CALIFORNIA P&C INSURANCE EXAM
QUESTIONS AND ANSWERS WITH
VERIFIED SOLUTIONS 100% CORRECT
RATED A+ NEWLY UPDATED 2025
CODE: CIC
✔✔ California Insurance Code
Written by: State Legislature
Enforced by: California Department of Insurance (CDI)
Main Areas Covered:
1. General rules governing insurance
2. Lines of insurance
3. The Insurance Commissioner
4. Insurance adjusters
CODE: Insurance Commissioner
✔✔ Elected by the public
Serves a 4-year term
May serve up to 2 terms
CODE: Insurance Agent
✔✔ Appointed by and acts on behalf of the insurer
Represents one company (captive agent)
Earns commission on sales
CODE: Insurance Broker
,✔✔ Represents the insured
Works in the client’s best interest
May charge a broker fee
CODE: Solicitor
✔✔ Not licensed independently
Supports a broker or agent
Cannot write insurance business themselves
CODE: Life & Health Agent
✔✔ Sells two lines of insurance
Life insurance
Health insurance
CODE: Life & Disability Analyst
✔✔ Consultant role
Licensed to analyze life and disability policies
Receives a fee directly from the insured (client)
CODE: ADMITTED vs. NON-ADMITTED - ANSWER✔✔admitted - are
approved to transact by state
non-amitted - not approved. sold thru surplus lines broker
CODE: DOMICILE - ANSWER✔✔domestic - ca/ca
foreign - ny/ca
, alien - mexico/ca
CODE: STOCK INSURER - ANSWER✔✔organized to make profit for their
stockholders
CODE: MUTUAL INSURER - ANSWER✔✔owned by policyowners
CODE: MCCARRAN-FERGUSON ACT - ANSWER✔✔gave states the right to
regulate insurance
CODE: DIRECT MARKETING - ANSWER✔✔selling insurance out of a vending
machine
CODE: DEMUTUALIZATION - ANSWER✔✔when a mutual insurer changes to
a stock insurer
CODE: SUBROGATION - ANSWER✔✔third party substitution money rights. the
insurer's right to seek recovery from a third party.
the LAW of LARGE NUMBERs - ANSWER✔✔the greater the number of
insureds, the more accurately we can predict the losses, and set the appropriate
premium
CODE: INSOLVENT - ANSWER✔✔carrier only able to provide for all its
liabilities and for reinsurance of all outstanding risks.
QUESTIONS AND ANSWERS WITH
VERIFIED SOLUTIONS 100% CORRECT
RATED A+ NEWLY UPDATED 2025
CODE: CIC
✔✔ California Insurance Code
Written by: State Legislature
Enforced by: California Department of Insurance (CDI)
Main Areas Covered:
1. General rules governing insurance
2. Lines of insurance
3. The Insurance Commissioner
4. Insurance adjusters
CODE: Insurance Commissioner
✔✔ Elected by the public
Serves a 4-year term
May serve up to 2 terms
CODE: Insurance Agent
✔✔ Appointed by and acts on behalf of the insurer
Represents one company (captive agent)
Earns commission on sales
CODE: Insurance Broker
,✔✔ Represents the insured
Works in the client’s best interest
May charge a broker fee
CODE: Solicitor
✔✔ Not licensed independently
Supports a broker or agent
Cannot write insurance business themselves
CODE: Life & Health Agent
✔✔ Sells two lines of insurance
Life insurance
Health insurance
CODE: Life & Disability Analyst
✔✔ Consultant role
Licensed to analyze life and disability policies
Receives a fee directly from the insured (client)
CODE: ADMITTED vs. NON-ADMITTED - ANSWER✔✔admitted - are
approved to transact by state
non-amitted - not approved. sold thru surplus lines broker
CODE: DOMICILE - ANSWER✔✔domestic - ca/ca
foreign - ny/ca
, alien - mexico/ca
CODE: STOCK INSURER - ANSWER✔✔organized to make profit for their
stockholders
CODE: MUTUAL INSURER - ANSWER✔✔owned by policyowners
CODE: MCCARRAN-FERGUSON ACT - ANSWER✔✔gave states the right to
regulate insurance
CODE: DIRECT MARKETING - ANSWER✔✔selling insurance out of a vending
machine
CODE: DEMUTUALIZATION - ANSWER✔✔when a mutual insurer changes to
a stock insurer
CODE: SUBROGATION - ANSWER✔✔third party substitution money rights. the
insurer's right to seek recovery from a third party.
the LAW of LARGE NUMBERs - ANSWER✔✔the greater the number of
insureds, the more accurately we can predict the losses, and set the appropriate
premium
CODE: INSOLVENT - ANSWER✔✔carrier only able to provide for all its
liabilities and for reinsurance of all outstanding risks.
