New York Insurance Rules and Regulations
UPDATED ACTUAL Exam Questions and
CORRECT Answers
Alien Insurer - CORRECT ANSWER An alien insurance an insurer organized under the laws
of a country other than the United States (i.e., Sun Financial Services of Canada).
Appointment - CORRECT ANSWER The authority given to an agent to transact business on
behalf of the insurer is called appointment.
Assumed Names - CORRECT ANSWER An assumed name is any name used by a person
other than their legal name.
Authorized Insurer - CORRECT ANSWER An authorized insurer is an insurer with a
certificate of authority in a particular state. This certificate authorizes the insurer to transact
insurance business in a particular State. An authorized insurer is also called an admitted or a
licensed carrier.
Cease and Desist Order - CORRECT ANSWER The Superintendent may send a cease and
desist order to any person or company believed to have committed an unfair or deceptive act or
believed to violate insurance law. The cease and desist order instructs the accused party to stop
the described act or practice.
Certificate of Authority - CORRECT ANSWER A certificate of authority is the name of the
license to transact insurance business issued to an insurance company. A certificate of authority
must be received from each state the insurer wishes to transact insurance business.
Commingling - CORRECT ANSWER Commingling describes a producer combining
premiums collected with personal funds. Commingling is illegal and may be construed as
larceny.
, Commission - CORRECT ANSWER Commission is the compensation or payments made by
an insurer to a producer to sell an insurance policy.
Consultant - CORRECT ANSWER A consultant includes an individual, firm, limited liability
company, or corporation which, for a fee, in any manner, advises or counsels anyone as to his or
her insurance needs and coverage under any insurance policy or contract.
Continuing Education - CORRECT ANSWER Continuing education describes the regulations
that require producers and other insurance professionals to maintain competency by satisfying
specific education requirements regularly to hold an insurance license. If a licensee fails to
comply with such laws, they will have the license suspended or revoked until compliance is
completed.
Controlled Business - CORRECT ANSWER Controlled business describes insurance written
on the interests of the licensee, the licensee's employer, or the licensee's immediate family.
Defamation - CORRECT ANSWER Defamation is an unfair practice where a producer or
insurer makes false and maliciously critical statements regarding a competing insurer's financial
condition.
Domestic Insurer - CORRECT ANSWER A domestic insurer is an insurer conducting
business in the State in which it was formed, organized, or chartered. Domestic insurers can also
be described as a company with its home or principal office in the State in which it is conducting
business.
Excessive Rate - CORRECT ANSWER Excessive rates are rates that are likely to produce a
long-run profit that is unreasonably high in relation to the riskiness of the class of business or if
expenses are unreasonably high in relation to the services rendered.
Fair Credit Reporting Act - CORRECT ANSWER The Fair Credit Reporting Act is a federal
law passed in 1970 that provides an insurer with the right to receive additional information about
applicants requesting insurance coverage. In addition to permitting the insurer to receive the
information, it also specifies the disclosures that must be provided to the applicant, the insurer's
UPDATED ACTUAL Exam Questions and
CORRECT Answers
Alien Insurer - CORRECT ANSWER An alien insurance an insurer organized under the laws
of a country other than the United States (i.e., Sun Financial Services of Canada).
Appointment - CORRECT ANSWER The authority given to an agent to transact business on
behalf of the insurer is called appointment.
Assumed Names - CORRECT ANSWER An assumed name is any name used by a person
other than their legal name.
Authorized Insurer - CORRECT ANSWER An authorized insurer is an insurer with a
certificate of authority in a particular state. This certificate authorizes the insurer to transact
insurance business in a particular State. An authorized insurer is also called an admitted or a
licensed carrier.
Cease and Desist Order - CORRECT ANSWER The Superintendent may send a cease and
desist order to any person or company believed to have committed an unfair or deceptive act or
believed to violate insurance law. The cease and desist order instructs the accused party to stop
the described act or practice.
Certificate of Authority - CORRECT ANSWER A certificate of authority is the name of the
license to transact insurance business issued to an insurance company. A certificate of authority
must be received from each state the insurer wishes to transact insurance business.
Commingling - CORRECT ANSWER Commingling describes a producer combining
premiums collected with personal funds. Commingling is illegal and may be construed as
larceny.
, Commission - CORRECT ANSWER Commission is the compensation or payments made by
an insurer to a producer to sell an insurance policy.
Consultant - CORRECT ANSWER A consultant includes an individual, firm, limited liability
company, or corporation which, for a fee, in any manner, advises or counsels anyone as to his or
her insurance needs and coverage under any insurance policy or contract.
Continuing Education - CORRECT ANSWER Continuing education describes the regulations
that require producers and other insurance professionals to maintain competency by satisfying
specific education requirements regularly to hold an insurance license. If a licensee fails to
comply with such laws, they will have the license suspended or revoked until compliance is
completed.
Controlled Business - CORRECT ANSWER Controlled business describes insurance written
on the interests of the licensee, the licensee's employer, or the licensee's immediate family.
Defamation - CORRECT ANSWER Defamation is an unfair practice where a producer or
insurer makes false and maliciously critical statements regarding a competing insurer's financial
condition.
Domestic Insurer - CORRECT ANSWER A domestic insurer is an insurer conducting
business in the State in which it was formed, organized, or chartered. Domestic insurers can also
be described as a company with its home or principal office in the State in which it is conducting
business.
Excessive Rate - CORRECT ANSWER Excessive rates are rates that are likely to produce a
long-run profit that is unreasonably high in relation to the riskiness of the class of business or if
expenses are unreasonably high in relation to the services rendered.
Fair Credit Reporting Act - CORRECT ANSWER The Fair Credit Reporting Act is a federal
law passed in 1970 that provides an insurer with the right to receive additional information about
applicants requesting insurance coverage. In addition to permitting the insurer to receive the
information, it also specifies the disclosures that must be provided to the applicant, the insurer's
