NJ PROPERTY & CASUALTY
INSURANCE EXAM SET QUESTIONS
& VERIFIED CORRECT ANSWERS
PASSED 100%
Why was the commercial Insurance Deregulation Act Created? - Correct Answer ✔✔
To protect the public from the adverse effects of excessive, inadequate, & unfair
discriminatory rates & marketing practices
Which policies issued must follow the provisions of the Commercial Insurance
Deregulation Act? - Correct Answer ✔✔ Commercial policies
When must rate amendments & policy forms be filed with the commissioner? - Correct
Answer ✔✔ 30 days before
What losses are excluded from flood insurance? - Correct Answer ✔✔ -Landslides
-Sewer backup
-Windblown Rain
-Snow
-Sleet
Who administers the NFIP? - Correct Answer ✔✔ Federal Insurance Administration
(FIA)
What does the NFIP stand for? - Correct Answer ✔✔ National Flood Insurance Program
Why was the National Flood insurance Program constructed? - Correct Answer ✔✔ to
fill in gaps of flood coverage by the private sector
What are the 3 NFIP requirements for coverage? - Correct Answer ✔✔ -community land
management & flood control programs must reduce flood losses in the future
-Flood insurance required in specific flood prone areas as a condition for receiving loans
through/ backed by the federal government
-Property owners that fail to purchase flood insurance within 1 year after it is available
will not be eligible for full disaster relief funding. It will be reduced by an amount of
insurance that could have been purchased
What is the NFIP max coverage for a single family? - Correct Answer ✔✔ Building
$250K, Contents $100K
,What is the NFIP max coverage for other residential? - Correct Answer ✔✔ Building
$250K, Contents $100K
What is the NFIP max coverage for small business? - Correct Answer ✔✔ Building
$500K, Contents $500K
What is the NFIP max coverage for Other Non-Residential? - Correct Answer ✔✔
Building $500k, Contents $500K
What is the NFIP subsidized rate for a single family? - Correct Answer ✔✔ Building
$35K, Contents $10K
What is the NFIP subsidized rate for Other Residential? - Correct Answer ✔✔ Building
$100K , Contents $100K
What is the NFIP subsidized rate for small businesses? - Correct Answer ✔✔ Building
$100K, Contents $100K
What is the NFIP subsidized rate for other non-residential? - Correct Answer ✔✔
Building $100K, Contents $100K
What is the wait period before flood insurance can be effective? - Correct Answer ✔✔
30 days, no binders issued
What are the exceptions to the 30 day NFIP wait period? - Correct Answer ✔✔ -1st 30
days after coverage, community enters standard or emergency program, coverage will
begin at 12:01 am the date after application and premium were mailed
-When an existing policy was assigned to a property purchaser
-At 12:01 am on the 5th day after an endorsement request & premium has been mailed
for existing policy
What was the Supreme Court's decision regarding the Paul v. Virginia case? - Correct
Answer ✔✔ insurance was NOT interstate commerce and could not be regulated by the
federal govt.
Who heard the Paul v. Virginia case? - Correct Answer ✔✔ Supreme Court
Who heard the US v Southeastern Underwriting Association case? - Correct Answer
✔✔ Supreme Court
What was the decision in the US v Southeastern Underwriting Association Case? -
Correct Answer ✔✔ Insurance is interstate commerce and should be subject to federal
regulations (currently in effect today)
,What is the McCarran-Ferguson Act? - Correct Answer ✔✔ The federal govt won't
regulate insurance business as long as states perform an adequate job of managing
their own insurance industries.
When was the McCarran-Ferguson Act passed? - Correct Answer ✔✔ March 9, 1945
To whom does the insurance commissioner have to provide a report? - Correct Answer
✔✔ Governor & Legislature
How often must the insurance Commissioner provide a report? - Correct Answer ✔✔
Annually
How long before a disciplinary hearing must the insurance commissioner notify
interested parties? - Correct Answer ✔✔ 10 days before
What is the fine for failing to comply with a court-ordered subpoena? - Correct Answer
✔✔ $5000
If the commissioner decides one has violated the insurance code, what is the fine for
unintentional acts performed? - Correct Answer ✔✔ $1000
If the commissioner decides one has violated the insurance code, what is the max fine?
- Correct Answer ✔✔ 1st offense: $5K, 2nd offense $10K, each additional $15K
If the insurance commissioner decides one has violated the insurance code, what is the
fine for violating a cease & desist? - Correct Answer ✔✔ $5k each violation
If the insurance commissioner decides one has violated the insurance code, what is the
fine for unlawful acts with intentional & material thought? - Correct Answer ✔✔ $5k
What is the fine for not contacting the dept with an address or name change within 30
days? - Correct Answer ✔✔ $250 max if over 60 days
What is the fine for if a license fee check is returned for insufficient funds? - Correct
Answer ✔✔ $500
What is the fine for if you do not contact the department regarding a change in partners,
owners, officers, or directors? - Correct Answer ✔✔ $250
What is the fine for not returning a license to a producer? - Correct Answer ✔✔ $500
What is the fine for not maintaining an office address or employment contracts on file
with the department? - Correct Answer ✔✔ $100 for each contract
What document is required before an insurance company may transact business in a
state? - Correct Answer ✔✔ Certificate of Authority
, What is a domestic insurer? - Correct Answer ✔✔ An insurer that conducts business in
the state in which it was incorporated
A producer who is appointed with more than one insurer is considered to be... - Correct
Answer ✔✔ A Licensed Solicitor
Implied authority is defined as... - Correct Answer ✔✔ Ability to act outside the authority
specifically granted in an agency agreement & extends company's liability
What kind of clause relates to this statement: E&N Company issued a policy in
consideration of the representations on an application & the payment of the 1st
premium? - Correct Answer ✔✔ Consideration
An insured's representations and warranties are incorrectly stated in which of the
following statements?
a. Statements made by an applicant that are guaranteed true are considered to be
warranties
b. Statements that an applicant believes to be true, but does not guarantee to be true,
are considered to be representations
c. An applicant's statements on an application are considered warranties
d. An applicant's statements on an application are considered representations - Correct
Answer ✔✔ c. An applicant's statements on an application are considered warranties
What term relates to an agreement without legal effect? - Correct Answer ✔✔ Void
An authorized but non-admitted insurer can be represented in this state only by which of
the following? - Correct Answer ✔✔ Surplus lines broker
In franchise groups, how many master policies will be issued? - Correct Answer ✔✔
None
Self-insurance is an example of what kind of risk management? - Correct Answer ✔✔
retention
What kind of plan is a Stock life insurance company conducting when it issues
participating and non-participating policies? - Correct Answer ✔✔ Mixed
What is the fine for if you do not contact the department regarding a change in partners,
owners, officers, or directors? - Correct Answer ✔✔ $250
What is this an example of: Doctors pooling their funds to cover their malpractice
exposures? - Correct Answer ✔✔ risk sharing
Which entity makes an enforceable promise in a unilateral contract? - Correct Answer
✔✔ Insurer
INSURANCE EXAM SET QUESTIONS
& VERIFIED CORRECT ANSWERS
PASSED 100%
Why was the commercial Insurance Deregulation Act Created? - Correct Answer ✔✔
To protect the public from the adverse effects of excessive, inadequate, & unfair
discriminatory rates & marketing practices
Which policies issued must follow the provisions of the Commercial Insurance
Deregulation Act? - Correct Answer ✔✔ Commercial policies
When must rate amendments & policy forms be filed with the commissioner? - Correct
Answer ✔✔ 30 days before
What losses are excluded from flood insurance? - Correct Answer ✔✔ -Landslides
-Sewer backup
-Windblown Rain
-Snow
-Sleet
Who administers the NFIP? - Correct Answer ✔✔ Federal Insurance Administration
(FIA)
What does the NFIP stand for? - Correct Answer ✔✔ National Flood Insurance Program
Why was the National Flood insurance Program constructed? - Correct Answer ✔✔ to
fill in gaps of flood coverage by the private sector
What are the 3 NFIP requirements for coverage? - Correct Answer ✔✔ -community land
management & flood control programs must reduce flood losses in the future
-Flood insurance required in specific flood prone areas as a condition for receiving loans
through/ backed by the federal government
-Property owners that fail to purchase flood insurance within 1 year after it is available
will not be eligible for full disaster relief funding. It will be reduced by an amount of
insurance that could have been purchased
What is the NFIP max coverage for a single family? - Correct Answer ✔✔ Building
$250K, Contents $100K
,What is the NFIP max coverage for other residential? - Correct Answer ✔✔ Building
$250K, Contents $100K
What is the NFIP max coverage for small business? - Correct Answer ✔✔ Building
$500K, Contents $500K
What is the NFIP max coverage for Other Non-Residential? - Correct Answer ✔✔
Building $500k, Contents $500K
What is the NFIP subsidized rate for a single family? - Correct Answer ✔✔ Building
$35K, Contents $10K
What is the NFIP subsidized rate for Other Residential? - Correct Answer ✔✔ Building
$100K , Contents $100K
What is the NFIP subsidized rate for small businesses? - Correct Answer ✔✔ Building
$100K, Contents $100K
What is the NFIP subsidized rate for other non-residential? - Correct Answer ✔✔
Building $100K, Contents $100K
What is the wait period before flood insurance can be effective? - Correct Answer ✔✔
30 days, no binders issued
What are the exceptions to the 30 day NFIP wait period? - Correct Answer ✔✔ -1st 30
days after coverage, community enters standard or emergency program, coverage will
begin at 12:01 am the date after application and premium were mailed
-When an existing policy was assigned to a property purchaser
-At 12:01 am on the 5th day after an endorsement request & premium has been mailed
for existing policy
What was the Supreme Court's decision regarding the Paul v. Virginia case? - Correct
Answer ✔✔ insurance was NOT interstate commerce and could not be regulated by the
federal govt.
Who heard the Paul v. Virginia case? - Correct Answer ✔✔ Supreme Court
Who heard the US v Southeastern Underwriting Association case? - Correct Answer
✔✔ Supreme Court
What was the decision in the US v Southeastern Underwriting Association Case? -
Correct Answer ✔✔ Insurance is interstate commerce and should be subject to federal
regulations (currently in effect today)
,What is the McCarran-Ferguson Act? - Correct Answer ✔✔ The federal govt won't
regulate insurance business as long as states perform an adequate job of managing
their own insurance industries.
When was the McCarran-Ferguson Act passed? - Correct Answer ✔✔ March 9, 1945
To whom does the insurance commissioner have to provide a report? - Correct Answer
✔✔ Governor & Legislature
How often must the insurance Commissioner provide a report? - Correct Answer ✔✔
Annually
How long before a disciplinary hearing must the insurance commissioner notify
interested parties? - Correct Answer ✔✔ 10 days before
What is the fine for failing to comply with a court-ordered subpoena? - Correct Answer
✔✔ $5000
If the commissioner decides one has violated the insurance code, what is the fine for
unintentional acts performed? - Correct Answer ✔✔ $1000
If the commissioner decides one has violated the insurance code, what is the max fine?
- Correct Answer ✔✔ 1st offense: $5K, 2nd offense $10K, each additional $15K
If the insurance commissioner decides one has violated the insurance code, what is the
fine for violating a cease & desist? - Correct Answer ✔✔ $5k each violation
If the insurance commissioner decides one has violated the insurance code, what is the
fine for unlawful acts with intentional & material thought? - Correct Answer ✔✔ $5k
What is the fine for not contacting the dept with an address or name change within 30
days? - Correct Answer ✔✔ $250 max if over 60 days
What is the fine for if a license fee check is returned for insufficient funds? - Correct
Answer ✔✔ $500
What is the fine for if you do not contact the department regarding a change in partners,
owners, officers, or directors? - Correct Answer ✔✔ $250
What is the fine for not returning a license to a producer? - Correct Answer ✔✔ $500
What is the fine for not maintaining an office address or employment contracts on file
with the department? - Correct Answer ✔✔ $100 for each contract
What document is required before an insurance company may transact business in a
state? - Correct Answer ✔✔ Certificate of Authority
, What is a domestic insurer? - Correct Answer ✔✔ An insurer that conducts business in
the state in which it was incorporated
A producer who is appointed with more than one insurer is considered to be... - Correct
Answer ✔✔ A Licensed Solicitor
Implied authority is defined as... - Correct Answer ✔✔ Ability to act outside the authority
specifically granted in an agency agreement & extends company's liability
What kind of clause relates to this statement: E&N Company issued a policy in
consideration of the representations on an application & the payment of the 1st
premium? - Correct Answer ✔✔ Consideration
An insured's representations and warranties are incorrectly stated in which of the
following statements?
a. Statements made by an applicant that are guaranteed true are considered to be
warranties
b. Statements that an applicant believes to be true, but does not guarantee to be true,
are considered to be representations
c. An applicant's statements on an application are considered warranties
d. An applicant's statements on an application are considered representations - Correct
Answer ✔✔ c. An applicant's statements on an application are considered warranties
What term relates to an agreement without legal effect? - Correct Answer ✔✔ Void
An authorized but non-admitted insurer can be represented in this state only by which of
the following? - Correct Answer ✔✔ Surplus lines broker
In franchise groups, how many master policies will be issued? - Correct Answer ✔✔
None
Self-insurance is an example of what kind of risk management? - Correct Answer ✔✔
retention
What kind of plan is a Stock life insurance company conducting when it issues
participating and non-participating policies? - Correct Answer ✔✔ Mixed
What is the fine for if you do not contact the department regarding a change in partners,
owners, officers, or directors? - Correct Answer ✔✔ $250
What is this an example of: Doctors pooling their funds to cover their malpractice
exposures? - Correct Answer ✔✔ risk sharing
Which entity makes an enforceable promise in a unilateral contract? - Correct Answer
✔✔ Insurer
