, Question 1
Under Oklahoma law, which of the following best describes the adjuster's duty
when a claim involves a potential fraudulent misrepresentation by the insured?
A. The adjuster must immediately deny the claim and report the insured
to the Oklahoma Insurance Department.
B. The adjuster must conduct a reasonable investigation to determine if
fraud exists before making a coverage decision.
C. The adjuster may rely solely on the insurer's fraud suspicion to deny
the claim without further inquiry.
D. The adjuster must settle the claim to avoid bad faith litigation, then
pursue subrogation against the insured.
Correct Answer: B - The adjuster must conduct a reasonable
investigation to determine if fraud exists before making a
coverage decision.
RATIONALE
Oklahoma law requires adjusters to conduct a reasonable investigation
of claims, including suspected fraud, before denying coverage.
Immediate denial without investigation may constitute bad faith.
Options A and C are incorrect because they skip required
investigation; D is wrong because settling a fraudulent claim is not
required and could violate ethical duties.
Question 2
In a commercial property policy, the coinsurance clause requires the insured to
carry insurance equal to at least 80% of the property's value. If the insured
carries $400,000 on a property valued at $600,000 and suffers a $100,000 loss,
what is the maximum recovery, assuming no deductible?
A. $100,000
B. $83,333
C. $80,000
Page 2
, D. $66,667
Correct Answer: B - $83,333
RATIONALE
The coinsurance penalty formula is (amount carried / amount
required) × loss. Required = 80% of $600,000 = $480,000. Carried =
$400,000. Penalty ratio = 400,000/480,000 = 0.8333. Recovery =
0.8333 × $100,000 = $83,333. Options A, C, and D are incorrect
calculations.
Question 3
Which of the following scenarios would most likely trigger coverage under a
standard Oklahoma personal auto policy's uninsured motorist (UM) provision?
A. The insured is struck by a hit-and-run driver who is later identified and
has insurance.
B. The insured is injured by a driver who has liability limits below the
insured's UM limits.
C. The insured is injured while riding a bicycle and is struck by an
uninsured driver.
D. The insured's vehicle is damaged by an uninsured driver while parked,
but the insured has no collision coverage.
Correct Answer: C - The insured is injured while riding a bicycle
and is struck by an uninsured driver.
RATIONALE
UM coverage typically applies when an insured is injured by an
uninsured motorist while occupying a covered auto or as a
pedestrian/cyclist. Option C qualifies as the insured is a cyclist struck
by an uninsured driver. Option A is incorrect because the driver was
identified and insured; B involves underinsured motorist (UIM), not
UM; D involves property damage, which UM does not cover.
Page 3
, Question 4
An adjuster is evaluating a liability claim where the insured's homeowner
policy has a $300,000 limit and the claimant suffered $500,000 in damages.
The insured has no other coverage. What is the adjuster's primary ethical
obligation?
A. Offer the policy limit of $300,000 and advise the insured to seek
personal legal counsel for the excess.
B. Deny the claim because it exceeds policy limits.
C. Attempt to settle within the policy limits to protect the insured from
excess judgment.
D. Pay the full $500,000 to avoid bad faith, then seek reimbursement
from the insured.
Correct Answer: C - Attempt to settle within the policy limits to
protect the insured from excess judgment.
RATIONALE
Adjusters have a duty to settle within policy limits when possible to
protect the insured from excess liability. Offering only the limit
without attempting settlement may expose the insurer to bad faith.
Option A is not proactive; B is wrongful denial; D is not allowed as it
exceeds policy limits.
Question 5
In Oklahoma, which of the following acts would constitute an unfair claim
settlement practice under the Unfair Claims Settlement Practices Act?
A. Failing to pay a claim within 30 days after receiving proof of loss.
B. Requesting additional documentation to verify a claim.
C. Denying a claim based on a policy exclusion after a reasonable
investigation.
D. Offering a settlement that is less than the policy limit but reasonable.
Correct Answer: A - Failing to pay a claim within 30 days after
Page 4
Under Oklahoma law, which of the following best describes the adjuster's duty
when a claim involves a potential fraudulent misrepresentation by the insured?
A. The adjuster must immediately deny the claim and report the insured
to the Oklahoma Insurance Department.
B. The adjuster must conduct a reasonable investigation to determine if
fraud exists before making a coverage decision.
C. The adjuster may rely solely on the insurer's fraud suspicion to deny
the claim without further inquiry.
D. The adjuster must settle the claim to avoid bad faith litigation, then
pursue subrogation against the insured.
Correct Answer: B - The adjuster must conduct a reasonable
investigation to determine if fraud exists before making a
coverage decision.
RATIONALE
Oklahoma law requires adjusters to conduct a reasonable investigation
of claims, including suspected fraud, before denying coverage.
Immediate denial without investigation may constitute bad faith.
Options A and C are incorrect because they skip required
investigation; D is wrong because settling a fraudulent claim is not
required and could violate ethical duties.
Question 2
In a commercial property policy, the coinsurance clause requires the insured to
carry insurance equal to at least 80% of the property's value. If the insured
carries $400,000 on a property valued at $600,000 and suffers a $100,000 loss,
what is the maximum recovery, assuming no deductible?
A. $100,000
B. $83,333
C. $80,000
Page 2
, D. $66,667
Correct Answer: B - $83,333
RATIONALE
The coinsurance penalty formula is (amount carried / amount
required) × loss. Required = 80% of $600,000 = $480,000. Carried =
$400,000. Penalty ratio = 400,000/480,000 = 0.8333. Recovery =
0.8333 × $100,000 = $83,333. Options A, C, and D are incorrect
calculations.
Question 3
Which of the following scenarios would most likely trigger coverage under a
standard Oklahoma personal auto policy's uninsured motorist (UM) provision?
A. The insured is struck by a hit-and-run driver who is later identified and
has insurance.
B. The insured is injured by a driver who has liability limits below the
insured's UM limits.
C. The insured is injured while riding a bicycle and is struck by an
uninsured driver.
D. The insured's vehicle is damaged by an uninsured driver while parked,
but the insured has no collision coverage.
Correct Answer: C - The insured is injured while riding a bicycle
and is struck by an uninsured driver.
RATIONALE
UM coverage typically applies when an insured is injured by an
uninsured motorist while occupying a covered auto or as a
pedestrian/cyclist. Option C qualifies as the insured is a cyclist struck
by an uninsured driver. Option A is incorrect because the driver was
identified and insured; B involves underinsured motorist (UIM), not
UM; D involves property damage, which UM does not cover.
Page 3
, Question 4
An adjuster is evaluating a liability claim where the insured's homeowner
policy has a $300,000 limit and the claimant suffered $500,000 in damages.
The insured has no other coverage. What is the adjuster's primary ethical
obligation?
A. Offer the policy limit of $300,000 and advise the insured to seek
personal legal counsel for the excess.
B. Deny the claim because it exceeds policy limits.
C. Attempt to settle within the policy limits to protect the insured from
excess judgment.
D. Pay the full $500,000 to avoid bad faith, then seek reimbursement
from the insured.
Correct Answer: C - Attempt to settle within the policy limits to
protect the insured from excess judgment.
RATIONALE
Adjusters have a duty to settle within policy limits when possible to
protect the insured from excess liability. Offering only the limit
without attempting settlement may expose the insurer to bad faith.
Option A is not proactive; B is wrongful denial; D is not allowed as it
exceeds policy limits.
Question 5
In Oklahoma, which of the following acts would constitute an unfair claim
settlement practice under the Unfair Claims Settlement Practices Act?
A. Failing to pay a claim within 30 days after receiving proof of loss.
B. Requesting additional documentation to verify a claim.
C. Denying a claim based on a policy exclusion after a reasonable
investigation.
D. Offering a settlement that is less than the policy limit but reasonable.
Correct Answer: A - Failing to pay a claim within 30 days after
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