PA PROPERTY & CASUALTY LICENSE
PRACTICE EXAM QUESTIONS &
ACTUAL PASSED ANSWERS RATED
100% CORRECT
An exclusion that states that an insurer will not pay any claim in which an individuals
property is damaged as a result of an earthquake, mudslide, landslide, or sinkhole. -
Correct Answer ✔✔ an Earth movement exclusion
An exclusion that states that an insurer will not pay any claim in which an individuals
property is damaged as a result of the fact that the individual did not maintain the
property. - Correct Answer ✔✔ Neglect exclusion
Which Home Owner's form covers damage to a condo owner's PROPERTY that occurs
as the result of any event that is not specifically excluded in the policy. - Correct Answer
✔✔ HO-6 Unit Owner's Form
Which Home Owner's form covers damage to a TENANT'S property that occurs as a
result of an aircraft, civil commotion, explosion, fire, nail, lightning, smoke, theft,
vandalism, vehicles and/or wind. - Correct Answer ✔✔ HO-4 Content's Broad Form
Which HO form covers damage to the DWELLING that occurs as the result of any event
that is not specifically excluded in the policy and damage to the property inside the
dwelling that results of an aircraft, civil commotion, explosion, fire, hail, lightning, smoke,
theft, vandalism, vehicles, and/or wind. - Correct Answer ✔✔ HO-3 Special Form
Which HO Form covers damage to the DWELLING & PROPERTY inside the dwelling
that occurs as an result of any event that is not specifically excluded in the policy. -
Correct Answer ✔✔ HO - 5 Comprehensive Form
What means conducting business in accordance with current rules and laws set by
government regulatory agencies and the courts. - Correct Answer ✔✔ Compliance
Standards of conduct and moral judgement. - Correct Answer ✔✔ Ethics
Legal term that describes the relationship between parties. - Correct Answer ✔✔
Agency
What is the term to describe how an insurer appoints an individual to act on its behalf. -
Correct Answer ✔✔ Agency Contract
,An individual whose position and responsibilities involve a high degree of trust and
confidence (trustees, guardians, and executors). - Correct Answer ✔✔ Fiduciary
The name for the fact a producer must sell the kind of policies that best fit the prospects
needs and in amounts that the prospects can afford. - Correct Answer ✔✔ Needs
Selling
What is given when the applicant pays the initial premium at the time the application for
a policy is signed. - Correct Answer ✔✔ Conditional Receipt
What is the term for informing the prospect or client of all facts involving a specific policy
or plan so that an informed decision can be made. - Correct Answer ✔✔ Full Disclosure
What is the name for the watchdog group whose member companies agree to adhere to
and enforce ethical principles. - Correct Answer ✔✔ Insurance Standards Association
(IMSA)
What Act deals with the inappropriate use of advertising. - Correct Answer ✔✔ Unfair
Trade Practices Act
Any written or oral statement that does not accurately describe a policy's features,
benefits, or coverage. - Correct Answer ✔✔ Misrepresentation
Any false, maliciously, critical or derogatory communication that injures another's
reputation, fame, or character. - Correct Answer ✔✔ Defamation
What is the term if the buyer of an insurance policy receives any part of the producers
commission or anything else of significant values as an inducement to purchase a
policy. - Correct Answer ✔✔ Rebating
The unethical act of persuading a policy owner to drop a policy solely for the purpose of
selling another policy without regard to the possible disadvantages to the policy owner. -
Correct Answer ✔✔ Twisting.
A resident producers license must meet what 2 requirements? - Correct Answer ✔✔ 1.)
May either reside in PA -or-
2.) Have their principal place of business in PA
In what 2 situations is it not required to be a licensed as a manager or exclusive general
agent? - Correct Answer ✔✔ 1.) The licensee who has limited underwriting authority -
or-
2.) A manager or agent who has started before Dec. 22, 1965
Which of the following can not be issued a temp license? - Correct Answer ✔✔ A
person selling insurance for the estate of a deceased producer.
, Which is NOT a reason for a licensed to be suspended or revoked?
a.) Making factual by subjective comparisons of 2 policies.
b.) Intentionally violating a cease and desist order.
c.) Making false statements in a license application.
d.) Violating an insurance regulation. - Correct Answer ✔✔ A.
Increases a chance for loss - Correct Answer ✔✔ Hazard (i.e. leaving a door unlocked)
Chance of a loss - Correct Answer ✔✔ Risk
A means of transferring the risk of loss - Correct Answer ✔✔ Insurance
The cause of the loss - Correct Answer ✔✔ Perils (i.e. Fire, Flood, Collision, Theft)
States that there must be an adequate spread of risk for insurance to be effective. -
Correct Answer ✔✔ Law of Large #s
Installing an automatic sprinkler system is an example of - Correct Answer ✔✔
Reduction (can not avoid risk but can reduce it)
Deciding not to produce a produce due to serious potential side effects. - Correct
Answer ✔✔ Avoidance (avoid the risk of being sued)
Person in good health cancels health insurance policy...What is risk management -
Correct Answer ✔✔ Retention (retaining the risk)
Under what regulation in PA does it state that insurers must maintain a specific
minimum levels of capital stock and surplus? - Correct Answer ✔✔ Regulation of
Insurer Solvency.
Who regulates insurance rates to avoid excessive, inadequate, or unfairly discriminatory
rates? - Correct Answer ✔✔ Casualty & Surety Rate Regulatory Act
Who must an insurer notify when they terminate a producer's appointment? - Correct
Answer ✔✔ The Commissioner and producer.
Which of the following is not a power and duty of the insurance commissioner? - Correct
Answer ✔✔ Issuing a cease and desist order, prosecuting producers who violate state
insurance laws, conducting complaint hearings, appointing examiners.
What unfair practices is when a producer offers, promises, allows, gives, sets off, or
pays a rebate on the contract of insurance. - Correct Answer ✔✔ Rebating
What unfair insurance practice is the purchase of insurance from a financial institution
or from a designated insurer or producer as a condition of any loan or deposited
transaction. - Correct Answer ✔✔ Tie-In Sales
PRACTICE EXAM QUESTIONS &
ACTUAL PASSED ANSWERS RATED
100% CORRECT
An exclusion that states that an insurer will not pay any claim in which an individuals
property is damaged as a result of an earthquake, mudslide, landslide, or sinkhole. -
Correct Answer ✔✔ an Earth movement exclusion
An exclusion that states that an insurer will not pay any claim in which an individuals
property is damaged as a result of the fact that the individual did not maintain the
property. - Correct Answer ✔✔ Neglect exclusion
Which Home Owner's form covers damage to a condo owner's PROPERTY that occurs
as the result of any event that is not specifically excluded in the policy. - Correct Answer
✔✔ HO-6 Unit Owner's Form
Which Home Owner's form covers damage to a TENANT'S property that occurs as a
result of an aircraft, civil commotion, explosion, fire, nail, lightning, smoke, theft,
vandalism, vehicles and/or wind. - Correct Answer ✔✔ HO-4 Content's Broad Form
Which HO form covers damage to the DWELLING that occurs as the result of any event
that is not specifically excluded in the policy and damage to the property inside the
dwelling that results of an aircraft, civil commotion, explosion, fire, hail, lightning, smoke,
theft, vandalism, vehicles, and/or wind. - Correct Answer ✔✔ HO-3 Special Form
Which HO Form covers damage to the DWELLING & PROPERTY inside the dwelling
that occurs as an result of any event that is not specifically excluded in the policy. -
Correct Answer ✔✔ HO - 5 Comprehensive Form
What means conducting business in accordance with current rules and laws set by
government regulatory agencies and the courts. - Correct Answer ✔✔ Compliance
Standards of conduct and moral judgement. - Correct Answer ✔✔ Ethics
Legal term that describes the relationship between parties. - Correct Answer ✔✔
Agency
What is the term to describe how an insurer appoints an individual to act on its behalf. -
Correct Answer ✔✔ Agency Contract
,An individual whose position and responsibilities involve a high degree of trust and
confidence (trustees, guardians, and executors). - Correct Answer ✔✔ Fiduciary
The name for the fact a producer must sell the kind of policies that best fit the prospects
needs and in amounts that the prospects can afford. - Correct Answer ✔✔ Needs
Selling
What is given when the applicant pays the initial premium at the time the application for
a policy is signed. - Correct Answer ✔✔ Conditional Receipt
What is the term for informing the prospect or client of all facts involving a specific policy
or plan so that an informed decision can be made. - Correct Answer ✔✔ Full Disclosure
What is the name for the watchdog group whose member companies agree to adhere to
and enforce ethical principles. - Correct Answer ✔✔ Insurance Standards Association
(IMSA)
What Act deals with the inappropriate use of advertising. - Correct Answer ✔✔ Unfair
Trade Practices Act
Any written or oral statement that does not accurately describe a policy's features,
benefits, or coverage. - Correct Answer ✔✔ Misrepresentation
Any false, maliciously, critical or derogatory communication that injures another's
reputation, fame, or character. - Correct Answer ✔✔ Defamation
What is the term if the buyer of an insurance policy receives any part of the producers
commission or anything else of significant values as an inducement to purchase a
policy. - Correct Answer ✔✔ Rebating
The unethical act of persuading a policy owner to drop a policy solely for the purpose of
selling another policy without regard to the possible disadvantages to the policy owner. -
Correct Answer ✔✔ Twisting.
A resident producers license must meet what 2 requirements? - Correct Answer ✔✔ 1.)
May either reside in PA -or-
2.) Have their principal place of business in PA
In what 2 situations is it not required to be a licensed as a manager or exclusive general
agent? - Correct Answer ✔✔ 1.) The licensee who has limited underwriting authority -
or-
2.) A manager or agent who has started before Dec. 22, 1965
Which of the following can not be issued a temp license? - Correct Answer ✔✔ A
person selling insurance for the estate of a deceased producer.
, Which is NOT a reason for a licensed to be suspended or revoked?
a.) Making factual by subjective comparisons of 2 policies.
b.) Intentionally violating a cease and desist order.
c.) Making false statements in a license application.
d.) Violating an insurance regulation. - Correct Answer ✔✔ A.
Increases a chance for loss - Correct Answer ✔✔ Hazard (i.e. leaving a door unlocked)
Chance of a loss - Correct Answer ✔✔ Risk
A means of transferring the risk of loss - Correct Answer ✔✔ Insurance
The cause of the loss - Correct Answer ✔✔ Perils (i.e. Fire, Flood, Collision, Theft)
States that there must be an adequate spread of risk for insurance to be effective. -
Correct Answer ✔✔ Law of Large #s
Installing an automatic sprinkler system is an example of - Correct Answer ✔✔
Reduction (can not avoid risk but can reduce it)
Deciding not to produce a produce due to serious potential side effects. - Correct
Answer ✔✔ Avoidance (avoid the risk of being sued)
Person in good health cancels health insurance policy...What is risk management -
Correct Answer ✔✔ Retention (retaining the risk)
Under what regulation in PA does it state that insurers must maintain a specific
minimum levels of capital stock and surplus? - Correct Answer ✔✔ Regulation of
Insurer Solvency.
Who regulates insurance rates to avoid excessive, inadequate, or unfairly discriminatory
rates? - Correct Answer ✔✔ Casualty & Surety Rate Regulatory Act
Who must an insurer notify when they terminate a producer's appointment? - Correct
Answer ✔✔ The Commissioner and producer.
Which of the following is not a power and duty of the insurance commissioner? - Correct
Answer ✔✔ Issuing a cease and desist order, prosecuting producers who violate state
insurance laws, conducting complaint hearings, appointing examiners.
What unfair practices is when a producer offers, promises, allows, gives, sets off, or
pays a rebate on the contract of insurance. - Correct Answer ✔✔ Rebating
What unfair insurance practice is the purchase of insurance from a financial institution
or from a designated insurer or producer as a condition of any loan or deposited
transaction. - Correct Answer ✔✔ Tie-In Sales
