PSI PROPERTY AND CASUALTY
PRACTICE TEST – CALIFORNIA
QUESTIONS AND ANSWERS WITH
VERIFIED SOLUTIONS 100% CORRECT
RATED A+
1. How does an "admitted" person differ from a "non-admitted" person, as it
pertains to insurance?
✔✔ 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?
✔✔ 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?
✔✔ If admitted to do business in this state, except those otherwise exempted.
4. According to CIC Section 1711, an organization ceases to exist as an entity
eligible to hold a license EXCEPT?
✔✔ Upon the termination of all contracts. (This is the incorrect exception—
termination of all contracts is not one of the listed triggers for cessation under CIC
1711.)
5. All of the following define insolvency EXCEPT?
✔✔ Revocation of certificate of authority by the commissioner.
(Revocation is a consequence, not a definition of insolvency.)
,6. As used in the Insurance Code, the word "shall" is mandatory and the
word "may" is permissive EXCEPT?
✔✔ Unless otherwise apparent from the context.
(This exception recognizes that context can override default definitions.)
7. 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? - ANSWER✔✔o Poof
of claim
8. When examination of an insurer shows the insurer to be insolvent and a danger
to the public, which authority is granted to the Commissioner by the CIC? -
ANSWER✔✔o The commissioner may take possession of offices, books and
property immediately without court order.
9. An insurance agent is a person who transacts all of the following types of
insurance EXCEPT - ANSWER✔✔o Life insurance
10. Which of the following is TRUE regarding continuing education requirements
of an agent or broker? - ANSWER✔✔o Any licensee shall satisfactorily complete
24 hours of instruction prior to license renewal.
11. All of the following are included as definitions of "transact" as applied to
insurance EXCEPT? - ANSWER✔✔o Underwriting
12. Which group of people is offered additional protection by the Unfair Practices
Act that regulates trade practices in the business of insurance? - ANSWER✔✔o
Survivors of the Holocaust
, 13. Which of the following can the insurer do if the insured intentionally conceals
or misrepresents a material fact concerning any coverage part? - ANSWER✔✔o
Rescind the contract
14. While both work with an insurer, how does an "Insurance broker" differ from
an "insurance agent"? - ANSWER✔✔o The broker does not transact on behalf of
an insurer, while the agent does.
15. How can a licensee surrender any license for cancellation? - ANSWER✔✔o
By submitting written notice or by delivering the license to the commissioner
16. The following are all penalties for unlawfully acting as an insurer without a
certificate of authority EXCEPT? - ANSWER✔✔The individual will be banned
from practicing insurance for a period of 5 years
17. Materiality to be solely determined by which of the following? -
ANSWER✔✔o The probable and reasonable influence of the facts upon the party
to whom the communication is due
18. What is a solicitor employed to do for a policy other than life? -
ANSWER✔✔To aid a property and casualty agent or broker in transacting
insurance.
19. ALL of the following are TRUE regarding the process to change the California
Code of Regulations EXCEPT? - ANSWER✔✔o the Office of Administrative
Law (OAL) may substitute its own judgment for that of the rulemaking agency.
PRACTICE TEST – CALIFORNIA
QUESTIONS AND ANSWERS WITH
VERIFIED SOLUTIONS 100% CORRECT
RATED A+
1. How does an "admitted" person differ from a "non-admitted" person, as it
pertains to insurance?
✔✔ 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?
✔✔ 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?
✔✔ If admitted to do business in this state, except those otherwise exempted.
4. According to CIC Section 1711, an organization ceases to exist as an entity
eligible to hold a license EXCEPT?
✔✔ Upon the termination of all contracts. (This is the incorrect exception—
termination of all contracts is not one of the listed triggers for cessation under CIC
1711.)
5. All of the following define insolvency EXCEPT?
✔✔ Revocation of certificate of authority by the commissioner.
(Revocation is a consequence, not a definition of insolvency.)
,6. As used in the Insurance Code, the word "shall" is mandatory and the
word "may" is permissive EXCEPT?
✔✔ Unless otherwise apparent from the context.
(This exception recognizes that context can override default definitions.)
7. 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? - ANSWER✔✔o Poof
of claim
8. When examination of an insurer shows the insurer to be insolvent and a danger
to the public, which authority is granted to the Commissioner by the CIC? -
ANSWER✔✔o The commissioner may take possession of offices, books and
property immediately without court order.
9. An insurance agent is a person who transacts all of the following types of
insurance EXCEPT - ANSWER✔✔o Life insurance
10. Which of the following is TRUE regarding continuing education requirements
of an agent or broker? - ANSWER✔✔o Any licensee shall satisfactorily complete
24 hours of instruction prior to license renewal.
11. All of the following are included as definitions of "transact" as applied to
insurance EXCEPT? - ANSWER✔✔o Underwriting
12. Which group of people is offered additional protection by the Unfair Practices
Act that regulates trade practices in the business of insurance? - ANSWER✔✔o
Survivors of the Holocaust
, 13. Which of the following can the insurer do if the insured intentionally conceals
or misrepresents a material fact concerning any coverage part? - ANSWER✔✔o
Rescind the contract
14. While both work with an insurer, how does an "Insurance broker" differ from
an "insurance agent"? - ANSWER✔✔o The broker does not transact on behalf of
an insurer, while the agent does.
15. How can a licensee surrender any license for cancellation? - ANSWER✔✔o
By submitting written notice or by delivering the license to the commissioner
16. The following are all penalties for unlawfully acting as an insurer without a
certificate of authority EXCEPT? - ANSWER✔✔The individual will be banned
from practicing insurance for a period of 5 years
17. Materiality to be solely determined by which of the following? -
ANSWER✔✔o The probable and reasonable influence of the facts upon the party
to whom the communication is due
18. What is a solicitor employed to do for a policy other than life? -
ANSWER✔✔To aid a property and casualty agent or broker in transacting
insurance.
19. ALL of the following are TRUE regarding the process to change the California
Code of Regulations EXCEPT? - ANSWER✔✔o the Office of Administrative
Law (OAL) may substitute its own judgment for that of the rulemaking agency.
