❖ 17-70 – NY Independent General Adjuster License
Exam Updated 2026 | 250+ Practice Questions &
Verified Answers | Comprehensive Study Guide,
Exam Prep Test Bank, New York Insurance Law,
Property & Casualty Insurance, Claims
Investigation, Policy Interpretation, Coverage
Analysis, Loss Adjustment, Liability Evaluation,
Claims Settlement, Ethics, Insurance Regulations,
Detailed Rationales, Licensing Exam Success
Question 1: In the context of New York Insurance Law, what is the primary
statutory purpose of requiring a "proof of loss" to be submitted by a first-party
claimant?
A. To provide the insurer with a legally binding estimate of the claim's value, which
cannot be later amended.
B. To formally notify the insurer of the loss and provide a sworn statement of the facts
and amount of loss, enabling the insurer to evaluate its liability.
C. To transfer the right of recovery from the insured to the insurer immediately upon
filing.
D. To act as a formal complaint to the New York Department of Financial Services,
initiating a regulatory investigation.
CORRECT ANSWER: B. To formally notify the insurer of the loss and provide a
sworn statement of the facts and amount of loss, enabling the insurer to
evaluate its liability.
Rationale:Under New York Insurance Law, a proof of loss is a formal, sworn statement
by the insured that provides the insurer with the necessary details to evaluate the claim.
It is not a binding estimate (A), it does not trigger subrogation (C), and it is not a
complaint to the DFS (D), which is for broader regulatory issues.
Question 2: A New York licensed Independent Adjuster (IA) is handling a claim
in a county where a local ordinance requires a separate license to conduct
business. Which of the following is the most accurate statement regarding the
IA's obligation?
A. The IA does not need to comply, as the state license preempts all local ordinances.
B. The IA must comply with the local ordinance if it is not in conflict with state law and
is a valid exercise of local authority.
C. The IA can ignore the ordinance, as it only applies to resident adjusters, not
independent adjusters.
D. The IA must obtain a waiver from the New York Department of Financial Services to
operate in that county.
,CORRECT ANSWER: B. The IA must comply with the local ordinance if it is not
in conflict with state law and is a valid exercise of local authority.
Rationale:While New York state law provides a framework for licensing, IAs must also
comply with valid local business ordinances and regulations. State law does not
generally preempt local laws unless there is a direct conflict (A). The ordinance applies
to anyone conducting business, not just residents (C), and the DFS does not issue
waivers for local law compliance (D).
Question 3: Under New York regulations, which of the following is a prohibited
practice regarding an independent adjuster's fee arrangement with an insured?
A. Charging a flat fee for handling a complex commercial property claim.
B. Charging a percentage of the final settlement amount as a contingency fee.
C. Charging an hourly rate for time spent investigating a claim.
D. Charging a retainer fee that is credited against the final invoice.
CORRECT ANSWER: B. Charging a percentage of the final settlement amount
as a contingency fee.
Rationale:New York law and ethical guidelines generally prohibit adjusters from
charging a contingency fee based on a percentage of the settlement, as this creates a
conflict of interest where the adjuster may be incentivized to inflate the claim. Flat fees
(A), hourly rates (C), and retainers (D) are acceptable practices.
Question 4: When an independent adjuster in New York discovers evidence of
potential fraud by the insured, what is the adjuster's primary duty?
A. To immediately deny the claim without further investigation.
B. To report the findings to the insurer and refer the matter for further investigation,
while maintaining the confidentiality of the investigation.
C. To contact the insured directly and threaten to report them to the authorities to force
a withdrawal.
D. To report the fraud to the New York Department of Financial Services before
notifying the insurer.
CORRECT ANSWER: B. To report the findings to the insurer and refer the
matter for further investigation, while maintaining the confidentiality of the
investigation.
Rationale:The IA acts as an agent of the insurer. The primary duty is to report the
findings to the insurer. The insurer then decides on the next steps, which may include a
Special Investigation Unit (SIU) referral. The adjuster should not deny the claim without
the insurer's authority (A), threaten the insured (C), or report directly to the DFS without
the insurer's involvement (D).
,Question 5: Under New York's standard fire policy requirements, which party
is entitled to the full amount of the loss payable under the policy in the event
of a total loss?
A. The mortgagee, to the extent of its interest.
B. The insured, if the policy contains a loss-payable clause.
C. The named insured and all lienholders named in the policy, payable as their interests
may appear.
D. The New York State Insurance Guaranty Corporation, to cover the shortfall.
CORRECT ANSWER: C. The named insured and all lienholders named in the
policy, payable as their interests may appear.
Rationale:Under the standard New York fire policy, in the event of a total loss, the
insurer is obligated to pay the named insured and any named mortgagees or lienholders
as their respective interests appear. The mortgagee is only paid to the extent of its
interest (A), and the Guaranty Corporation only steps in for insolvent insurers (D).
Question 6: A New York IA is adjusting a commercial general liability (CGL)
claim where a third party is alleging bodily injury. The IA’s primary duty at the
initial investigation stage is to:
A. Determine the amount of damages and make a settlement offer.
B. Establish the identity of the claimant and gather all relevant facts, evidence, and
documents to determine coverage.
C. Immediately deny coverage to protect the insurer's reserve.
D. Advise the insured to accept the claimant's initial demand.
CORRECT ANSWER: B. Establish the identity of the claimant and gather all
relevant facts, evidence, and documents to determine coverage.
Rationale:The initial investigation is about fact-finding and coverage verification.
Settlement (A), denial (C), or advising on a demand (D) are premature before a proper
investigation is complete.
Question 7: In New York, what is the standard limitation period (statute of
limitations) for an action on a fire insurance policy?
A. 1 year
B. 2 years
C. 3 years
D. 5 years
CORRECT ANSWER: B. 2 years
, Rationale:Under New York Insurance Law, the statute of limitations for an action on a
fire insurance policy is generally 2 years from the date of the loss.
Question 8: An insured in New York believes their claim was unfairly denied.
What is the primary regulatory body to which they can file a consumer
complaint against the insurer or adjuster?
A. New York State Supreme Court
B. New York State Department of Financial Services (DFS)
C. National Association of Insurance Commissioners (NAIC)
D. Federal Emergency Management Agency (FEMA)
CORRECT ANSWER: B. New York State Department of Financial Services (DFS)
Rationale:The New York Department of Financial Services is the primary state agency
that regulates insurance companies and licensed professionals, including adjusters, and
handles consumer complaints.
Question 9: Which of the following is an essential element of a valid contract
of insurance in New York?
A. The policy must be issued only by a domestic insurer.
B. The insured must have an insurable interest in the subject matter at the time the
policy is issued.
C. The contract must be written in a language other than English if the insured's primary
language is not English.
D. The contract must provide coverage for all perils, even if excluded by the policy.
CORRECT ANSWER: B. The insured must have an insurable interest in the
subject matter at the time the policy is issued.
Rationale:Insurable interest is a fundamental legal principle for any valid insurance
contract. It prevents gambling and moral hazard. The insurer does not need to be
domestic (A), language requirements are not an essential element (C), and policies can
have exclusions (D).
Question 10: When taking a recorded statement from a claimant in New York,
what is the legal obligation of the independent adjuster?
A. To read the claimant their "Miranda" rights.
B. To inform the claimant that the statement is voluntary and that they have the right to
an attorney.
C. To ensure the claimant understands they have a duty to cooperate with the adjuster.
D. To guarantee the statement will not be used in any legal proceeding.
Exam Updated 2026 | 250+ Practice Questions &
Verified Answers | Comprehensive Study Guide,
Exam Prep Test Bank, New York Insurance Law,
Property & Casualty Insurance, Claims
Investigation, Policy Interpretation, Coverage
Analysis, Loss Adjustment, Liability Evaluation,
Claims Settlement, Ethics, Insurance Regulations,
Detailed Rationales, Licensing Exam Success
Question 1: In the context of New York Insurance Law, what is the primary
statutory purpose of requiring a "proof of loss" to be submitted by a first-party
claimant?
A. To provide the insurer with a legally binding estimate of the claim's value, which
cannot be later amended.
B. To formally notify the insurer of the loss and provide a sworn statement of the facts
and amount of loss, enabling the insurer to evaluate its liability.
C. To transfer the right of recovery from the insured to the insurer immediately upon
filing.
D. To act as a formal complaint to the New York Department of Financial Services,
initiating a regulatory investigation.
CORRECT ANSWER: B. To formally notify the insurer of the loss and provide a
sworn statement of the facts and amount of loss, enabling the insurer to
evaluate its liability.
Rationale:Under New York Insurance Law, a proof of loss is a formal, sworn statement
by the insured that provides the insurer with the necessary details to evaluate the claim.
It is not a binding estimate (A), it does not trigger subrogation (C), and it is not a
complaint to the DFS (D), which is for broader regulatory issues.
Question 2: A New York licensed Independent Adjuster (IA) is handling a claim
in a county where a local ordinance requires a separate license to conduct
business. Which of the following is the most accurate statement regarding the
IA's obligation?
A. The IA does not need to comply, as the state license preempts all local ordinances.
B. The IA must comply with the local ordinance if it is not in conflict with state law and
is a valid exercise of local authority.
C. The IA can ignore the ordinance, as it only applies to resident adjusters, not
independent adjusters.
D. The IA must obtain a waiver from the New York Department of Financial Services to
operate in that county.
,CORRECT ANSWER: B. The IA must comply with the local ordinance if it is not
in conflict with state law and is a valid exercise of local authority.
Rationale:While New York state law provides a framework for licensing, IAs must also
comply with valid local business ordinances and regulations. State law does not
generally preempt local laws unless there is a direct conflict (A). The ordinance applies
to anyone conducting business, not just residents (C), and the DFS does not issue
waivers for local law compliance (D).
Question 3: Under New York regulations, which of the following is a prohibited
practice regarding an independent adjuster's fee arrangement with an insured?
A. Charging a flat fee for handling a complex commercial property claim.
B. Charging a percentage of the final settlement amount as a contingency fee.
C. Charging an hourly rate for time spent investigating a claim.
D. Charging a retainer fee that is credited against the final invoice.
CORRECT ANSWER: B. Charging a percentage of the final settlement amount
as a contingency fee.
Rationale:New York law and ethical guidelines generally prohibit adjusters from
charging a contingency fee based on a percentage of the settlement, as this creates a
conflict of interest where the adjuster may be incentivized to inflate the claim. Flat fees
(A), hourly rates (C), and retainers (D) are acceptable practices.
Question 4: When an independent adjuster in New York discovers evidence of
potential fraud by the insured, what is the adjuster's primary duty?
A. To immediately deny the claim without further investigation.
B. To report the findings to the insurer and refer the matter for further investigation,
while maintaining the confidentiality of the investigation.
C. To contact the insured directly and threaten to report them to the authorities to force
a withdrawal.
D. To report the fraud to the New York Department of Financial Services before
notifying the insurer.
CORRECT ANSWER: B. To report the findings to the insurer and refer the
matter for further investigation, while maintaining the confidentiality of the
investigation.
Rationale:The IA acts as an agent of the insurer. The primary duty is to report the
findings to the insurer. The insurer then decides on the next steps, which may include a
Special Investigation Unit (SIU) referral. The adjuster should not deny the claim without
the insurer's authority (A), threaten the insured (C), or report directly to the DFS without
the insurer's involvement (D).
,Question 5: Under New York's standard fire policy requirements, which party
is entitled to the full amount of the loss payable under the policy in the event
of a total loss?
A. The mortgagee, to the extent of its interest.
B. The insured, if the policy contains a loss-payable clause.
C. The named insured and all lienholders named in the policy, payable as their interests
may appear.
D. The New York State Insurance Guaranty Corporation, to cover the shortfall.
CORRECT ANSWER: C. The named insured and all lienholders named in the
policy, payable as their interests may appear.
Rationale:Under the standard New York fire policy, in the event of a total loss, the
insurer is obligated to pay the named insured and any named mortgagees or lienholders
as their respective interests appear. The mortgagee is only paid to the extent of its
interest (A), and the Guaranty Corporation only steps in for insolvent insurers (D).
Question 6: A New York IA is adjusting a commercial general liability (CGL)
claim where a third party is alleging bodily injury. The IA’s primary duty at the
initial investigation stage is to:
A. Determine the amount of damages and make a settlement offer.
B. Establish the identity of the claimant and gather all relevant facts, evidence, and
documents to determine coverage.
C. Immediately deny coverage to protect the insurer's reserve.
D. Advise the insured to accept the claimant's initial demand.
CORRECT ANSWER: B. Establish the identity of the claimant and gather all
relevant facts, evidence, and documents to determine coverage.
Rationale:The initial investigation is about fact-finding and coverage verification.
Settlement (A), denial (C), or advising on a demand (D) are premature before a proper
investigation is complete.
Question 7: In New York, what is the standard limitation period (statute of
limitations) for an action on a fire insurance policy?
A. 1 year
B. 2 years
C. 3 years
D. 5 years
CORRECT ANSWER: B. 2 years
, Rationale:Under New York Insurance Law, the statute of limitations for an action on a
fire insurance policy is generally 2 years from the date of the loss.
Question 8: An insured in New York believes their claim was unfairly denied.
What is the primary regulatory body to which they can file a consumer
complaint against the insurer or adjuster?
A. New York State Supreme Court
B. New York State Department of Financial Services (DFS)
C. National Association of Insurance Commissioners (NAIC)
D. Federal Emergency Management Agency (FEMA)
CORRECT ANSWER: B. New York State Department of Financial Services (DFS)
Rationale:The New York Department of Financial Services is the primary state agency
that regulates insurance companies and licensed professionals, including adjusters, and
handles consumer complaints.
Question 9: Which of the following is an essential element of a valid contract
of insurance in New York?
A. The policy must be issued only by a domestic insurer.
B. The insured must have an insurable interest in the subject matter at the time the
policy is issued.
C. The contract must be written in a language other than English if the insured's primary
language is not English.
D. The contract must provide coverage for all perils, even if excluded by the policy.
CORRECT ANSWER: B. The insured must have an insurable interest in the
subject matter at the time the policy is issued.
Rationale:Insurable interest is a fundamental legal principle for any valid insurance
contract. It prevents gambling and moral hazard. The insurer does not need to be
domestic (A), language requirements are not an essential element (C), and policies can
have exclusions (D).
Question 10: When taking a recorded statement from a claimant in New York,
what is the legal obligation of the independent adjuster?
A. To read the claimant their "Miranda" rights.
B. To inform the claimant that the statement is voluntary and that they have the right to
an attorney.
C. To ensure the claimant understands they have a duty to cooperate with the adjuster.
D. To guarantee the statement will not be used in any legal proceeding.
