WASHINGTON STATE PROPERTY AND CASUALTY INSURANCE EXAM QUESTIONS AND CORRECT ANSWERS GRADED A

WASHINGTON STATE PROPERTY AND CA SUALTY INSU RANCE EXAM QU ESTIONS AND CORRECT ANSWERS 2023 -2024 GRADED A Insurance Producer - ANSWER -A person required to be licensed under the laws of this state to sell, solicit, or negotiate insurance. - Must be 18+ - has not had a license denied, suspended, or revoked - completed Pre -licensing/ exams - paid fee(s) - Fingerprinted/ background check FINRA (Financial Industry Regulatory Authority) - ANSWER -solicits licences for variable life and variable annuity Temporary Insurance Producers Licence - ANSWER -Commissioner may issue temp. license for a max of 180 days. usually in event of producers reco very, sale of a business, training and licencing of new personal to operate a business. Non-Resident Producer - ANSWER -a producer who lives (domicile) and conducts business from another state other than Washington. Will receive a non resident producers li cense. When is a insurance license exempt? - ANSWER -When they work at a company or themself but do not conduct the solicitation, sale, negotiation of insurance. Appointing a insurance producer - ANSWER -- notice of appointment within 15 days - Commissione r will verify within 15 days - if deemed ineligible commissioner will notify within 10 days If approved it must e renewed every 2 years, and will receive notice within 60 days of the renewal date. Business Entity Affiliates - ANSWER -A business must have AT LEAST 1 affiliated individual licence to transact insurance If business Entity Affiliate is terminated - ANSWER -The commissioner must receive notice within 30 days of termination. Renewal - ANSWER -The initial licenses are valid from the date that they are issued until the last day of the licensee's birth month. Authorized Insurer - ANSWER -An insurer that has qualified and received a Certificate of Authority from the Department of Insurance to transact insurance in the state. Contact adhesion - ANSWER -the accepter of the contract must "adhere" to the written cont ract inducement - ANSWER -An action aimed at persuading insolvent - ANSWER -Bankrupt; unable to pay debts. Transacting Insurance - ANSWER -Conducting insurance business, such as soliciting or negotiating to buy or sell an insurance policy. Unauthorized Insurer - ANSWER -Is held personally liable. Each violation is separate and can result in suspension, revocatio n of license, and a min fine of $25,000. (Class B Felony) When would a commissioner order a replacement policy? - ANSWER -When a unauthorized insurer improperly placed a policy. Would be replaced by a policy with a legal insurer. Surplus Lines - ANSWER -Insurance that is not available or offered in the regular marketplace from admitted insurers. Insurance Commissioner (IOC) - ANSWER -State elected term of 4 years. insurance Commissioner duties - ANSWER --Protects the Public from unfair trade practices - Examinations/investigations - Hearings - Cease and Desist orders - Public information - Appoints Dep. Chief Commissioner - How often must the Insurance Commissioner examine companies? - ANSWER -As often as deemed necessary, but MUST be done every 5 years Receiving Written Notice from Commissioner - ANSWER -the person must respond within 90 days. if not made the request is considered waved. Notice of Hearing - ANSWER -- must state grounds of hearing (can be written demand by aggrieved person) - Right to reque st administrative law judge Licence Suspension Hearing - ANSWER -Commissioner must hold a hearing within 90 days. Renewal Fees for Licences - ANSWER -(Every 2 years) Producer - $55 Limited insurance - $20 Surplus lines broker - $20 Ajuster - $50 Late Fees: 30 days: 50% of renewal 31-60 days: 100% 61-12 months 200% (12+ months must restart licensing process) Continuing Education (CE) - ANSWER -Every 2 years. 24 hours total, 3 hours in ethics. must hold on to certificate for 3 years Change of Address - ANSWER -Must contact commission er within 30 days. this includes a change of residence, mailing, business, or email Reporting of Actions - ANSWER -You must report to the commissioner within 30 days of any administrative action taken on them by another jurisdiction or governmental agency Convicted of a felony - ANSWER -Commissioner may revoke or refuse insurers licenses immediately. Within 15 days may revoke a ordered licence or by ordering a hearing within 10 days. Suspended license period - ANSWER -up to 12 months Guilty of violations - ANSWER -each fine of up to $1,000, must be paid within 15 -30 days Place of Business Requirements - ANSWER -Must be accessible to the public. Does not apply to life and disability insurance. Record Retention - ANSWER -Requires insurer to maintain records fo r 5 years. (DRPL) Designated Responsible Licensed Person - ANSWER -Responsible for insurers compliance with insurance laws/ rules Misrepresentation - ANSWER -Materials that are false, misleading, or deceptive of policy benefits, terms, payment of dividends . Also includes oral statements. Knowingly committing this is considered a gross misdemeanor, and licences can be revoked False Advertising - ANSWER -Advertising that is misleading, deceptive, and untrue. Ex: newspaper add with untrue statements about terms and benefits of a policy. Rebating - ANSWER -the practice of giving an individual a premium reduction or some other fina ncial advantage not stated in the policy as an inducement to purchase the policy. It May not exceed $100 per person in a 12 month period. Inducement - ANSWER -illegal action. referring to rebating to have someone purchase a policy for a reward. Twisting - ANSWER -Misrepresentation for the purpose of inducing a person to purchase, lapse, forfeit, surrender or change an insurance policy. Twisting is an unfair trade practice. Deformation - ANSWER -An oral or written statement of insurance policies that persua des a person to engage in insurance. including financial conditions of people or another company. Excess Charge - ANSWER -allowing insurers to charge a reduction fee, overall charges must be reasonable to the value of work. Claimant - ANSWER -either the fi rst party, third party or both. can include immediate family members designated by client First Party Claimant - ANSWER -The insured is the first party claimant. Ex: Making a claim to your own insurance company Third Party Claimant - ANSWER -the opposite party of the first party claimant. Ex: James has a policy with Goosehead (first -party) and gets into an accident, hitting Coles car (third party), cole then makes a claim on James's Goosehead policy. Unfair Practices - ANSWER -Illegal business practices that exploit the unequal bargaining position of consumers Unreasonable Denial of Claim - ANSWER -May be taken to supreme court, if determined the claim denial was unfair insurer could pay 3x the amount of claim first party must submit claim within 20 days prior to filing for action Insurance Code: Remedies & Pen alties - ANSWER -- Cease and desist order form commissioner - if not followed within 10 days of order a max fine of $250 will be issued for each violation Can you keep or retain a policy for safekeeping? - ANSWER -No, not under any circumstance Fiduciary C apacity - ANSWER -When the business a person transacts or the money or property which he handles is not for his own benefit but for another person -Agent/producer represents the insurance company - Any diversion of funds is considered larceny by embezzlem ent and will be prosecuted accordingly