WA Surplus Lines Broker Exam 2025, Washington
insurance exam, surplus lines licensing, broker
compliance WA, underwriting and placement, WA
broker test, verified answers
/. When are you required to file premium tax return for the previous calendar year by? -
Answer-March 1st
/.What does statutory accounting mean? - Answer-Rules state that certain assets are
non-admitted (don't count) as you can't pay claims with them.
/.Bonds rated ___________ and higher are considered investment grade. - Answer-1 &
2
/.What does IBNR stand for? - Answer-Incurred but not reported
/.True or false, individuals whose Surplus Line Brokers license was active and did not
have an active affiliation with a business entity are required to file a premium tax return,
even if no business was transacted? - Answer-TRUE
/.Which office assigns the bonds rating? - Answer-SVO (Securities Valuation Office)
/.What is Combined Ratio? - Answer-Loss Incurred + Loss Expense / Earned Premium
/.What are General Interrogatories? - Answer-General questions about the Company.
/.Financials: what is Schedule P include? - Answer-Incurred & open losses
/.What does NAIC stand for? - Answer-National Association of Insurance
Commissioners
/.What countries are included on AM Best report? - Answer-US and Canada
/.Where can you find a list of alien companies and Lloyd syndicates with city/country of
domicile? - Answer-International Insurers Department Plan of Operation.
/.What does IRIS stand for? - Answer-Insurance Regulatory Information System (
Exceptional value is BAD or unusual)
/.When was the WA State regulatory stamp changed?
A. January 30, 1975
B. January 1, 2012
,C. March 31, 2000
D. March 1, 2011 - Answer-B, January 1, 2012
/.Where/when should the registry stamp be placed on documents to be delivered to the
insured? - Answer-Every contract, including binder, on the face of the policy. SLB
required to initial next to statement.
/.WA Surplus Lines Stamp should read: - Answer-"This contract is registered and
delivered as a surplus line coverage under the insurance code of the state of
Washington, Title 48 RCW. It is not protected by any Washington state guaranty
association law."
/.How long must a surplus line broker keep financial records of a foreign unauthorized
insurer? - Answer-5 years
/.RE: 48.18.180 'Stated Premium' which statements are TRUE:
A. Premium shall be inclusive of all fees, charges, premium.
B. Each violation of this statute is a gross misdemeanor
C. If premium on policy differs from binder by less than $10, insurer not required to
notify insured.
D. All of the above - Answer-
/.Max amount of time license can be suspended due to conviction of felony? - Answer-
Not to exceed 12 months
/.When would WA State Insurance Commissioner waive the examination? - Answer-If
nonresident person holds an equivalent surplus lines license in another state.
/.Which of the following statements are true regarding WAC 284-15 'Solvent Insurer'?
A. Brokers responsibility to substantiate financial condition of foreign unauthorized
insurer
B. Evidence of financial condition must be retained for 5 years
C. Any unauthorized insurer listed on quarterly listing of alien insurers (NAIC) is deemed
adequately documented
D. All of the above - Answer-
/.As specified in RCW 48.15.150, each policy issued to an unauthorized insurer as a
surplus line contract must designate _______ as the person upon whom service of
process may be made.
A. CFO
B. SLB
C. Commissioner
D. Attorney - Answer-C - Commissioner
/.Return premiums or claim payments will not be deemed to have been paid to the
insured or claimant until the payments are actually received by the
,A) Insurance Producer
B) Insured/Claimant
C) SLB - Answer-B) Insured/Claimant
/.How many days notice required for cancellation due to non-payment of premium? -
Answer-10 days
/.How many days notice is required to cancel Surplus Line policy (other than non-pay)?
- Answer-20 days
/.The certification form must be filed within ___ days of the effective date:
A) 30
B) 90
C) 60
D) 20 - Answer-C - 60 days
/.Two key tools within IRIS (Insurance Regulatory Information System)
A) Ratios
B) Inspections
C) Analyst Team System
D) Examinations
E) C, D
F) A, C - Answer-IRIS ratios and Analyst Team System
/.Max credit/surcharge for Account Premium Modification Plan - Answer-25%
Available to risks that develop a 3 year premium of at least $5,000
/.Agreed amount eliminates the ______ clause - Answer-Coinsurance
/.What organization decides alien insurers have fulfilled criteria and can be included on
the Quarterly Listing of Alien Insurers'?
A) NAIC
B) IRIS
C) IIDPO
D) Lloyd's - Answer-C- International Insurers Department Plan of Operation
/.What information can you find on the Quarterly Listing of Alien Insurers?
A) location of trust account
B) min required balance or trust account
C) market value of trust account
D) if account is funded by letter of credit
E) all of the above - Answer-E - along with trustee bank contacts with telephone and fax
#
/.What AM Best Rating categories are considered Investment Grade for Long-Term
credit?
, A) aaa
B) aa
C) a
D) bbb
E) all of the above - Answer-E) aaa, aa, a, and bbb are all considered investment grade
/.What AM Best Rating categories are considered Investment Grade for Short-Term
credit?
A) AMB-1+
B) AMB-1
C) AMB-2
D) AMB-3
E) all of the above - Answer-E) all of the above
/.What AM Best Financial Strength Rating are considered secure?
A) A++, A+
B) A, A-
C) B++, B+
D) all of the above - Answer-D) all of the above (superior, excellent, good)
/.Lloyd's of London can write on admitted paper in what states/territories? - Answer-
Virgin Islands, Illinois, and Kentucky
/.Which organization body is responsible for regulating Lloyd's (including direct
supervision of managing agents and monitoring capital solvency)? - Answer-FSA -
Financial Service Authority
/.Which bank handles Lloyd's NY Trust Fund? - Answer-City Bank
/.Gross Premiums Written to Policyholders Surplus should be what ratio?
A) 9 to 1
B) 1 to 9
C) 3 to 1
D) 1 to 3 - Answer-Gross premiums should be 9 to 1
/.Is the term 'unusual value' on a financial ratio report good, bad, or not important? -
Answer-Unusual values are BAD.
/.Where can you find the amount of Direct Premiums Written, Reinsurance Assumed -
Affiliates, & Reinsurance Assumed - Non-Affiliates? - Answer-On the Underwriting &
Investment Exhibit page (8)
/.Where can you find the amount of Policyholders Surplus? - Answer-The Liabilities,
Surplus, and Other Funds page (3)
insurance exam, surplus lines licensing, broker
compliance WA, underwriting and placement, WA
broker test, verified answers
/. When are you required to file premium tax return for the previous calendar year by? -
Answer-March 1st
/.What does statutory accounting mean? - Answer-Rules state that certain assets are
non-admitted (don't count) as you can't pay claims with them.
/.Bonds rated ___________ and higher are considered investment grade. - Answer-1 &
2
/.What does IBNR stand for? - Answer-Incurred but not reported
/.True or false, individuals whose Surplus Line Brokers license was active and did not
have an active affiliation with a business entity are required to file a premium tax return,
even if no business was transacted? - Answer-TRUE
/.Which office assigns the bonds rating? - Answer-SVO (Securities Valuation Office)
/.What is Combined Ratio? - Answer-Loss Incurred + Loss Expense / Earned Premium
/.What are General Interrogatories? - Answer-General questions about the Company.
/.Financials: what is Schedule P include? - Answer-Incurred & open losses
/.What does NAIC stand for? - Answer-National Association of Insurance
Commissioners
/.What countries are included on AM Best report? - Answer-US and Canada
/.Where can you find a list of alien companies and Lloyd syndicates with city/country of
domicile? - Answer-International Insurers Department Plan of Operation.
/.What does IRIS stand for? - Answer-Insurance Regulatory Information System (
Exceptional value is BAD or unusual)
/.When was the WA State regulatory stamp changed?
A. January 30, 1975
B. January 1, 2012
,C. March 31, 2000
D. March 1, 2011 - Answer-B, January 1, 2012
/.Where/when should the registry stamp be placed on documents to be delivered to the
insured? - Answer-Every contract, including binder, on the face of the policy. SLB
required to initial next to statement.
/.WA Surplus Lines Stamp should read: - Answer-"This contract is registered and
delivered as a surplus line coverage under the insurance code of the state of
Washington, Title 48 RCW. It is not protected by any Washington state guaranty
association law."
/.How long must a surplus line broker keep financial records of a foreign unauthorized
insurer? - Answer-5 years
/.RE: 48.18.180 'Stated Premium' which statements are TRUE:
A. Premium shall be inclusive of all fees, charges, premium.
B. Each violation of this statute is a gross misdemeanor
C. If premium on policy differs from binder by less than $10, insurer not required to
notify insured.
D. All of the above - Answer-
/.Max amount of time license can be suspended due to conviction of felony? - Answer-
Not to exceed 12 months
/.When would WA State Insurance Commissioner waive the examination? - Answer-If
nonresident person holds an equivalent surplus lines license in another state.
/.Which of the following statements are true regarding WAC 284-15 'Solvent Insurer'?
A. Brokers responsibility to substantiate financial condition of foreign unauthorized
insurer
B. Evidence of financial condition must be retained for 5 years
C. Any unauthorized insurer listed on quarterly listing of alien insurers (NAIC) is deemed
adequately documented
D. All of the above - Answer-
/.As specified in RCW 48.15.150, each policy issued to an unauthorized insurer as a
surplus line contract must designate _______ as the person upon whom service of
process may be made.
A. CFO
B. SLB
C. Commissioner
D. Attorney - Answer-C - Commissioner
/.Return premiums or claim payments will not be deemed to have been paid to the
insured or claimant until the payments are actually received by the
,A) Insurance Producer
B) Insured/Claimant
C) SLB - Answer-B) Insured/Claimant
/.How many days notice required for cancellation due to non-payment of premium? -
Answer-10 days
/.How many days notice is required to cancel Surplus Line policy (other than non-pay)?
- Answer-20 days
/.The certification form must be filed within ___ days of the effective date:
A) 30
B) 90
C) 60
D) 20 - Answer-C - 60 days
/.Two key tools within IRIS (Insurance Regulatory Information System)
A) Ratios
B) Inspections
C) Analyst Team System
D) Examinations
E) C, D
F) A, C - Answer-IRIS ratios and Analyst Team System
/.Max credit/surcharge for Account Premium Modification Plan - Answer-25%
Available to risks that develop a 3 year premium of at least $5,000
/.Agreed amount eliminates the ______ clause - Answer-Coinsurance
/.What organization decides alien insurers have fulfilled criteria and can be included on
the Quarterly Listing of Alien Insurers'?
A) NAIC
B) IRIS
C) IIDPO
D) Lloyd's - Answer-C- International Insurers Department Plan of Operation
/.What information can you find on the Quarterly Listing of Alien Insurers?
A) location of trust account
B) min required balance or trust account
C) market value of trust account
D) if account is funded by letter of credit
E) all of the above - Answer-E - along with trustee bank contacts with telephone and fax
#
/.What AM Best Rating categories are considered Investment Grade for Long-Term
credit?
, A) aaa
B) aa
C) a
D) bbb
E) all of the above - Answer-E) aaa, aa, a, and bbb are all considered investment grade
/.What AM Best Rating categories are considered Investment Grade for Short-Term
credit?
A) AMB-1+
B) AMB-1
C) AMB-2
D) AMB-3
E) all of the above - Answer-E) all of the above
/.What AM Best Financial Strength Rating are considered secure?
A) A++, A+
B) A, A-
C) B++, B+
D) all of the above - Answer-D) all of the above (superior, excellent, good)
/.Lloyd's of London can write on admitted paper in what states/territories? - Answer-
Virgin Islands, Illinois, and Kentucky
/.Which organization body is responsible for regulating Lloyd's (including direct
supervision of managing agents and monitoring capital solvency)? - Answer-FSA -
Financial Service Authority
/.Which bank handles Lloyd's NY Trust Fund? - Answer-City Bank
/.Gross Premiums Written to Policyholders Surplus should be what ratio?
A) 9 to 1
B) 1 to 9
C) 3 to 1
D) 1 to 3 - Answer-Gross premiums should be 9 to 1
/.Is the term 'unusual value' on a financial ratio report good, bad, or not important? -
Answer-Unusual values are BAD.
/.Where can you find the amount of Direct Premiums Written, Reinsurance Assumed -
Affiliates, & Reinsurance Assumed - Non-Affiliates? - Answer-On the Underwriting &
Investment Exhibit page (8)
/.Where can you find the amount of Policyholders Surplus? - Answer-The Liabilities,
Surplus, and Other Funds page (3)
