Property and Casualty insurance Exam 100% Verified
Questions & Answers
Q: |Latest 2025
Who may share commission from the sale of an insurance policy?
Answer:
Only producers properly licensed for the type of insurance transaction
Q: What is the purpose of cease and desist order?
Answer:
To prevent producer/insurer from further violating laws for transacting insurance
Q: When is controlled business legal?
Answer:
When the commissions from controlled business do not exceed the aggregate commissions on all other businesses
(specific limits may vary state to state)
Q: An agent offers a client free tickets to a sporting event in exchange for the purchase of an insurance policy. What is
the agent guilty of?
Answer:
Rebating
Q: Which type of misrepresentation persuades an insured, to his or her detriment, to cancel or switch policies from one to
another?
Answer:
Twisting
Q: What is controlled business?
Answer:
Insurance on the producers own life, or property, or the lives or property of the producers family or business associates.
Q: Who is considered a nonresident agent?
Answer:
An agent who resides in another state and licensed in another state, but who is authorized to transact insurance in this
state.
Q: If a producer makes maliciously critical statements about another insurer, What is this illegal practice? -
Defamation
Who is responsible for the costs associated with examination of insurers?
Answer:
,The insurer who is being examined.
Q: If the commissioner/superintendent finds a licensee engaging in an unfair method of competition or an unfair practice.
What order will be issued?
Answer:
Cease and desist order.
Q: A state issued document empowering an insurance company to become admitted insurer is called what? -
Certificate of authority
What are producers required to do in order to renew their license?
Answer:
Complete continued education hours and pay renewal fee.
Q: Who owns stock companies
Answer:
Stockholders
Q: The requirement that agents must account for and promptly remit all insurance funds collected is known as what type
of insurance responsibility?
Answer:
Fiduciary
Q: What type of insurer is formed under the law of another state?
Answer:
Foreign
Q: Who must be notified of a producers change of address?
Answer:
Department of insurance (commissioner/Director/Superintendent)
Q: What document is required for an insurance company to transact insurance?
Answer:
Certificate of authority
Q: Two individuals who are in the same risk and age class are charged different rates for their insurance policies due to
an insignificant factor. What is this called?
Answer:
Discrimination
Q: What illegal act does a producer commit when the producer represents a policy in more favorable light than the policy
really is?
,Answer:
Misrepresentation
Q: When can the commissioner or director examine insurers?
Answer:
Whenever deemed necessary, but at least once every couple years.
Q: What are the most common penalties for violations of insurance statutes?
Answer:
Cease and desist, a fine, and license suspension or revocation
Q: What type of licensee represents the insurance company?
Answer:
The agent.
Q: When would misrepresentation on an insurance application be considered fraud?
Answer:
When it is intentional and material
Q: If an insurer holds a certificate of authority it is known as what type of insurer?
Answer:
Authorized/admitted
Q: Who is an insurance agent?
Answer:
A person authorized to sell, solicit, and negotiate insurance contracts.
Q: Insurers are classified according to their domicile. What are the 3 types?
Answer:
Domestic, foreign, alien.
Q: To whom may a certificate of authority be issued?
Answer:
To an insurer authorized to transact business in this state.
Q: On its advertisement a company claims that it has funds in it's possession that are in fact not available, for the payment
of losses or claims. What is the company guilty of?
Answer:
Misrepresentation
Q: In general who can be excluded from producer licensing and examination requirements?
, Answer:
Insurance company officers, directors, or any other employees who do not transact insurance and who do not receive
commissions for their services. (Administrative, executive, clerical employees)
Q: If an insurer meets the states financial requirements and is approved to transact business in the state, it is considered
what type of insurer?
Answer:
admitted or authorized
Q: What businesses qualify for coverage under business owners policy?
Answer:
Small to medium sized businesses
Q: What are some of the types of businesses that are excluded from coverage under a business owners policy? -
Auto sales, servicing, large banks, bars/grills, places of amusement and manufacturers.
What type of policy is a business owners policy?
Answer:
Prepackaged, stand-alone policy
Q: A business owners policy is sold as a package. What does that mean?
Answer:
Coverage includes both property and liability
Q: What coverages are provided by a business liability coverage form?
Answer:
Bodily injury, property damage, personal injury, advertising injury, and medical expenses
Q: When can an insured cancel a business owners policy?
Answer:
At any time by mailing a written notice of cancelation
Q: A business owners policy is mostly similar to what other insurance policy form?
Answer:
Homeowners
Q: How is the premium paid, for the business owners policy?
Answer:
As one indivisible premium
Q: The business owners Policy liability coverage will pay for necessary medical expenses of others incurred, with in
what maximum time period?
Questions & Answers
Q: |Latest 2025
Who may share commission from the sale of an insurance policy?
Answer:
Only producers properly licensed for the type of insurance transaction
Q: What is the purpose of cease and desist order?
Answer:
To prevent producer/insurer from further violating laws for transacting insurance
Q: When is controlled business legal?
Answer:
When the commissions from controlled business do not exceed the aggregate commissions on all other businesses
(specific limits may vary state to state)
Q: An agent offers a client free tickets to a sporting event in exchange for the purchase of an insurance policy. What is
the agent guilty of?
Answer:
Rebating
Q: Which type of misrepresentation persuades an insured, to his or her detriment, to cancel or switch policies from one to
another?
Answer:
Twisting
Q: What is controlled business?
Answer:
Insurance on the producers own life, or property, or the lives or property of the producers family or business associates.
Q: Who is considered a nonresident agent?
Answer:
An agent who resides in another state and licensed in another state, but who is authorized to transact insurance in this
state.
Q: If a producer makes maliciously critical statements about another insurer, What is this illegal practice? -
Defamation
Who is responsible for the costs associated with examination of insurers?
Answer:
,The insurer who is being examined.
Q: If the commissioner/superintendent finds a licensee engaging in an unfair method of competition or an unfair practice.
What order will be issued?
Answer:
Cease and desist order.
Q: A state issued document empowering an insurance company to become admitted insurer is called what? -
Certificate of authority
What are producers required to do in order to renew their license?
Answer:
Complete continued education hours and pay renewal fee.
Q: Who owns stock companies
Answer:
Stockholders
Q: The requirement that agents must account for and promptly remit all insurance funds collected is known as what type
of insurance responsibility?
Answer:
Fiduciary
Q: What type of insurer is formed under the law of another state?
Answer:
Foreign
Q: Who must be notified of a producers change of address?
Answer:
Department of insurance (commissioner/Director/Superintendent)
Q: What document is required for an insurance company to transact insurance?
Answer:
Certificate of authority
Q: Two individuals who are in the same risk and age class are charged different rates for their insurance policies due to
an insignificant factor. What is this called?
Answer:
Discrimination
Q: What illegal act does a producer commit when the producer represents a policy in more favorable light than the policy
really is?
,Answer:
Misrepresentation
Q: When can the commissioner or director examine insurers?
Answer:
Whenever deemed necessary, but at least once every couple years.
Q: What are the most common penalties for violations of insurance statutes?
Answer:
Cease and desist, a fine, and license suspension or revocation
Q: What type of licensee represents the insurance company?
Answer:
The agent.
Q: When would misrepresentation on an insurance application be considered fraud?
Answer:
When it is intentional and material
Q: If an insurer holds a certificate of authority it is known as what type of insurer?
Answer:
Authorized/admitted
Q: Who is an insurance agent?
Answer:
A person authorized to sell, solicit, and negotiate insurance contracts.
Q: Insurers are classified according to their domicile. What are the 3 types?
Answer:
Domestic, foreign, alien.
Q: To whom may a certificate of authority be issued?
Answer:
To an insurer authorized to transact business in this state.
Q: On its advertisement a company claims that it has funds in it's possession that are in fact not available, for the payment
of losses or claims. What is the company guilty of?
Answer:
Misrepresentation
Q: In general who can be excluded from producer licensing and examination requirements?
, Answer:
Insurance company officers, directors, or any other employees who do not transact insurance and who do not receive
commissions for their services. (Administrative, executive, clerical employees)
Q: If an insurer meets the states financial requirements and is approved to transact business in the state, it is considered
what type of insurer?
Answer:
admitted or authorized
Q: What businesses qualify for coverage under business owners policy?
Answer:
Small to medium sized businesses
Q: What are some of the types of businesses that are excluded from coverage under a business owners policy? -
Auto sales, servicing, large banks, bars/grills, places of amusement and manufacturers.
What type of policy is a business owners policy?
Answer:
Prepackaged, stand-alone policy
Q: A business owners policy is sold as a package. What does that mean?
Answer:
Coverage includes both property and liability
Q: What coverages are provided by a business liability coverage form?
Answer:
Bodily injury, property damage, personal injury, advertising injury, and medical expenses
Q: When can an insured cancel a business owners policy?
Answer:
At any time by mailing a written notice of cancelation
Q: A business owners policy is mostly similar to what other insurance policy form?
Answer:
Homeowners
Q: How is the premium paid, for the business owners policy?
Answer:
As one indivisible premium
Q: The business owners Policy liability coverage will pay for necessary medical expenses of others incurred, with in
what maximum time period?
