17-70 – NY Independent General Adjuster License
Exam | Comprehensive Study Guide, Practice
Exam, Exam Questions & Answers, Exam Prep Test
Bank, Property & Casualty Claims, Insurance Law,
Policy Coverage, Claims Investigation, Adjusting
Practices, Ethics, New York Insurance Regulations,
Detailed Rationales, Licensing Exam Success
Question 1: Which entity has the primary authority to issue, suspend, or
revoke an independent adjuster's license in the state of New York?
A. The New York State Assembly
B. The New York Department of Financial Services (DFS)
C. The National Association of Insurance Commissioners (NAIC)
D. The New York State Office of the Attorney General
CORRECT ANSWER: B. The New York Department of Financial Services (DFS)
Rationale:The New York State Department of Financial Services (DFS) is the regulatory
body responsible for licensing and overseeing insurance professionals, including
independent adjusters, in New York . The DFS has the authority to issue licenses, as well
as to suspend or revoke them for cause .
Question 2: Under New York Insurance Law, what is the minimum bond
requirement for an independent adjuster license applicant?
A. $500
B. $1,000
C. $5,000
D. $10,000
CORRECT ANSWER: B. $1,000
Rationale:New York law requires applicants for an independent adjuster license to file a
bond in the amount of $1,000 . This bond serves as a financial guarantee to protect the
public from potential misconduct by the adjuster.
Question 3: When must a New York-licensed independent adjuster notify the
Superintendent of Financial Services of a change of address?
A. Within 10 days
B. Within 30 days
C. Within 60 days
D. Prior to the next license renewal
CORRECT ANSWER: B. Within 30 days
Rationale:Under New York regulations (Reg 25, Part 26.6), licensees are required to
report a change of address to the Department of Financial Services within 30 days .
,Question 4: What is the duration of a temporary adjuster permit that can be
issued in New York in the event of a catastrophe?
A. 60 days
B. 90 days
C. 120 days
D. 180 days
CORRECT ANSWER: C. 120 days
Rationale:The Superintendent may issue a temporary adjuster permit, which is valid for
up to 120 days, to allow for the adjustment of claims following a catastrophe .
Question 5: According to the New York exam content outline, which of the
following is an exception to the licensing requirement for an independent
adjuster?
A. A licensed New York attorney
B. An officer of an insurance company
C. An adjuster of maritime losses
D. A salaried employee of an insurer
CORRECT ANSWER: C. An adjuster of maritime losses
Rationale:Section 2108(g) of the New York Insurance Law provides exceptions to the
licensing requirement, which can include an adjuster of maritime losses. The law
specifies that a licensed New York attorney or a CEO of an insurance company is not
automatically exempt from the licensing requirement .
Question 6: An independent adjuster is found guilty of violating New York's
unfair claim settlement practices. What is the maximum monetary penalty per
violation that the Superintendent may impose?
A. $250
B. $500
C. $1,000
D. $5,000
CORRECT ANSWER: C. $1,000
Rationale:Under the New York Insurance Law, the Superintendent can impose a
monetary penalty of up to $1,000 for each violation of the insurance laws and unfair
practices, although the total amount may be capped at a certain aggregate .
Question 7: Which New York regulation establishes the consumer privacy
requirements for insurance companies and adjusters?
A. Regulation 64
B. Regulation 169
C. Regulation 79
D. Regulation 23
,CORRECT ANSWER: B. Regulation 169
Rationale:Regulation 169 (Parts 420.0 to 420.4) establishes the consumer privacy
regulations for insurance companies operating in New York, outlining standards for
safeguarding customer information .
Question 8: For a license issued to a corporation, who can be named as a sub-
licensee to act as an independent adjuster?
A. Any employee of the corporation
B. Only the officers and directors of the corporation
C. The primary shareholder
D. Any independent contractor working for the corporation
CORRECT ANSWER: B. Only the officers and directors of the corporation
Rationale:When a license is issued to a corporation, the license may only name the
officers and directors of that corporation as sub-licensees. Each sub-licensee must be
individually qualified to hold a license .
Question 9: What is the primary purpose of the principle of indemnity in an
insurance contract?
A. To ensure the insured profits from a loss
B. To punish the insurer for denying a claim
C. To restore the insured to the same financial position held before the loss
D. To transfer all risk of loss to the insurance company
CORRECT ANSWER: C. To restore the insured to the same financial position
held before the loss
Rationale:The principle of indemnity is fundamental to insurance. It is designed to
compensate the insured for a loss, preventing them from profiting from it and ensuring
they are restored to their approximate pre-loss financial position .
Question 10: Which of the following correctly describes an insurance contract
as "aleatory"?
A. It is a contract of equal value between two parties.
B. It involves an unequal exchange of values based on chance.
C. It is a contract that cannot be cancelled.
D. It is a contract where only one party makes a promise.
CORRECT ANSWER: B. It involves an unequal exchange of values based on
chance.
Rationale:An insurance contract is considered aleatory because the performance of the
contract depends on an uncertain event (a loss). The insured pays a relatively small
premium, but could receive a much larger benefit if a loss occurs, or they could receive
nothing .
, Question 11: Under New York law, what is the required timeframe for an
insurer to determine liability on a claim?
A. 10 days
B. 15 days
C. 20 days
D. 30 days
CORRECT ANSWER: D. 30 days
Rationale:New York's unfair claim practices regulations require insurers to have 30
calendar days to determine liability on a claim after receiving proof of loss, unless
circumstances require a longer investigation .
Question 12: What is a "contract of adhesion" in the context of insurance?
A. A contract where both parties have equal bargaining power.
B. A contract where the insured can negotiate all the terms.
C. A contract drafted by the insurer, with the insured having little to no ability to
negotiate.
D. A contract that is attached to the main policy.
CORRECT ANSWER: C. A contract drafted by the insurer, with the insured
having little to no ability to negotiate.
Rationale:An insurance policy is a contract of adhesion because it is prepared by the
insurer (the stronger party) and presented to the insured on a "take-it-or-leave-it" basis.
Any ambiguity in such a contract is typically interpreted in favor of the insured .
Question 13: A policyholder fails to disclose a material fact on their
application. Under the principle of utmost good faith, this is known as:
A. A representation
B. A warranty
C. A concealment
D. A waiver
CORRECT ANSWER: C. A concealment
Rationale:Utmost good faith (uberrima fides) requires both parties to disclose all
material facts. A failure to disclose a material fact, especially if done intentionally, is
considered concealment. This can give the insurer grounds to void the contract .
Question 14: An insurance company, after paying a claim, seeks to recover the
loss amount from a third party who was responsible. This legal right is known
as:
A. Indemnity
B. Subrogation
C. Salvage
D. Appraisal
Exam | Comprehensive Study Guide, Practice
Exam, Exam Questions & Answers, Exam Prep Test
Bank, Property & Casualty Claims, Insurance Law,
Policy Coverage, Claims Investigation, Adjusting
Practices, Ethics, New York Insurance Regulations,
Detailed Rationales, Licensing Exam Success
Question 1: Which entity has the primary authority to issue, suspend, or
revoke an independent adjuster's license in the state of New York?
A. The New York State Assembly
B. The New York Department of Financial Services (DFS)
C. The National Association of Insurance Commissioners (NAIC)
D. The New York State Office of the Attorney General
CORRECT ANSWER: B. The New York Department of Financial Services (DFS)
Rationale:The New York State Department of Financial Services (DFS) is the regulatory
body responsible for licensing and overseeing insurance professionals, including
independent adjusters, in New York . The DFS has the authority to issue licenses, as well
as to suspend or revoke them for cause .
Question 2: Under New York Insurance Law, what is the minimum bond
requirement for an independent adjuster license applicant?
A. $500
B. $1,000
C. $5,000
D. $10,000
CORRECT ANSWER: B. $1,000
Rationale:New York law requires applicants for an independent adjuster license to file a
bond in the amount of $1,000 . This bond serves as a financial guarantee to protect the
public from potential misconduct by the adjuster.
Question 3: When must a New York-licensed independent adjuster notify the
Superintendent of Financial Services of a change of address?
A. Within 10 days
B. Within 30 days
C. Within 60 days
D. Prior to the next license renewal
CORRECT ANSWER: B. Within 30 days
Rationale:Under New York regulations (Reg 25, Part 26.6), licensees are required to
report a change of address to the Department of Financial Services within 30 days .
,Question 4: What is the duration of a temporary adjuster permit that can be
issued in New York in the event of a catastrophe?
A. 60 days
B. 90 days
C. 120 days
D. 180 days
CORRECT ANSWER: C. 120 days
Rationale:The Superintendent may issue a temporary adjuster permit, which is valid for
up to 120 days, to allow for the adjustment of claims following a catastrophe .
Question 5: According to the New York exam content outline, which of the
following is an exception to the licensing requirement for an independent
adjuster?
A. A licensed New York attorney
B. An officer of an insurance company
C. An adjuster of maritime losses
D. A salaried employee of an insurer
CORRECT ANSWER: C. An adjuster of maritime losses
Rationale:Section 2108(g) of the New York Insurance Law provides exceptions to the
licensing requirement, which can include an adjuster of maritime losses. The law
specifies that a licensed New York attorney or a CEO of an insurance company is not
automatically exempt from the licensing requirement .
Question 6: An independent adjuster is found guilty of violating New York's
unfair claim settlement practices. What is the maximum monetary penalty per
violation that the Superintendent may impose?
A. $250
B. $500
C. $1,000
D. $5,000
CORRECT ANSWER: C. $1,000
Rationale:Under the New York Insurance Law, the Superintendent can impose a
monetary penalty of up to $1,000 for each violation of the insurance laws and unfair
practices, although the total amount may be capped at a certain aggregate .
Question 7: Which New York regulation establishes the consumer privacy
requirements for insurance companies and adjusters?
A. Regulation 64
B. Regulation 169
C. Regulation 79
D. Regulation 23
,CORRECT ANSWER: B. Regulation 169
Rationale:Regulation 169 (Parts 420.0 to 420.4) establishes the consumer privacy
regulations for insurance companies operating in New York, outlining standards for
safeguarding customer information .
Question 8: For a license issued to a corporation, who can be named as a sub-
licensee to act as an independent adjuster?
A. Any employee of the corporation
B. Only the officers and directors of the corporation
C. The primary shareholder
D. Any independent contractor working for the corporation
CORRECT ANSWER: B. Only the officers and directors of the corporation
Rationale:When a license is issued to a corporation, the license may only name the
officers and directors of that corporation as sub-licensees. Each sub-licensee must be
individually qualified to hold a license .
Question 9: What is the primary purpose of the principle of indemnity in an
insurance contract?
A. To ensure the insured profits from a loss
B. To punish the insurer for denying a claim
C. To restore the insured to the same financial position held before the loss
D. To transfer all risk of loss to the insurance company
CORRECT ANSWER: C. To restore the insured to the same financial position
held before the loss
Rationale:The principle of indemnity is fundamental to insurance. It is designed to
compensate the insured for a loss, preventing them from profiting from it and ensuring
they are restored to their approximate pre-loss financial position .
Question 10: Which of the following correctly describes an insurance contract
as "aleatory"?
A. It is a contract of equal value between two parties.
B. It involves an unequal exchange of values based on chance.
C. It is a contract that cannot be cancelled.
D. It is a contract where only one party makes a promise.
CORRECT ANSWER: B. It involves an unequal exchange of values based on
chance.
Rationale:An insurance contract is considered aleatory because the performance of the
contract depends on an uncertain event (a loss). The insured pays a relatively small
premium, but could receive a much larger benefit if a loss occurs, or they could receive
nothing .
, Question 11: Under New York law, what is the required timeframe for an
insurer to determine liability on a claim?
A. 10 days
B. 15 days
C. 20 days
D. 30 days
CORRECT ANSWER: D. 30 days
Rationale:New York's unfair claim practices regulations require insurers to have 30
calendar days to determine liability on a claim after receiving proof of loss, unless
circumstances require a longer investigation .
Question 12: What is a "contract of adhesion" in the context of insurance?
A. A contract where both parties have equal bargaining power.
B. A contract where the insured can negotiate all the terms.
C. A contract drafted by the insurer, with the insured having little to no ability to
negotiate.
D. A contract that is attached to the main policy.
CORRECT ANSWER: C. A contract drafted by the insurer, with the insured
having little to no ability to negotiate.
Rationale:An insurance policy is a contract of adhesion because it is prepared by the
insurer (the stronger party) and presented to the insured on a "take-it-or-leave-it" basis.
Any ambiguity in such a contract is typically interpreted in favor of the insured .
Question 13: A policyholder fails to disclose a material fact on their
application. Under the principle of utmost good faith, this is known as:
A. A representation
B. A warranty
C. A concealment
D. A waiver
CORRECT ANSWER: C. A concealment
Rationale:Utmost good faith (uberrima fides) requires both parties to disclose all
material facts. A failure to disclose a material fact, especially if done intentionally, is
considered concealment. This can give the insurer grounds to void the contract .
Question 14: An insurance company, after paying a claim, seeks to recover the
loss amount from a third party who was responsible. This legal right is known
as:
A. Indemnity
B. Subrogation
C. Salvage
D. Appraisal
