NEW JERSEY ACCIDENT & HEALTH INSURANCE
PRODUCER LICENSE EXAM: 200 FRESH PRACTICE
QUESTIONS WITH CORRECT ANSWERS AND DETAILED
RATIONALES (2026–2027 EDITION — EXAM B)
Part 1: New Jersey Regulatory Framework & DOBI Authority
(Questions 1–30)
1. Which entity appoints the Commissioner of the New Jersey
Department of Banking and Insurance (DOBI)?
A. The state legislature
B. The Governor, with the advice and consent of the Senate
C. The voters
D. The insurance industry
Answer: B. The Governor appoints the Commissioner of DOBI with
the advice and consent of the Senate.
2. What is the maximum penalty for a first violation of New Jersey
insurance regulations?
A. $1,000
B. $5,000
C. $10,000
D. $25,000
Answer: B. The maximum penalty for a first violation is $5,000.
3. What is the maximum penalty for each subsequent violation of
New Jersey insurance regulations?
A. $5,000
B. $10,000
C. $15,000
, D. $20,000
Answer: B. The penalty increases to a maximum of $10,000 for each
subsequent violation.
4. When must notice of a hearing be delivered to a person or entity
under investigation by DOBI?
A. At least 5 days after the notice is delivered
B. At least 10 days after the notice is delivered
C. At least 30 days after the notice is delivered
D. No notice is required
Answer: B. The notice of hearing must be delivered at least 10 days
after the notice is delivered.
5. What happens to an insurer’s Certificate of Authority if the
insurer becomes insolvent?
A. It is automatically renewed
B. It is transferred to another insurer
C. The Commissioner will suspend it
D. It remains in effect indefinitely
Answer: C. The Commissioner will suspend the Certificate of
Authority of an insolvent insurer.
6. What is a “Certificate of Authority” in New Jersey insurance law?
A. A producer’s license
B. A document allowing an insurer to transact business in New Jersey
C. A policyholder’s certificate of coverage
D. A CE completion certificate
Answer: B. A Certificate of Authority allows an insurer to transact
business in New Jersey.
7. What is “reinsurance”?
A. When an insurer buys insurance for itself from another insurer
B. When a producer reinsures a client
C. When a policyholder cancels coverage
, D. When the state guarantees coverage
Answer: A. Reinsurance is when an insurer buys insurance for itself
from another insurer to transfer risk.
8. What is “retrocession”?
A. When a policyholder cancels a policy
B. When a reinsurer transfers part of its risk to another reinsurance
company
C. When a producer returns commissions
D. When an insurer withdraws from the market
Answer: B. Retrocession occurs when a reinsurer transfers part of its
risk to another reinsurance company.
9. A business entity acting as an insurance producer in New Jersey
must:
A. Employ only licensed producers
B. Be licensed in New Jersey
C. Have a physical office in the state
D. Post a surety bond
Answer: B. A business entity acting as an insurance producer must be
licensed in New Jersey.
10. How long is a temporary insurance producer license valid in
New Jersey?
A. 30 days
B. 90 days
C. 180 days
D. 1 year
Answer: C. A temporary license in New Jersey is valid for 180 days.
11. What is required to reinstate a lapsed New Jersey producer
license?
A. Only pay a fee
, B. Submit a reinstatement application, late renewal fee, and proof of
CE completion
C. Retake the licensing exam
D. Complete a new pre-licensing course
Answer: B. Reinstatement requires an application, late fee, and proof
of continuing education completion.
12. What must an insurance consultant do before receiving fees
from a prospect?
A. Obtain a verbal agreement
B. Obtain a signed written memorandum stating the amount of
compensation
C. Notify DOBI
D. Post a bond
Answer: B. An insurance consultant must obtain a signed written
memorandum stating the compensation amount before receiving
fees.
13. Which of the following may NOT be used in a health
insurance advertisement in New Jersey?
A. The insurer’s actual name
B. An insurance company’s trademark instead of the company’s actual
name
C. A description of policy benefits
D. A disclosure of policy limitations
Answer: B. Using an insurance company’s trademark instead of the
company’s actual name is a prohibited advertising practice.
14. When an insurer is replacing existing group health
coverage, the replacing insurer is required to:
A. Reject all individuals with pre-existing conditions
B. Accept all individuals eligible under the previous plan
C. Require a new waiting period
PRODUCER LICENSE EXAM: 200 FRESH PRACTICE
QUESTIONS WITH CORRECT ANSWERS AND DETAILED
RATIONALES (2026–2027 EDITION — EXAM B)
Part 1: New Jersey Regulatory Framework & DOBI Authority
(Questions 1–30)
1. Which entity appoints the Commissioner of the New Jersey
Department of Banking and Insurance (DOBI)?
A. The state legislature
B. The Governor, with the advice and consent of the Senate
C. The voters
D. The insurance industry
Answer: B. The Governor appoints the Commissioner of DOBI with
the advice and consent of the Senate.
2. What is the maximum penalty for a first violation of New Jersey
insurance regulations?
A. $1,000
B. $5,000
C. $10,000
D. $25,000
Answer: B. The maximum penalty for a first violation is $5,000.
3. What is the maximum penalty for each subsequent violation of
New Jersey insurance regulations?
A. $5,000
B. $10,000
C. $15,000
, D. $20,000
Answer: B. The penalty increases to a maximum of $10,000 for each
subsequent violation.
4. When must notice of a hearing be delivered to a person or entity
under investigation by DOBI?
A. At least 5 days after the notice is delivered
B. At least 10 days after the notice is delivered
C. At least 30 days after the notice is delivered
D. No notice is required
Answer: B. The notice of hearing must be delivered at least 10 days
after the notice is delivered.
5. What happens to an insurer’s Certificate of Authority if the
insurer becomes insolvent?
A. It is automatically renewed
B. It is transferred to another insurer
C. The Commissioner will suspend it
D. It remains in effect indefinitely
Answer: C. The Commissioner will suspend the Certificate of
Authority of an insolvent insurer.
6. What is a “Certificate of Authority” in New Jersey insurance law?
A. A producer’s license
B. A document allowing an insurer to transact business in New Jersey
C. A policyholder’s certificate of coverage
D. A CE completion certificate
Answer: B. A Certificate of Authority allows an insurer to transact
business in New Jersey.
7. What is “reinsurance”?
A. When an insurer buys insurance for itself from another insurer
B. When a producer reinsures a client
C. When a policyholder cancels coverage
, D. When the state guarantees coverage
Answer: A. Reinsurance is when an insurer buys insurance for itself
from another insurer to transfer risk.
8. What is “retrocession”?
A. When a policyholder cancels a policy
B. When a reinsurer transfers part of its risk to another reinsurance
company
C. When a producer returns commissions
D. When an insurer withdraws from the market
Answer: B. Retrocession occurs when a reinsurer transfers part of its
risk to another reinsurance company.
9. A business entity acting as an insurance producer in New Jersey
must:
A. Employ only licensed producers
B. Be licensed in New Jersey
C. Have a physical office in the state
D. Post a surety bond
Answer: B. A business entity acting as an insurance producer must be
licensed in New Jersey.
10. How long is a temporary insurance producer license valid in
New Jersey?
A. 30 days
B. 90 days
C. 180 days
D. 1 year
Answer: C. A temporary license in New Jersey is valid for 180 days.
11. What is required to reinstate a lapsed New Jersey producer
license?
A. Only pay a fee
, B. Submit a reinstatement application, late renewal fee, and proof of
CE completion
C. Retake the licensing exam
D. Complete a new pre-licensing course
Answer: B. Reinstatement requires an application, late fee, and proof
of continuing education completion.
12. What must an insurance consultant do before receiving fees
from a prospect?
A. Obtain a verbal agreement
B. Obtain a signed written memorandum stating the amount of
compensation
C. Notify DOBI
D. Post a bond
Answer: B. An insurance consultant must obtain a signed written
memorandum stating the compensation amount before receiving
fees.
13. Which of the following may NOT be used in a health
insurance advertisement in New Jersey?
A. The insurer’s actual name
B. An insurance company’s trademark instead of the company’s actual
name
C. A description of policy benefits
D. A disclosure of policy limitations
Answer: B. Using an insurance company’s trademark instead of the
company’s actual name is a prohibited advertising practice.
14. When an insurer is replacing existing group health
coverage, the replacing insurer is required to:
A. Reject all individuals with pre-existing conditions
B. Accept all individuals eligible under the previous plan
C. Require a new waiting period
