PSI Property and Casualty Practice Test – California questions with correct answers

1. How does an "admitted" person differ from a "non-admitted" person, as it pertains to insurance? CORRECT ANSWER o An "admitted" person has the right to transact insurance business within the state, while a "non-admitted" person is not entitled to this action. 2. A claimant can be any of the following EXCEPT? CORRECT ANSWER o a person who is conducting an investigation of a claim on behalf of an insurer. 3. When should an insurer provide for the continuous operation of a unit or division to investigate possible fraudulent claims? CORRECT ANSWER o If admitted to do business in this state, except those otherwise exempted. According to CIC Section 1711, an organization ceases to exist as an entity eligible to hold a license EXCEPT? CORRECT ANSWER o Upon the termination of all contracts 5. All of the following define insolvency EXCEPT? CORRECT ANSWER o revocation of certificate of authority by the commissioner. 6. As used in the insurance code, the word "shall" is mandatory and the word "may" is permissive EXCEPT? CORRECT ANSWER o unless otherwise apparent from the context. 7. Which of the following terms refe