age 1 of 62
WEBCE TEST QUESTIONS EXAM QUESTIONS AND
ANSWERS
which of the following situations presents a situation of pure risk?
-knowing that his family is depending on him, Frank wants to
insure his life
-wanting to increase his retirement savings, Saul invests his life
savings in the stock market
-Ralph takes a second mortgage on his house and uses the
proceeds to gamble
-wanting better job security, Ron cashes in his life insurance to
start his own business ......ANSWER........knowing that his family is
depending on him, Frank wants to insure his own life
only pure risk is insurable. Pure risk may only result in a loss,
unlike speculative risk which may result in a gain.
Agent Jill received a letter from the Department of insurance
asking her to submit verification of having completed the
,age 2 of 62
continued education requirements for the previous licensing
period. Three weeks later, the department sent another letter.
Which penalty may the Department impose if Jill has still not
responded to their request a month later? ......ANSWER........a
fine up to $100 per day per violation
A producer has 30 days to respond to a written inquiry from the
Department
Jim's policy expired due to nonpayment of premium. His agent
sends him a statement the following month without notice of the
lapse. If Jim pays the premium and later suffers a loss for which
he files a claim, what will prevent the insurer from denying the
claim?
-estoppel
-utmost good faith
-reasonable expectations
-waiver ......ANSWER........estoppel
,age 3 of 62
BBC insurers filed premium rates for its new line of variable
products on January 15. Within how many days must the
commissioner approve or disapprove the rates?
......ANSWER........30 days
all rate filings are subject to a 30-day waiting period before
they become effective.
The commissioner of insurance can examine the business accounts,
transactions, and records of insurers and producers as often as
necessary, but must do so at least once in how many years?
......ANSWER........5 years
Acme Insurance and Apogee insurance agree to offer different
premium rates for persons of equal risk within a particular class.
They also agree to limit benefits paid to insureds within this class
if the insureds live within certain counties of PA. What are Acme
and Apogee engaging in?
, age 4 of 62
-acceptable marketing and underwriting practices
-unfair and prohibited business practices
-insurance fraud
-false advertising ......ANSWER........they are engaging in unfair
and prohibited business practices
they are agreeing to unreasonable restraint of trade in
insurance business, and they are engaging in unfair
discrimination
which of the following is NOT a remedy available to the PA
commissioner of insurance for committing an unfair method of
competition?
-imprisonment
-cease and desist order
-suspension of license
-revocation of license ......ANSWER........imprisonment is not a
punishment for committing an unfair method of competition
WEBCE TEST QUESTIONS EXAM QUESTIONS AND
ANSWERS
which of the following situations presents a situation of pure risk?
-knowing that his family is depending on him, Frank wants to
insure his life
-wanting to increase his retirement savings, Saul invests his life
savings in the stock market
-Ralph takes a second mortgage on his house and uses the
proceeds to gamble
-wanting better job security, Ron cashes in his life insurance to
start his own business ......ANSWER........knowing that his family is
depending on him, Frank wants to insure his own life
only pure risk is insurable. Pure risk may only result in a loss,
unlike speculative risk which may result in a gain.
Agent Jill received a letter from the Department of insurance
asking her to submit verification of having completed the
,age 2 of 62
continued education requirements for the previous licensing
period. Three weeks later, the department sent another letter.
Which penalty may the Department impose if Jill has still not
responded to their request a month later? ......ANSWER........a
fine up to $100 per day per violation
A producer has 30 days to respond to a written inquiry from the
Department
Jim's policy expired due to nonpayment of premium. His agent
sends him a statement the following month without notice of the
lapse. If Jim pays the premium and later suffers a loss for which
he files a claim, what will prevent the insurer from denying the
claim?
-estoppel
-utmost good faith
-reasonable expectations
-waiver ......ANSWER........estoppel
,age 3 of 62
BBC insurers filed premium rates for its new line of variable
products on January 15. Within how many days must the
commissioner approve or disapprove the rates?
......ANSWER........30 days
all rate filings are subject to a 30-day waiting period before
they become effective.
The commissioner of insurance can examine the business accounts,
transactions, and records of insurers and producers as often as
necessary, but must do so at least once in how many years?
......ANSWER........5 years
Acme Insurance and Apogee insurance agree to offer different
premium rates for persons of equal risk within a particular class.
They also agree to limit benefits paid to insureds within this class
if the insureds live within certain counties of PA. What are Acme
and Apogee engaging in?
, age 4 of 62
-acceptable marketing and underwriting practices
-unfair and prohibited business practices
-insurance fraud
-false advertising ......ANSWER........they are engaging in unfair
and prohibited business practices
they are agreeing to unreasonable restraint of trade in
insurance business, and they are engaging in unfair
discrimination
which of the following is NOT a remedy available to the PA
commissioner of insurance for committing an unfair method of
competition?
-imprisonment
-cease and desist order
-suspension of license
-revocation of license ......ANSWER........imprisonment is not a
punishment for committing an unfair method of competition
