California property and casualty exam Questions with Correct and Verified Answers. Rated A (Every Single Question and Answer as it shows on the test)

California property and casualty exam Questions with Correct and Verified Answers. Rated A (Every Single Question and Answer as it shows on the test) When can a person who sells real property require the use of a specific insurance agent, broker or solicitor? 1. As a condition precent to the sale of such real property. 2. When a buyer's credit score is below the lender's threshold. 3. A buyer is always able to choose their own insurance representative. 4. When it is required by local municipal regulation. - Correct Answer A buyer is always able to choose their own insurance representative." "How may a license may be surrendered by the insuree, or terminated by the employer? 1. Phoning the insurance commissioner. 2. Faxing a copy of the license to the insurance commissioner. 3. Personally delivering the license to the insurance commissioner, or by written notice from the employer. 4. Presenting a petition to surrender the license to the insurance commissioner from either the insuree or the employer. - Correct Answer Correct answer: Personally delivering the license to the insurance commissioner, or by written notice from the employer." "Unless otherwise specified in the insurance contract, all of the following are TRUE regarding return of premium EXCEPT 1. the premium is forfeited if the policy is cancelled. 2. the premium is refunded if a policy is rescinded or rejected. 3. the whole premium is returned if the insurer has not been exposed to loss. 4. any cancellation fees must be disclosed in writing within 5 days of the request to cancel. - Correct Answer the premium is forfeited if the policy is cancelled." "All of the following are to be specified in an insurance policy EXCEPT 1. the financial rating of the insured. 2. a statement of the expected premium. 3. the parties between whom the contract is made. 4. the period during which the insurance is to continue. - Correct Answer the financial rating of the insured." "In the event of receiving notice of a claim or other claim communication, all of the following timelines are accurate EXCEPT 1. every licensee or claims agent shall transmit notice of the claim to the insurer in no more than 5 calendar days. 2. every licensee shall immediately, but in no more than 15 calendar days, furnish them a complete response. 3. every license or claims agent shall immediately transmit notice of claim to insurer. 4. every insurer shall within15 calendar days acknowledge receipt and provide to the claimant the necessary forms. - Correct Answer every licensee or claims agent shall transmit notice of the claim to the insurer in no more than 5 calendar days." "What is the primary function of The California Automotive Assigned Risk Plan (CAARP)? 1. to serve as an insurer to provide automobile coverage for low income people 2. to monitor the rates of automobile insurers to make sure the prices remain competitive 3. to put people who have trouble obtaining insurance in touch with insurers who may be required by law to insure them 4. to provide training for agents, and to determine which agents and automobile insurers are able to place business through the program - Correct Answer to put people who have trouble obtaining insurance in touch with insurers who may be required by law to insure them" "Which of the following may be insured against? 1. Disability. 2. Accidental death. 3. Wagering losses. 4. Catastrophic losses. - Correct Answer Correct answer: Wagering losses." "Which of the following is a VALID reason to deny coverage or charge a higher rate or premium? 1. ancestry. 2. race, color or religion. 3. driving history or motor vehicle record. 4. sexual orientation or gender expression. - Correct Answer driving history or motor vehicle record." "All of the following are authorized activities for the Limited Lines Automobile Insurance Agent EXCEPT if the agent 1. provides all necessary disclosures. 2. charges and collects a broker's fee for service. 3. transacts insurance on behalf of the consumer. 4. sells automobile property and liability policies. - Correct Answer charges and collects a broker's fee for service." "Where shall an express warranty be made? 1. in the policy itself 2. on a specimen copy in the contract 3. on an illustration provided to the policy owner 4. in a brochure of the policy that is described in detail - Correct Answer in the policy itself" "Which of the following is TRUE regarding who qualifies for coverage under the California Fair Access to Insurance Requirements plan? 1. Any person who is unable to obtain basic property insurance through normal channels. 2. Any person who qualifies will receive superior coverage to other forms of property insurance. 3. Any person who does NOT have an insurable interest in a property can participate in the FAIR plan. 4. Any person who qualifies will have the inspection automatically waived if they are a FAIR plan participant. - Correct Answer Correct answer: Any person who is unable to obtain basic property insurance through normal channels." "ALL of the following are examples of open policies EXCEPT 1. market value. 2. agreed value. 3. actual cash value. 4. replacement value. - Correct Answer Correct answer: agreed value. value." "The following are valid insurance classes under California Insurance Law EXCEPT 1. life, fire, marine and title. 2. surety, disability and plate glass. 3. certainty, precious metals, and gems. 4. sprinkler, boiler and machinery, and team and vehicle. - Correct Answer Correct answer: certainty, precious metals, and gems." "Which of the following terms refers to any evidence or documentation in the possession of the insurer that provides any evidence of a claim and that reasonably supports the magnitude or the amount of the claimant loss? 1. proof of loss 2. proof of claim 3. notice of claim 4. evidentiary proof - Correct Answer Correct answer: proof of claim" "What criteria must a person meet in order to be qualified to purchase a Good Driver Discount policy? 1. Being licensed to drive a motor vehicle for the previous 5 years and has not had more than one violation point count as determined by the CIC. 2. Being licensed to drive a motor vehicle for the previous 3 years and has not had more than two violation point count as determined by the CIC. 3. Being licensed to drive a motor vehicle for the previous 3 years and able to meet the standards of an insurer's applicable Good Driver program. 4. Being licensed to drive a motor vehicle for the previous 3 years and has not had more than one violation point count as determined by the CIC. - Correct Answer Being licensed to drive a motor vehicle for the previous 3 years and has not had more than one violation point count as determined by the CIC." "Who is eligible to submit applications under the California Fair Access to Insurance Requirements? 1. Only agents who carry a FAIR endorsement can participate. 2. All insurers authorized to transact basic property insurance in California are able to participate. 3. Only those members who are employed by FAIR and work as agents for FAIR are able to participate. 4. Participation is limited to the insurance brokers or agents who offer the highest bid to the FAIR commission. - Correct Answer Correct answer: All insurers authorized to transact basic property insurance in California are able to participate." "Which are assets that are in excess of an insurer's liability for reported losses, expenses, taxes, and reinsurance of outstanding risks? 1. capital stock 2. capital assets 3. paid-in capital 4. excess investment - Correct Answer Correct answer: paid-in capital" "All of the following are reasons earthquake policy deductibles are MORE FAVORABLE than commonly used property deductibles EXCEPT 1. the personal property deductible is waived once the dwelling deductible is met. 2. only the earthquake policy will cover for damages due to an earthquake once the deductible is met. 3. the earthquake deductible is often 10 to 15 percent higher than for other types of property coverage. 4. no deductible is required for eligibility to be triggered if the earthquake policy claim exceeds the deductible by 100%. - Correct Answer Correct answer: the earthquake deductible is often 10 to 15 percent higher than for other types of property coverage." "All of the following are requirements to offer earthquake insurance with residential property coverage EXCEPT 1. earthquake insurance is required to be offered with any new policy or renewal. 2. earthquake insurance may be provided through an affiliate or nonaffiliate insurer. 3. a separate policy to cover the earthquake is required, an endorsement is insufficient. 4. earthquake peril can either be offered alone, or offered in combination with other perils. - Correct Answer a separate policy to cover the earthquake is required, an endorsement is insufficient." "Which circumstances in a pretext interview determine if the questions are permissible? 1. When an insured is questioned prior to the application to determine the best recommendations for coverage. 2. When an insured is consulted by a person who hides his true identity on purpose when fraud for a claim is suspected. 3. When questions are asked to help underwriting decide on coverage for the insured when health problems are suspected. 4. When questions are posed by a person who refuses to identify himself or his relation to the company prior to a policy being underwritten. - Correct Answer Correct answer: When an insured is consulted by a person who hides his true identity on purpose when fraud for a claim is suspected." "An insurance agent is a person who transacts all of the following types of insurance EXCEPT 1. annuities. 2. homeowners. 3. auto insurance. 4. life insurance. - Correct Answer life insurance." "Who is able to place business through the California Automobile Assessed Risk Program? 1. any agent licensed in property and casualty insurance 2. only insurers with operating headquarters based in California 3. only agent/brokers licensed in fire and casualty who have also been certified through CAARP. 4. any agent who has been licensed in the State of California for a minimum of 5 years and is certified by CAARP. - Correct Answer only agent/brokers licensed in fire and casualty who have also been certified through CAARP." "How does an "admitted" person differ from an "nonadmitted" person, as it pertains to insurance? 1. An "admitted" person has admitted to a crime or fraud, while a "nonadmitted" person has not. 2. An "admitted" person has been granted admission to an insurance association, while a "nonadmitted" person has not been accepted. 3. An "admitted" person has been admitted to an accreditation program, while a "nonadmitted" person has yet to earn the credits. 4. An "admitted" person has the right to transact insurance business within the state, while a "nonadmitted" person is not entitled to this action. - Correct Answer An "admitted" person has the right to transact insurance business within the state, while a "nonadmitted" person is not entitled to this action." "What document must be provided to the insured prior to any residential insurance policy being issued or renewed? 1. A cost analysis of the insurance industry. 2. A statement from the Better Business Bureau. 3. A copy of the California Residential Property disclosure statement. 4. At least three quotes by competitors for the same coverage offered by the insurer. - Correct Answer A copy of the California Residential Property disclosure statement." "Which of the following provisions of free insurance offered as an incentive to purchase or rent property is TRUE? 1. It is permitted with no charge. 2. It requires a separate charge or fee. 3. If offered as a guarantee of the performance of goods, it is prohibited. 4. If issued by credit unions or with newspaper subscriptions, it is limited under Statute 777.2. - Correct Answer Correct answer: It requires a separate charge or fee." "All of the following are permissible reasons for a consumer reporting agency to furnish motor vehicle, past claims, or credit reports EXCEPT 1. information for employment purposes. 2. a response to a court order or a subpoena issued by a Federal Grand Jury. 3. a request of a national news organization for an investigative story. 4. underwriting purposes to determine a consumer's eligibility for insurance. - Correct Answer a request of a national news organization for an investigative story." "Which is TRUE regarding a "valued" policy? 1. A market value policy is an example of a valued policy. 2. A valued policy specifies the coverage amount of the policy. 3. A valued policy is the only type of policy that builds a cash value. 4. A valued policy generally costs more than replacement value because it has a specific amount. - Correct Answer A valued policy specifies the coverage amount of the policy." "According to CIC Section 1711, an organization ceases to exist as an entity eligible to hold a license EXCEPT 1. upon dissolution of a corporation. 2. upon the termination of all contracts. 3. upon dissolution of a copartnership. 4. upon the termination of an association. - Correct Answer upon the termination of all contracts." "How is the license of an agent or broker required to be displayed? 1. The license must be displayed in a minimum of 24 point font. 2. The license must be displayed in the front window of the office building. 3. The license must be displayed prominently where it can be readily inspected. 4. The license must be carried by the agent always regardless of its current status. - Correct Answer The license must be displayed prominently where it can be readily inspected." "How long after the expiration date may a licensee who has met all the requirements to renew a license be allowed to operate under the existing license? 1. one year 2. sixty days 3. two weeks 4. three months - Correct Answer sixty days" "When is it possible for a commercial vehicle to be eligible for coverage under the California Automobile Assigned Risk Program? 1. if the commercial vehicle is part of a large corporate fleet that moves products serving the underprivileged 2. when the commercial vehicle is used strictly for the transportation of those suffering from a terminal illness 3. when the commercial vehicle is licensed to operate in an area officially declared as either a disaster or poverty zone 4. if it is a privately owned lightweight commercial vehicle used for local service or retail deliveries within a specific geographic area - Correct Answer if it is a privately owned lightweight commercial vehicle used for local service or retail deliveries within a specific geographic area" "Who is authorized to adjust or pay claims in excess of an amount determined by the commissioner? 1. The Claims Assistant 2. The Treasurer 3. The Managing General Agent 4. The Executive Financial Committee - Correct Answer The Managing General Agent" "All of the following are cause for cancellation of an automobile policy EXCEPT 1. nonpayment of premium. 2. the suspension of the primary insured's driver's license 3. discovery of a criminal record for a felony. 4. a substantial increase in the hazard insured against. - Correct Answer discovery of a criminal record for a felony." "Which is TRUE regarding expectant or contingent interest? 1. Expectant or contingent interest constitutes insurable interest. 2. Expectant or contingent interest does NOT constitute insurable interest. 3. Expectant interest or contingent interest qualifies for insurable interest with a waiver. 4. Both are considered insurable interest, but for only 50% of the value. - Correct Answer Correct answer: Expectant or contingent interest does NOT constitute insurable interest." "A person who does NOT hold a valid license may do which of the following 1. effect contracts of insurance. 2. examine contracts of insurance. 3. negotiate contracts of insurance. 4. solicit contracts of insurance. - Correct Answer Correct answer: examine contracts of insurance." "Which of the following describes a contract of reinsurance? 1. Protection is purchased to insure against an insurance company's stated insolvency. 2. A first insurer issues insurance to compensate another insurer for losses on contracts issued by that second insurer. 3. A contract provides an additional coverage amount to the insured in the event of a major catastrophic event. 4. A contract is obtained by an insurer to cover unexpected fluctuations in their expressed loss ratio. - Correct Answer A first insurer issues insurance to compensate another insurer for losses on contracts issued by that second insurer." "All of the following are TRUE regarding a warranty EXCEPT 1. a warranty can be express or implied. 2. a particular form of words is necessary to create a warranty. 3. a warranty can refer to the past, present, future, or all of these. 4. a statement in a policy relating to the person or thing insured, or the insured risk, is a warranty. - Correct Answer Correct answer: a particular form of words is necessary to create a warranty." "Which is an INACCURATE statement regarding the non-standard coverage provide by surplus line brokers? 1. They must prove that 3 domestic insurers have declined the risk. 2. They must show that a thorough search has been made to provide coverage with an admitted insurer. 3. They must provide notice to the commissioner within 14 days of providing non-standard coverage for a home state insured. 4. They must not place with a non admitted insurer coverage just to procure a rate lower than that provided by the lowest admitted insurer. - Correct Answer They must provide notice to the commissioner within 14 days of providing non-standard coverage for a home state insured." "A standard fire insurance policy contains the following details EXCEPT 1. the address of the insured. 2. the term coverage of the policy. 3. the name of the insurance company. 4. the amount of coverage and cost of premiums. - Correct Answer Correct answer: the address of the insured." "When may a surplus line broker solicit and place insurance for a home state insured with a nonadmitted insurer? 1. If the same insurance coverage cannot be procured from an admitted insurer. 2. If the nonadmitted insurer is a domestic rather than an alien or foreign company. 3. Only when the nonadmitted insurer signs an agreement to become an admitted insurer. 4. Only when the proposed insured petitions for the right to be offered the coverage by the broker. - Correct Answer Correct answer: If the same insurance coverage cannot be procured from an admitted insurer." "What is the coverage limit offered by the California Earthquake Authority for condominiums? 1. There is no limit. 2. The coverage is equal to the fair market value. 3. The coverage is limited to $25,000 if the value is $135,000 or less, and $50,000 if the value is over $135,000. 4. The total limit for coverage is $500,000; the same as any other type of residential property protected by the California Earthquake Authority. - Correct Answer Correct answer: The coverage is limited to $25,000 if the value is $135,000 or less, and $50,000 if the value is over $135,000." "Which is NOT a duty of the Workers Compensation Bureau? 1. Inspect risks for classification or rating purposes. 2. Determine which claims are approved and which are denied. 3. Provide reliable statistics and rating information used to help establish premiums. 4. Examine policies and other evidences of insurance to check for compliance with the law. - Correct Answer Correct answer: Determine which claims are approved and which are denied." "All of the following are designated as private passenger vehicles EXCEPT 1. a six wheel recreational vehicle. 2. a privately owned limousine used exclusively by the owner. 3. a four wheel vehicle used as a taxi by an individual and not a company. 4. a personally owned four wheel station wagon used to deliver groceries as a volunteer. - Correct Answer Correct answer: a four wheel vehicle used as a taxi by an individual and not a company." "Which of the following is TRUE regarding a concurrent cause involving perils both covered and non covered? 1. Both perils are covered. 2. Both policies pay in equal amounts. 3. Only the peril specified in the policy is covered. 4. A concurrent cause invalidates the coverage; neither peril is covered. - Correct Answer Correct answer: Only the peril specified in the policy is covered." "All of the following are reasons employers liability insurance is needed in addition to workers' compensation insurance EXCEPT 1. exempt employments. 2. to pay medical bills. 3. illegal employments. 4. non compensable injuries. - Correct Answer Correct answer: to pay medical bills." "Except in a case where the property is being held as a carrier or depository, what is the insurable interest is measured by? 1. The size of the premium. 2. Fair market value of the property. 3. The contingent or expectant value to the insured. 4. The extent to which the insured would be damnified by loss or injury to the property. - Correct Answer The extent to which the insured would be damnified by loss or injury to the property." "To which person or organization does a public insurance adjuster promote and represent? 1. the insured 2. the insurance company 3. the insurance commissioner 4. the insurance agent - Correct Answer Correct answer: the insured" "When is a representation false? 1. when the statement is made under duress 2. when new information is provided to the insurer 3. when the facts are modified by the applicant or insured 4. when the facts fail to correspond with its assertions or stipulations - Correct Answer when the facts fail to correspond with its assertions or stipulations" "Materiality to be solely determined by which of the following? 1. The probability that a certain occurrence of events will result in a claim. 2. The importance of the facts to the insurer and insured in making an underwriting decision. 3. The probable and reasonable influence of the facts upon the party to whom the communication is due. 4. The certainty that material provided to the insurer is truthful in all manners regardless of any mitigating circumstances. - Correct Answer Correct answer: The probable and reasonable influence of the facts upon the party to whom the communication is due." "All of the following are duties of a Managing General Agent EXCEPT 1. delivering policies to the insured. 2. accepting or declining risk of applicants. 3. appointing, supervising and terminating agents within the territory. 4. collecting premiums from brokers and agents and remitting them to the insurer. - Correct Answer Correct answer: delivering policies to the insured." "All of the following conditions must be met before a surplus lines broker may place insurance with a nonadmitted insurer EXCEPT 1. if the insurance cannot be procured from admitted companies. 2. that a diligent search must be made of admitted companies. 3. that the rate for the placed insurance must be the lowest option. 4. that a full report must be made with the commissioner within 60 days. - Correct Answer Correct answer: that the rate for the placed insurance must be the lowest option." "Which of the following shall every property broker-agent and casualty broker-agent disclose prior to arranging premium financing for the purchase of a policy? 1. financing options available 2. the broker-agent's financial status 3. prices from three different financing companies 4. the length of time the agent has been licensed to sell - Correct Answer Correct answer: the broker-agent's financial status" "When may a representation be altered or withdrawn? 1. Before the insurance is effected. 2. After the insurance is effected. 3. At the time of contract renewal. 4. After a contract has been interpreted. - Correct Answer Correct answer: Before the insurance is effected." "What is the method used for placing business with the California Automobile Assigned Risk Program? 1. The insurers are drawn randomly from a pool of eligible providers to participate in CAARP. 2. The amount of revenue generated by the insurer is used to determine participate in CAARP. 3. The policies are assigned to the insurer who offers the highest bid to obtain the lucrative CAARP business. 4. The percentage of CAARP policies required is equal to the percentage of regular insurance policies the insurer has issued within the State. - Correct Answer The percentage of CAARP policies required is equal to the percentage of regular insurance policies the insurer has issued within the State." "Which is considered nonpublic personal information as defined by the California Financial Code? 1. property taxes 2. tax return 3. residence address 4. telephone number - Correct Answer Correct answer: tax return" "In order for an insurer to contract with the State Compensation Insurance Fund it must meet all of the following criteria EXCEPT 1. the insurer has a minimum surplus of one hundred million dollars ($100,000,000). 2. the insurer has an A minus (A-) rating or better from AM Best. 3. the insurer has substantial prior experience in transacting worker's compensation business on another insurer's behalf. 4. the insurer has met all ratio requirements for risk based capital (RBC). - Correct Answer the insurer has met all ratio requirements for risk based capital (RBC)." "Which of the following is TRUE regarding continuing education requirements of an agent or broker? 1. Any licensee shall satisfactorily complete 24 hours of instruction prior to license renewal. 2. Any licensee in good standing for 10 years may apply for exemption to the continuing education requirement if reputation has been proven. 3. An agent or broker licensed in life and health requires more continuing education hours than an agent or broker licensed in property and casualty. 4. A licensee who is 65 years or older shall be exempt from continuing education hours if reputation of agent or broker is in good standing for 25 years. - Correct Answer Correct answer: Any licensee shall satisfactorily complete 24 hours of instruction prior to license renewal." "What does concealment, whether intentional or unintentional, entitle the injured party to? 1. Once the policy has been accepted, it may only be cancelled by the insured under very specific circumstances. 2. The insurer may rescind the contract on the basis of misrepresentation, concealment, or fraud by the insured. 3. Legal damages, not in excess of double the premiums paid. 4. A waiver of responsibility to meet contractual obligations. - Correct Answer Correct answer: The insurer may rescind the contract on the basis of misrepresentation, concealment, or fraud by the insured." "All of the following are PRINCIPAL rating factors in determining automobile insurance premiums EXCEPT 1. the insured's driving safety record. 2. the number of miles driven annually. 3. the zip code where the vehicle is housed. 4. the years of driving experience the insured has. - Correct Answer Correct answer: the zip code where the vehicle is housed." "What is the main duty of an insurance adjuster? 1. To adjust the premiums to make sure coverage is priced equitably. 2. To monitor the current financial performance of the insurance company. 3. To review the costs of insurance to see when prices need to be increased in the industry. 4. To assist the insurer by investigating when criminal activity is suspected in connection with a policy. - Correct Answer To assist the insurer by investigating when criminal activity is suspected in connection with a policy." "ALL of the following are TRUE regarding the process to change the California Code of Regulations EXCEPT 1. the Office of Administrative Law (OAL) may substitute its own judgment for that of the rulemaking agency. 2. the Administrative Procedure Act requires a minimum of 45 days for comments regarding the proposed changes. 3. the Agency may decide to change its initial proposal in response to public comments or on its own initiative after the initial public comment period. 4. the Emergency Rulemaking Process and the Regular Rulemaking Process are separate requiring different standards and procedures for proposed changes. - Correct Answer Correct answer: the Office of Administrative Law (OAL) may substitute its own judgment for that of the rulemaking agency." "What possible consequences are faced from the insurance commissioner by an agent or broker who does not within 60 days comply with an order to establish and complete records? 1. a fine increasing up to $5,000 2. a suspension or revocation of license 3. a mandatory jail sentence of 30 days 4. a reduction of future commissions awarded - Correct Answer Correct answer: a suspension or revocation of license" "What must an individual do in order to act as an agent for a business entity or insurer offering limited lines automobile coverage? 1. petition for membership to an insurance commissioner 2. file a notice of appointment with the commissioner 3. begin producing business as an agent offering the coverage 4. complete a minimum of 48 hours of insurance industry education - Correct Answer Correct answer: file a notice of appointment with the commissioner" "Which of the following may an insurer do in an automobile claim? 1. They may require that an automobile be repaired at a specific repair shop. 2. They can require a claimant to travel an unreasonable distance to obtain a repair estimate for an automobile. 3. They may require that a claimant obtain estimates for the automobile from a minimum of two different repair shops. 4. They can recommend that an automobile be repaired at a specific repair shop unless other requirements have been met. - Correct Answer They can recommend that an automobile be repaired at a specific repair shop unless other requirements have been met." "At which point is a person licensed as a broker-agent deemed to be acting as an insurance agent? 1. when they pass their licensing test 2. when they write their first insurance application 3. when a notice of appointment is filed with the insurance commissioner 4. when they have completed 12 hours of training, and have been licensed at least one year - Correct Answer Correct answer: when a notice of appointment is filed with the insurance commissioner" "All of the following are requirements for determining an area that qualifies for Low Cost Automobile Insurance EXCEPT 1. the number of automobile accidents that occur within the county. 2. the number or percentage of low income people within the county. 3. the number or percentage of uninsured motorists within the county. 4. the availability of affordable insurance through private insurers within the county. - Correct Answer Correct answer: the number of automobile accidents that occur within the county." "When shall a life agent, a property broker-agent or a casualty broker-agent provide to all insureds or applicants the effective date of coverage? 1. at the time of application or receipt of premium moneys 2. at the time that the insurance company approves the application 3. at the time the insurance company verifies receipt of the application 4. at the time that the insurance company issues the policy - Correct Answer Correct answer: at the time of application or receipt of premium moneys" "Which of the following is TRUE regarding nonadmitted insurers? 1. A felony is committed by the agent in the state of a nonadmitted insurer. 2. Acting as an agent for a nonadmitted insurer is considered a misdemeanor. 3. The agent shall pay $1,000 in addition to any fees involving the commission of a felony. 4. Specific penalties shall be determined by the Insurance Commissioner on a case by case basis. - Correct Answer Correct answer: Acting as an agent for a nonadmitted insurer is considered a misdemeanor." "All of the following are taken into consideration for California Automobile Assigned Risk Program eligibility for applicants EXCEPT 1. the education of the applicant. 2. the driving record of the applicant. 3. the mental and physical health of the applicant. 4. any criminal history or convictions of the applicant. - Correct Answer Correct answer: the education of the applicant." "According to the Administrative Procedures Act, what is required to make changes to the California Insurance Code? 1. The proposal must first pass through the house and senate before being put to a vote by the Commission. 2. The Insurance Commissioner must originate any changes, and make most changes through executive order. 3. The Governor acknowledges the need for the change before any proposed changes are put to vote by the Commission. 4. The Department of Insurance is required to publish proposed changes at least 45 days prior to the hearing or decision to adopt the change. - Correct Answer Your answer: The Department of Insurance is required to publish proposed changes at least 45 days prior to the hearing or decision to adopt the change." "Who is legally capable to estimate the replacement value of a structure and discuss homeowners policy coverage levels? 1. An agent or broker. 2. An appraiser or architect. 3. An insurer underwriter or actuary. 4. A member of the insurance committee. - Correct Answer Correct answer: An insurer underwriter or actuary." "When can a person act as agent of an insurer? 1. when the insurer has filed a notice of appointment with the commissioner 2. when the insured has agreed to the purchase of an insurance contract 3. when the insurer has provided a proposal to the agent 4. when the commissioner has approved an agent's license - Correct Answer Correct answer: when the insurer has filed a notice of appointment with the commissioner" "All of the following are TRUE regarding basic property insurance EXCEPT 1. the insurance is for a real or tangible loss. 2. the coverage is for a fixed location specified at the time of the application. 3. the comprehensive plan covers both automobiles and risks associated with farming. 4. the coverage protect against perils from fire, and may be expanded to include vandalism, and malicious mischief. - Correct Answer Correct answer: the comprehensive plan covers both automobiles and risks associated with farming." "An "insurance agent" means a person authorized, by and on behalf of an insurer, to transact which of the following class of insurance? 1. Annuities. 2. Disability insurance. 3. Health insurance. 4. Life Policy. - Correct Answer Correct answer: Annuities." "What is the required rate discount under a Good Driver Discount policy? 1. 20% below the rate the insured would have been otherwise charged for the same coverage. 2. 10% below the rate the insured would have been otherwise charged for the same coverage. 3. 20% below the insurer's average premium rate. 4. 10% below the insurer's average premium rate. - Correct Answer Correct answer: 20% below the rate the insured would have been otherwise charged for the same coverage."