except: a. Medical expense coverage up to $100,000 b Income loss benefits up to $50,000 c. Accidental death benefit up to $25,000 d. Car rental expenses up to $1,000

Which vehicle qualifies as an "uninsured motor vehicle" a. A vehicle used as a residence b. A hit-and-run vehicle c. An off road vehicle while off road d. A vehicle operated on rails or crawler treads

All of the following are correct concerning PA's Limited Tort selection except: a. There is no premium difference between full and limited tort b. It applies to both a bodily injury claim and an uninsured motorist claim c. I can have a full tort settlement if I have a "serious injury" d. It limits my award to economic loss only

Other Than Collision applies to all these claims except: a. Hitting a deer b. Vandalism claim c. Running into the curb d. Mice chewing up the wiring harness

Which loss is covered under Part D Damage To Your Auto in the PAP? a. A stolen radar detector b. $1,000 hail damage to a non-owned trailer rented for the weekend c. A flat tire from hitting a pot hole. d. A $500 DVD collection stolen from the car

All of the following describe symbol 9 – non owned auto under the Business Auto Coverage Form, EXCEPT: a. Symbol 9 can only be used for liability coverage b. Autos owned and used by employees in the insured’s business c. Autos used in the insured’s business that are not leased, hired, rented or borrowed d. Auto not titled to an insured but available for the regular use of a named insured

The insured has a Business Auto Policy with the drive other car (DOC) coverage for named individuals endorsement. Under which of the following is the named individual covered? a. Racing a company car b. Driving a neighbor’s auto c. Driving a vehicle owned by the insured d. Family member driving a company vehicle

Which symbol provides the broadest coverage for liability under the Business Auto Coverage Form? a. Symbol 1 b. Symbol 2 c. Symbol 6 d. Symbol 7

The Business Auto Policy provides automatic coverage to: a. Trailers with a load capacity of 1,000 lbs. or less b. Trailers with a load capacity of 2,000 lbs. or less c. Trailers with a load capacity of 5,000 lbs. or less d. No automatic coverage is provided for any trailer

Which of the following is the covered territory under the Business Auto Coverage Form? a. The United States and Canada b. The United States, its territories and possessions, Puerto Rico and Mexico c. The United States, its territories and possessions, Puerto Rico and Canada d. The United States, its territories and possessions, Puerto Rico

Which of the following would be covered by a Commercial Package Policy (CPP)? a. Ocean marine risk b. Loss due to crime c. Worker injured on the job d. Small sized business

Which of the following is NOT included in the Common Policy Conditions of the Commercial Package Policy? a. Coverage territory b. Cancellation c. Inspections and surveys d. Transfer of your rights and duties under this policy

If an insurer does not renew a Commercial Package Policy, it must notify the first insured at least ___ days prior to the expiration date of the current policy. a. 15 b. 30 c. 60 d. 90

What is the limit of liability under the Building and Personal Property Coverage Form for the Additional Coverage - Fire Department Service Charge? a. $0 b. $500 c. $1,000 d. $2,500

Which of the following is NOT a filed (controlled) inland marine form? a. Commercial articles form b. Sign coverage form c. Jewelers block coverage form d. Contractors equipment floater

Under the farm policy, if a building is vacant or unoccupied for more than 120 consecutive days, all losses will be reduced by: a. 10% b. 25% c. 50% d. 100%

In the Equipment Breakdown Protection Coverage form, Ammonia Contamination, Consequential Loss, Data & Media, Hazardous Substance & Water Damage are automatically included for: a. $5,000 b. $50,000 c. $100,000 d. $25,000

All of the following are excluded under Coverage A -Bodily Injury & Property Damage of the CGL, EXCEPT: a. Transportation & racing of mobile equipment b. Host liquor liability c. Expected or intentional acts d. Personal & advertising injury

Which of the following is true regarding Coverage C – Medical Payments under the CGL? a. The insured must be legally liable before medical payments will be made b. Medical payments must be incurred within 3 years from the date of the accident c. Your tenants injured on their rental premises are eligible for medical payments d. Medical payments are considered part of the occurrence limit

All of the following are covered under Coverage B - Personal & Advertising Injury of the CGL, EXCEPT: a. Wrong description of prices b. Wrongful eviction of a tenant c. False arrest or detention of a customer suspected of shoplifting d. The use of another’s advertising ideas in the insured’s advertisement

All of the following are true of Property Damage under the CGL, EXCEPT: a. Property damage means physical injury to tangible property b. Property damage includes loss of use of property physically damaged c. Electronic data is considered tangible property d. Property damage includes loss of use of tangible property not physically injured

Which of the following is true regarding the Supplemental Extended Reporting Period (SERP) of a CGL claims made policy? a. It is automatically included in all claims made forms b. The charge for the SERP cannot exceed 200% of the last annual CGL premium c. The SERP extends the reporting period to 10 years d. The SERP must be purchased and be requested by the insured in writing within 30 days of policy termination

Under the CGL, which of the following is NOT subject to an occurrence limit? a. Bodily injury claim b Property damage claim c. Medical payments claim d. Personal injury claim

Which of the following is NOT true regarding the CGL? a. The per occurrence limit is subject to an aggregate limit b. The medical expense limit applies per person & is subject to the occurrence limit c. The medical expense limit applies per person & is NOT subject to the occurrence limit d. Any bodily injury claim is subject to the occurrence limit & an aggregate limit.

Money includes all of the following, EXCEPT: a. Currency b. Money orders held for sale c. Tokens d. Travelers checks

Which of the following gives the broadest coverage under a Crime Policy? a. Burglary b. Theft c. Robbery d. Safe burglary

Which of the following is an optional coverage under the BOP? a. Inflation guard b. Peak season coverage c. Business income d. Money & securities

Which of the following is eligible for a BOP? a. Bowling alley b. Gas station or service station c. Funeral home d. Cardboard box manufacturer

Under the Businessowners Policy Protective Safeguards endorsement, if the system is not in working order, the insured has ____ hours to restore the system before they must notify the company. a. 24 b. 48 c. 72 d. 168

Which of the following would NOT be considered a covered injury under Workers Compensation? a. Employee suffers a broken arm in an auto accident while on the job b. Convenience store worker injured by a person committing a robbery c. An injury caused by an employee's willful use of illegal drugs d Employee breaks an ankle jumping down from a backhoe

Which of the following is NOT an Occupational Disease under Workers Compensation? a. Black lung b. Flu or cold c. Asbestosis d. Carpal tunnel syndrome

All of the following are true of Experience Rating under Workers Compensation, EXCEPT: a. It measures the individual employer's loss experience against the average loss experience for its job classification b. The experience modification factor is calculated each year by the Insurance Department c. An experience modification of less than 1.00 is good and more than 1.00 is unfavorable d. Future premiums are based upon past loss experience

When an employer can't get coverage in the regular market, coverage can be obtained through a. SWIF b. FAIR plan c. Assigned Risk plan d. High Risk plan

What are the basic limits of liability under Employers Liability? a. 100/100/100 b. 100/500/100 c. 100/300/100 d. 300/300/300

All of the following are true regarding underlying limits of an umbrella policy, EXCEPT a. If the underlying insurance is canceled the umbrella policy becomes void b. If the underlying insurance is canceled, the umbrella pays as if the underlying was in force c. In order to issue an umbrella policy, the umbrella carrier will require the insured to carry minimum limits of underlying insurance d. If the underlying limits are reduced to less than the required limits & a loss occurs, the insured is responsible for the gap between the required limits & the actual coverage.

All of the following are characteristics of a Following Form (Excess Policy), EXCEPT: a. It is not designed to provide broader coverage than the underlying policies b. It is meant to provide higher limits of liability for losses covered under the underlying insurance c. A self insured retention applies to all losses d. There is no drop down feature in a following form policy

Which of the following is not an implied warranty in ocean marine insurance? a. No deviation in voyage - the vessel must follow an agreed route b. The cargo must be packaged by the ship's crew c. The vessel must be seaworthy, with a competent captain & crew d. The purpose of the voyage must be legal

Which of the following is NOT a direct loss coverage under Ocean Marine insurance? a. Hull coverage b. Cargo coverage c. Freight coverage d. All of the above are direct loss coverages

All of the following exposures are uninsurable under the Fair Plan, EXCEPT: a. Unrepaired fire damaged property b. Property in violation of building codes c. Property vacant and open to trespass d. Property exposed to environmental hazards out of the control of the insured

Who is the party under a surety bond who is responsible to fulfill the obligation set forth in the contract? a. Guarantor b. Principal c. Surety d. Obligee

Which of the following provides coverage due to an act or error committed in the administration of an employee benefit plan? a. Employment practices policy b. Commercial general liability c. Employee benefits liability d. Directors and officers liability

Under Ocean Marine insurance, all of the following are true of hull coverage, EXCEPT: a. It provides coverage for damage to the ship b. It provides coverage for damage to piers, wharves & docks c. It provides property damage to other ships d. It provides property damage to other ships' cargo