WEBCE Practice Questions and Answers 2022
with complete solution
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 - -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 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? - -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 - -estoppel
-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? - -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? - -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?
-acceptable marketing and underwriting practices
-unfair and prohibited business practices
-insurance fraud
-false advertising - -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 - -imprisonment is not a punishment for committing an
unfair method of competition
you cannot be arrested for committing an unfair method of competition
-which of the following is NOT an unfair claims settlement practice if
committed by an insurance company in PA?
-failing to promptly acknowledge communications about claims
-failing to promptly settle a claim for which liability is uncertain
-appealing from an arbitration award in favor of an insured to compel the
insured to accept a lower settlement
-failing to affirm or deny coverage within a reasonable time after completing
a claim investigation - -ailing to promptly settle a claim for which liability is
uncertain is NOT an unfair claims settlement practice
-Jeff is a licensed insurance producer in both PA and NY. he is charged with
embezzlement in NY, and his first pretrial hearing is set for March 1. He must
notify the PA commissioner of insurance within how many days of this
hearing? - -Jeff has 30 days to notify the PA commissioner of insurance of
the disciplinary action being taken against him
, -which of the following is NOT an unfair claims settlement practice if
committed by an insurance company in PA?
-failing to promptly acknowledge communications about claims
-failing to promptly settle a claim for which liability is uncertain
-offering to settle claims for less than due to encourage litigation
-raising policy defenses to reduce a claim - -failing to promptly settle a claim
for which liability is uncertain is not an unfair claims settlement practice
-Stacy is a captive agent for best rates insurance company. Her agency
contract gives her permission to print and use business cards with the
company's logo and submit applications for its policy. What type of authority
does stacy have to take these actions? - -Stacy has express authority due to
the contract between her and the insurance company specifically allowing
her act in such a way
-to boost her sales at the end of the year, agent Trudy started offering
potential clients a $250 cash gift card in exchange for purchasing a life
insurance policy. which ethical sales practice has she violated?
-twisting
-churning
-rebating
-false information - -rebating
its illegal to offer gifts in exchange for the purchase of an insurance policy
-which of the following is not a power granted to the PA commissioner of
insurance?
-licensing producers and companies
-enforcing insurance laws
-issuing regulations to administer insurance laws
-prosecuting individuals for violating insurance laws - -the PA commissioner
of insurance CANNOT prosecute individuals for violating insurance laws
-which is not necessary to create a legal contract?
-consideration
-offer
-warranty
-acceptance - -warranty is not necessary to create a legal contract
-the federal risk retention act of 1986 applies to which business?
-self-insuring business
with complete solution
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 - -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 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? - -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 - -estoppel
-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? - -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? - -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?
-acceptable marketing and underwriting practices
-unfair and prohibited business practices
-insurance fraud
-false advertising - -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 - -imprisonment is not a punishment for committing an
unfair method of competition
you cannot be arrested for committing an unfair method of competition
-which of the following is NOT an unfair claims settlement practice if
committed by an insurance company in PA?
-failing to promptly acknowledge communications about claims
-failing to promptly settle a claim for which liability is uncertain
-appealing from an arbitration award in favor of an insured to compel the
insured to accept a lower settlement
-failing to affirm or deny coverage within a reasonable time after completing
a claim investigation - -ailing to promptly settle a claim for which liability is
uncertain is NOT an unfair claims settlement practice
-Jeff is a licensed insurance producer in both PA and NY. he is charged with
embezzlement in NY, and his first pretrial hearing is set for March 1. He must
notify the PA commissioner of insurance within how many days of this
hearing? - -Jeff has 30 days to notify the PA commissioner of insurance of
the disciplinary action being taken against him
, -which of the following is NOT an unfair claims settlement practice if
committed by an insurance company in PA?
-failing to promptly acknowledge communications about claims
-failing to promptly settle a claim for which liability is uncertain
-offering to settle claims for less than due to encourage litigation
-raising policy defenses to reduce a claim - -failing to promptly settle a claim
for which liability is uncertain is not an unfair claims settlement practice
-Stacy is a captive agent for best rates insurance company. Her agency
contract gives her permission to print and use business cards with the
company's logo and submit applications for its policy. What type of authority
does stacy have to take these actions? - -Stacy has express authority due to
the contract between her and the insurance company specifically allowing
her act in such a way
-to boost her sales at the end of the year, agent Trudy started offering
potential clients a $250 cash gift card in exchange for purchasing a life
insurance policy. which ethical sales practice has she violated?
-twisting
-churning
-rebating
-false information - -rebating
its illegal to offer gifts in exchange for the purchase of an insurance policy
-which of the following is not a power granted to the PA commissioner of
insurance?
-licensing producers and companies
-enforcing insurance laws
-issuing regulations to administer insurance laws
-prosecuting individuals for violating insurance laws - -the PA commissioner
of insurance CANNOT prosecute individuals for violating insurance laws
-which is not necessary to create a legal contract?
-consideration
-offer
-warranty
-acceptance - -warranty is not necessary to create a legal contract
-the federal risk retention act of 1986 applies to which business?
-self-insuring business
