NC CLAIMS ADJUSTER UPDATED EVALUATION TEST
QUESTIONS AND SOLUTIONS RATED A+
✔✔Conditions - ✔✔These are the provisions and stipulations of the policy. Conditions
state the rules of conduct for both the insurance and insurer. Important conditions are
the payment of premium, providing proof of loss and accurate responses to application
questions.
✔✔Exclusions - ✔✔These list what perils are not covered. Exclusions tend to be those
things considered uninsurable.
✔✔Endorsements - ✔✔Endorsements modify (add or take away rights) the basic
contract.
✔✔Definitions - ✔✔This part of the contract explains the meaning of important terms
found in the contract, such as who is a named insured, who is an insured and what
constitutes a premises.
✔✔Insurance contract consists of: - ✔✔1. Declarations page, 2. Insuring Agreements,
3. Conditions, 4. Exclusions, 5. Endorsements, 6. Definitions
✔✔Unilateral Contract - ✔✔Can only be enforced by one party. Only insurance
company makes legally enforceable promise.
✔✔Adhesion - ✔✔Insurance contract and its wording are prepared by the insurer. The
applicant cannot bargain over that wording. Therefore, the contract is purchased as it is
worded and the insured is "stuck with" that wording.
✔✔Waiver - ✔✔A legal doctrine placed in writing that means the voluntary
abandonment of a right or advantage.
✔✔Estoppel - ✔✔One party to a contract may be estopped (stopped) by their past
words or actions from asserting a right granted to them in the contract. An estoppel
would be the legal consequences of a waiver.
✔✔Representations - ✔✔Statements in the application that are made with utmost good
faith, but they are not guaranteed to be accurate.
✔✔Warranties - ✔✔Statements guaranteed as to accuracy for both past and future
events.
✔✔Misrepresentation - ✔✔Simply, this is a lie regarding material information.
,✔✔Concealment - ✔✔Withholding of a material fact. Concealment is not an overt lie,
but a failure to state the entire truth.
✔✔Mono line Policy - ✔✔Provides property or liability insurance
✔✔Multi line Policy - ✔✔Provides both property and liability insurance.
✔✔Package - ✔✔Commercial Insurance only.
✔✔General Regulations of Insurance - ✔✔The purpose of the statutes and regulations
governing the conduct of the insurance industry is to promote and protect the public
welfare.
✔✔Commissioner of Insurance - ✔✔Chief regulatory body for the oversight of the
industry. The voters of this state elect the Commissioner of Insurance to a four-year
term of office as a member of the Council of State. If the office becomes vacant during
the Commissioner's term, the Governor shall appoint the replacement.
✔✔Commissioner of Insurance responsibilities - ✔✔1. Assure that insurance laws are
adhered to by all parties. The Commissioner or his/her Deputy has the power to issue
subpoenas and/or administer oaths. To assure adherence to the law, the Commissioner
may institute civil actions or criminal prosecutions through the Attorney General. 2.
Monitor the financial stability of admitted companies through the review of their annual
financial statements. 3. Provide assurances that companies and agents are competent
to conduct the business of insurance. 4. Regulate unfair trade and claims practices. 5.
Approve both rates and forms for insurance marketed in this State. The Department will
make available for public inspection the rates and deviations for residential and non-
fleet (personal) automobile coverage. 6. All examinations or investigations may be
conducted by the Commissioner personally or by someone appointed by the
Commissioner. Any examination and/or hearing must be preceded by at least 10 days
prior to written notice to all parties. 7. The Commissioner may suspend an agent's or
adjuster's license prior to a hearing if the Commissioner believes such action is
necessary to protect the publish health, safety or welfare. Revocation of authority can
only be done after a hearing or conviction in court of violating insurance laws.
✔✔Regulations Regarding Insurance Transactions - ✔✔1. Insurance company's,
agency's or agent's records are subject to inspection to determine compliance with the
law. The refusal to submit to an examination of records is also grounds for the
revocation or refusal of licensure. All records must be maintained for no less than 5
years. 2. All statements given on an applications are considered representations. 3. Any
deductible or cost-sharing amount between the named insured and insurer must be
expressed in the contract and no provision increasing this amount is allowed. Cost
sharing (coinsurance clauses) can be included in insurance contracts only if the policy
prominently displays the notice that the contract has a coinsurance clause. 4. It is
unlawful for an insurer to discriminate in the rates charged for automobile coverage on
,the basis of either age or sex. 5. When a proof of loss is required by an insurer, the
company must apply such a form within 15 days of receiving notification of the claim. If
not provided, the insured may submit the proof of loss with any written document that
provides the necessary information concerning the occurrence and the extent of the
loss. 6. It is unlawful for lending institutions to require the purchase of insurance through
the lending institution as a condition of making or renewing a loan. 7. Twisting involves
misrepresentation of a policy's terms and values to induce the lapse or replacement of
an existing contract of insurance. 8. A rebate is any valuable consideration not specified
in the contract, which is offered as an inducement to purchase insurance. 9. It is illegal
for an agent to charge money in excess of the premium for policy fee's or the
performance of services unless a prominent sign is posted in the business lobby, the
client provides prior written consent to each charge and a separate receipt is issued for
the payme
✔✔Twisting - ✔✔Involves the misrepresentation of a policy's terms and values to
induce the lapse or replacement of an existing contract of insurance. Such actions
would be to the detriment of the insured.
✔✔Rebate - ✔✔Any valuable consideration, not specified in the contract, which is
offered as an inducement to purchase insurance. It is illegal for any person to offer or
for any person to accept such an inducement.
✔✔Commingling - ✔✔The accounting records of agents shall be separate and apart
from any other business records and funds due to insurers and return premiums due to
policyholders must be available t all times.
✔✔Payment Receipts - ✔✔Issued by an agent should e dated and contain the name
and address of the agent and the name of the insurance company. The receipt should
also be signed by the person accepting the payment.
✔✔Agent, Adjuster or Insurer's Representative shall: - ✔✔A. Identify himself or herself
and his or her occupation; and B. Provide his or her National Producer Number and the
Department's website address and phone number for verification of licensure status
when requested to show proof of licensure.
✔✔Licensing Law (Resident Licensing) - ✔✔All persons wishing to solicit and/or
effectuate insurance coverage as an agent for an insurer must obtain an agent's
license. Such licenses are perpetual unless surrendered, terminated or revoked. Will
remain active provided they meet the continuing education requirements each 2 years.
Applicants must be at least 18 years old, trustworthy, financially responsible, have not
willfully violated any insurance law and reside in this state. Applicants must show
certification of having completed 20 hours of pre-licensing education for Life, Accident
and Health, Property, Casualty and Personal Lines insurance prior to taking the state
exam, unless exempt from requirements. Medicare Supplement/Long Term Care
supplemental licensure requires 10 hours of pre-licensing education.
, ✔✔Continuing Education Requirements - ✔✔Two years following the biennium in which
their license was issued based on the licensee's month and year of birth. 1. 24 hours of
continuing education are required for all lines of authority with three of 24 hours
covering ethics. 2. 3 Hours of CE on flood insurance every four years.
✔✔Change of Residency - ✔✔Must be communicated to the Commissioner within 10
business days.
✔✔Change of Name - ✔✔Must be communicated to the Commissioner within 30 days.
✔✔Appointment Cancellations - ✔✔Shall be communicated within 30 days.
✔✔Temporary License - ✔✔A temporary license is only good for 180 days.
✔✔Unfair Trade Practices Act - ✔✔The purpose of this act is to prohibit all practices
considered by this state as an unfair method of competition or deceptive practice. 1.
Misrepresentation or False Advertising of Policies, 2. Defamation, 3. Boycotting,
Coercion and Intimidation, 4. Filing false financial statements, 5. Unfair Discrimination
between individuals with similar exposures and hazards, 6. Rebating is any valuable
consideration, not specified in the contract, which is offered as an inducement to
purchase insurance, 7. Misuse of Confidential information.
✔✔Misrepresentation or False Advertising Policies - ✔✔A. Misrepresentation of benefits
(twisted), B. Misrepresentation of dividends, C. Misrepresentation of the financial
condition or reserves of the insurer, D. Names or titles of insurance policies that
misrepresent the true nature of the contract.
✔✔Defamation - ✔✔Circulation, by either oral or written means, of a false or derogatory
statement intended to injure another party.
✔✔Insurance Information and Privacy Protection Act - ✔✔Outlines procedures to be
used to protect the confidential nature of the information processed in the insurance
industry. However, this act does not apply to information collected from public records of
a governmental authority, such as the NC Dept. of Motor Vehicles.
✔✔Adverse Underwriting Decision - ✔✔1. An application for insurance has been
rejected, 2. An existing policy has been terminated, 3. Coverage has been placed with a
residual market mechanism. Failure to place coverage with a company requested by the
applicant and charging of a higher rate based on information that differs from that
supplied by the insured. However, charging higher premium due to an increase in
hazard is not considered to be an adverse underwriting decision.
✔✔Pretext Interviews - ✔✔Conducted when an individual does not reveal their identity
or they pose as someone else in order to obtain information.
QUESTIONS AND SOLUTIONS RATED A+
✔✔Conditions - ✔✔These are the provisions and stipulations of the policy. Conditions
state the rules of conduct for both the insurance and insurer. Important conditions are
the payment of premium, providing proof of loss and accurate responses to application
questions.
✔✔Exclusions - ✔✔These list what perils are not covered. Exclusions tend to be those
things considered uninsurable.
✔✔Endorsements - ✔✔Endorsements modify (add or take away rights) the basic
contract.
✔✔Definitions - ✔✔This part of the contract explains the meaning of important terms
found in the contract, such as who is a named insured, who is an insured and what
constitutes a premises.
✔✔Insurance contract consists of: - ✔✔1. Declarations page, 2. Insuring Agreements,
3. Conditions, 4. Exclusions, 5. Endorsements, 6. Definitions
✔✔Unilateral Contract - ✔✔Can only be enforced by one party. Only insurance
company makes legally enforceable promise.
✔✔Adhesion - ✔✔Insurance contract and its wording are prepared by the insurer. The
applicant cannot bargain over that wording. Therefore, the contract is purchased as it is
worded and the insured is "stuck with" that wording.
✔✔Waiver - ✔✔A legal doctrine placed in writing that means the voluntary
abandonment of a right or advantage.
✔✔Estoppel - ✔✔One party to a contract may be estopped (stopped) by their past
words or actions from asserting a right granted to them in the contract. An estoppel
would be the legal consequences of a waiver.
✔✔Representations - ✔✔Statements in the application that are made with utmost good
faith, but they are not guaranteed to be accurate.
✔✔Warranties - ✔✔Statements guaranteed as to accuracy for both past and future
events.
✔✔Misrepresentation - ✔✔Simply, this is a lie regarding material information.
,✔✔Concealment - ✔✔Withholding of a material fact. Concealment is not an overt lie,
but a failure to state the entire truth.
✔✔Mono line Policy - ✔✔Provides property or liability insurance
✔✔Multi line Policy - ✔✔Provides both property and liability insurance.
✔✔Package - ✔✔Commercial Insurance only.
✔✔General Regulations of Insurance - ✔✔The purpose of the statutes and regulations
governing the conduct of the insurance industry is to promote and protect the public
welfare.
✔✔Commissioner of Insurance - ✔✔Chief regulatory body for the oversight of the
industry. The voters of this state elect the Commissioner of Insurance to a four-year
term of office as a member of the Council of State. If the office becomes vacant during
the Commissioner's term, the Governor shall appoint the replacement.
✔✔Commissioner of Insurance responsibilities - ✔✔1. Assure that insurance laws are
adhered to by all parties. The Commissioner or his/her Deputy has the power to issue
subpoenas and/or administer oaths. To assure adherence to the law, the Commissioner
may institute civil actions or criminal prosecutions through the Attorney General. 2.
Monitor the financial stability of admitted companies through the review of their annual
financial statements. 3. Provide assurances that companies and agents are competent
to conduct the business of insurance. 4. Regulate unfair trade and claims practices. 5.
Approve both rates and forms for insurance marketed in this State. The Department will
make available for public inspection the rates and deviations for residential and non-
fleet (personal) automobile coverage. 6. All examinations or investigations may be
conducted by the Commissioner personally or by someone appointed by the
Commissioner. Any examination and/or hearing must be preceded by at least 10 days
prior to written notice to all parties. 7. The Commissioner may suspend an agent's or
adjuster's license prior to a hearing if the Commissioner believes such action is
necessary to protect the publish health, safety or welfare. Revocation of authority can
only be done after a hearing or conviction in court of violating insurance laws.
✔✔Regulations Regarding Insurance Transactions - ✔✔1. Insurance company's,
agency's or agent's records are subject to inspection to determine compliance with the
law. The refusal to submit to an examination of records is also grounds for the
revocation or refusal of licensure. All records must be maintained for no less than 5
years. 2. All statements given on an applications are considered representations. 3. Any
deductible or cost-sharing amount between the named insured and insurer must be
expressed in the contract and no provision increasing this amount is allowed. Cost
sharing (coinsurance clauses) can be included in insurance contracts only if the policy
prominently displays the notice that the contract has a coinsurance clause. 4. It is
unlawful for an insurer to discriminate in the rates charged for automobile coverage on
,the basis of either age or sex. 5. When a proof of loss is required by an insurer, the
company must apply such a form within 15 days of receiving notification of the claim. If
not provided, the insured may submit the proof of loss with any written document that
provides the necessary information concerning the occurrence and the extent of the
loss. 6. It is unlawful for lending institutions to require the purchase of insurance through
the lending institution as a condition of making or renewing a loan. 7. Twisting involves
misrepresentation of a policy's terms and values to induce the lapse or replacement of
an existing contract of insurance. 8. A rebate is any valuable consideration not specified
in the contract, which is offered as an inducement to purchase insurance. 9. It is illegal
for an agent to charge money in excess of the premium for policy fee's or the
performance of services unless a prominent sign is posted in the business lobby, the
client provides prior written consent to each charge and a separate receipt is issued for
the payme
✔✔Twisting - ✔✔Involves the misrepresentation of a policy's terms and values to
induce the lapse or replacement of an existing contract of insurance. Such actions
would be to the detriment of the insured.
✔✔Rebate - ✔✔Any valuable consideration, not specified in the contract, which is
offered as an inducement to purchase insurance. It is illegal for any person to offer or
for any person to accept such an inducement.
✔✔Commingling - ✔✔The accounting records of agents shall be separate and apart
from any other business records and funds due to insurers and return premiums due to
policyholders must be available t all times.
✔✔Payment Receipts - ✔✔Issued by an agent should e dated and contain the name
and address of the agent and the name of the insurance company. The receipt should
also be signed by the person accepting the payment.
✔✔Agent, Adjuster or Insurer's Representative shall: - ✔✔A. Identify himself or herself
and his or her occupation; and B. Provide his or her National Producer Number and the
Department's website address and phone number for verification of licensure status
when requested to show proof of licensure.
✔✔Licensing Law (Resident Licensing) - ✔✔All persons wishing to solicit and/or
effectuate insurance coverage as an agent for an insurer must obtain an agent's
license. Such licenses are perpetual unless surrendered, terminated or revoked. Will
remain active provided they meet the continuing education requirements each 2 years.
Applicants must be at least 18 years old, trustworthy, financially responsible, have not
willfully violated any insurance law and reside in this state. Applicants must show
certification of having completed 20 hours of pre-licensing education for Life, Accident
and Health, Property, Casualty and Personal Lines insurance prior to taking the state
exam, unless exempt from requirements. Medicare Supplement/Long Term Care
supplemental licensure requires 10 hours of pre-licensing education.
, ✔✔Continuing Education Requirements - ✔✔Two years following the biennium in which
their license was issued based on the licensee's month and year of birth. 1. 24 hours of
continuing education are required for all lines of authority with three of 24 hours
covering ethics. 2. 3 Hours of CE on flood insurance every four years.
✔✔Change of Residency - ✔✔Must be communicated to the Commissioner within 10
business days.
✔✔Change of Name - ✔✔Must be communicated to the Commissioner within 30 days.
✔✔Appointment Cancellations - ✔✔Shall be communicated within 30 days.
✔✔Temporary License - ✔✔A temporary license is only good for 180 days.
✔✔Unfair Trade Practices Act - ✔✔The purpose of this act is to prohibit all practices
considered by this state as an unfair method of competition or deceptive practice. 1.
Misrepresentation or False Advertising of Policies, 2. Defamation, 3. Boycotting,
Coercion and Intimidation, 4. Filing false financial statements, 5. Unfair Discrimination
between individuals with similar exposures and hazards, 6. Rebating is any valuable
consideration, not specified in the contract, which is offered as an inducement to
purchase insurance, 7. Misuse of Confidential information.
✔✔Misrepresentation or False Advertising Policies - ✔✔A. Misrepresentation of benefits
(twisted), B. Misrepresentation of dividends, C. Misrepresentation of the financial
condition or reserves of the insurer, D. Names or titles of insurance policies that
misrepresent the true nature of the contract.
✔✔Defamation - ✔✔Circulation, by either oral or written means, of a false or derogatory
statement intended to injure another party.
✔✔Insurance Information and Privacy Protection Act - ✔✔Outlines procedures to be
used to protect the confidential nature of the information processed in the insurance
industry. However, this act does not apply to information collected from public records of
a governmental authority, such as the NC Dept. of Motor Vehicles.
✔✔Adverse Underwriting Decision - ✔✔1. An application for insurance has been
rejected, 2. An existing policy has been terminated, 3. Coverage has been placed with a
residual market mechanism. Failure to place coverage with a company requested by the
applicant and charging of a higher rate based on information that differs from that
supplied by the insured. However, charging higher premium due to an increase in
hazard is not considered to be an adverse underwriting decision.
✔✔Pretext Interviews - ✔✔Conducted when an individual does not reveal their identity
or they pose as someone else in order to obtain information.
