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PENNSYLVANIA PROPERTY AND CASUALTY
LICENSING EXAM 2025 UPDATED ACTUAL
EXAM WITH CORRECT SOLUTIONS.
Law of Large Numbers - correct answer- Recognizes that as
the number of exposure units increases, the more likely it is to
predict accurately the expected outcome.
What must an insurance producer do to apply for a nonresident
license in Pennsylvania? - correct answer- Prove that their
license is in good standing in their home state
Which best describes the responsibilities an agent owes when
they sell a policy? - correct answer- To provide the agreed-upon
insurance and to place coverage with a solvent insurer
Which of the following is not a prohibited marketing practice? -
correct answer- Discrimination among risks
Which law, act, or regulation governs how insurers and their
producers treat personal financial information from individuals?
- correct answer- Privacy of Consumer Financial Information
Regulation
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Retention - correct answer- "do nothing" option; a person
becomes personally responsible for the consequences of risk
Can an insurer change their assumed name? - correct answer-
Yes, but they must notify the Commissioner before using the
assumed name?
Contract of Adhesion - correct answer- "take-it-or-leave-it,"
drafted by one party; other party has no opportunity to
negotiate terms and prices. Party must "adhere" to provisions
as presented
Tad used unauthorized material to assist him on his
examination for his insurance producer license. He justified this
by saying the materials would be available to him in a real life
situation. Which statement is true? - correct answer- Tad
committed a prohibited act.
What is the maximum fine that may be imposed upon a
producer for violating two of the Commissioner's orders? -
correct answer- $20,000; A fine of up to $10,000 for each
violation of an order issued by the commissioner.
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Admitted Insurer - correct answer- An insurance company
authorized and licensed to transact business in a particular
state.
Which of the following is not acting as an insurance producer? -
correct answer- Brian, who is a VP at AllPro's human resources
department and does not receive commissions
Edwin has decided not to retain the risk of home ownership
himself. What method of risk does he choose when he
purchases homeowners insurance? - correct answer- Transfer:
the risk of loss is transferred from the insured to the insurance
company in exchange for a premium payment
Alien Insurer - correct answer- Incorporated in a country other
than the United States
What fine will the Commissioner impose for the practice of
unfair methods of competition? - correct answer- Up to $5,000
for each violation (but not more than $50,000 in a 6 month
period)
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Which of the following is not an unfair claims settlement
practice if committed by an insurance company in
Pennsylvania? - correct answer- Failing to promptly settle a
claim for which liability is uncertain. (An insurer is not obligated
to settle a claim for which it's not clearly liable)
Which of the following would NOT be considered
misrepresentation of an insurance policy? - correct answer-
Enthusiastically promoting an insurance product
Which of the following statements BEST describes the transfer
of risk via an insurance contract? - correct answer- Not all risks
are transferable via insurance contracts
Must the Commissioner conduct an examination of every
foreign or alien insurer licensed in Pennsylvania? - correct
answer- The Commissioner may choose to waive examinations
under certain circumstances
Aleatory Contract - correct answer- One party may receive a
benefit that is out of proportion to the consideration he or she
paid for.
PENNSYLVANIA PROPERTY AND CASUALTY
LICENSING EXAM 2025 UPDATED ACTUAL
EXAM WITH CORRECT SOLUTIONS.
Law of Large Numbers - correct answer- Recognizes that as
the number of exposure units increases, the more likely it is to
predict accurately the expected outcome.
What must an insurance producer do to apply for a nonresident
license in Pennsylvania? - correct answer- Prove that their
license is in good standing in their home state
Which best describes the responsibilities an agent owes when
they sell a policy? - correct answer- To provide the agreed-upon
insurance and to place coverage with a solvent insurer
Which of the following is not a prohibited marketing practice? -
correct answer- Discrimination among risks
Which law, act, or regulation governs how insurers and their
producers treat personal financial information from individuals?
- correct answer- Privacy of Consumer Financial Information
Regulation
,2 | Page
Retention - correct answer- "do nothing" option; a person
becomes personally responsible for the consequences of risk
Can an insurer change their assumed name? - correct answer-
Yes, but they must notify the Commissioner before using the
assumed name?
Contract of Adhesion - correct answer- "take-it-or-leave-it,"
drafted by one party; other party has no opportunity to
negotiate terms and prices. Party must "adhere" to provisions
as presented
Tad used unauthorized material to assist him on his
examination for his insurance producer license. He justified this
by saying the materials would be available to him in a real life
situation. Which statement is true? - correct answer- Tad
committed a prohibited act.
What is the maximum fine that may be imposed upon a
producer for violating two of the Commissioner's orders? -
correct answer- $20,000; A fine of up to $10,000 for each
violation of an order issued by the commissioner.
,3 | Page
Admitted Insurer - correct answer- An insurance company
authorized and licensed to transact business in a particular
state.
Which of the following is not acting as an insurance producer? -
correct answer- Brian, who is a VP at AllPro's human resources
department and does not receive commissions
Edwin has decided not to retain the risk of home ownership
himself. What method of risk does he choose when he
purchases homeowners insurance? - correct answer- Transfer:
the risk of loss is transferred from the insured to the insurance
company in exchange for a premium payment
Alien Insurer - correct answer- Incorporated in a country other
than the United States
What fine will the Commissioner impose for the practice of
unfair methods of competition? - correct answer- Up to $5,000
for each violation (but not more than $50,000 in a 6 month
period)
, 4 | Page
Which of the following is not an unfair claims settlement
practice if committed by an insurance company in
Pennsylvania? - correct answer- Failing to promptly settle a
claim for which liability is uncertain. (An insurer is not obligated
to settle a claim for which it's not clearly liable)
Which of the following would NOT be considered
misrepresentation of an insurance policy? - correct answer-
Enthusiastically promoting an insurance product
Which of the following statements BEST describes the transfer
of risk via an insurance contract? - correct answer- Not all risks
are transferable via insurance contracts
Must the Commissioner conduct an examination of every
foreign or alien insurer licensed in Pennsylvania? - correct
answer- The Commissioner may choose to waive examinations
under certain circumstances
Aleatory Contract - correct answer- One party may receive a
benefit that is out of proportion to the consideration he or she
paid for.
