Property & Casualty License Practice Exam With Absolute Solution 2023

Property & Casualty License Practice Exam with Absolute Solution 2023 An exclusion that states that an insurer will not pay any claim in which an individuals property is damaged as a result of an earthquake, mudslide, landslide, or sinkhole. - an Earth movement exclusion An exclusion that states that an insurer will not pay any claim in which an individuals property is damaged as a result of the fact that the individual did not maintain the property. - Neglect exclusion Which Home Owner's form covers damage to a condo owner's PROPERTY that occurs as the result of any event that is not specifically excluded in the policy. - HO-6 Unit Owner's Form Which Home Owner's form covers damage to a TENANT'S property that occurs as a result of an aircraft, civil commotion, explosion, fire, nail, lightning, smoke, theft, vandalism, vehicles and/or wind. - HO-4 Content's Broad Form Which HO form covers damage to the DWELLING that occurs as the result of any event that is not specifically excluded in the policy and damage to the property inside the dwelling that results of an aircraft, civil commotion, explosion, fire, hail, lightning, smoke, theft, vandalism, vehicles, and/or wind. - HO-3 Special Form Which HO Form covers damage to the DWELLING & PROPERTY inside the dwelling that occurs as an result of any event that is not specifically excluded in the policy. - HO - 5 Comprehensive Form What means conducting business in accordance with current rules and laws set by government regulatory agencies and the courts. - Compliance Standards of conduct and moral judgement. - Ethics Legal term that describes the relationship between parties. - Agency What is the term to describe how an insurer appoints an individual to act on its behalf. - Agency Contract An individual whose position and responsibilities involve a high degree of trust and confidence (trustees, guardians, and executors). - Fiduciary The name for the fact a producer must sell the kind of policies that best fit the prospects needs and in amounts that the prospects can afford. - Needs Selling What is given when the applicant pays the initial premium at the time the application for a policy is signed. - Conditional Receipt What is the term for informing the prospect or client of all facts involving a specific policy or plan so that an informed decision can be made. - Full Disclosure What is the name for the watchdog group whose member companies agree to adhere to and enforce ethical principles. - Insurance Standards Association (IMSA) What Act deals with the inappropriate use of advertising. - Unfair Trade Practices Act Any written or oral statement that does not accurately describe a policy's features, benefits, or coverage. - Misrepresentation Any false, maliciously, critical or derogatory communication that injures another's reputation, fame, or character. - Defamation What is the term if the buyer of an insurance policy receives any part of the producers commission or anything else of significant values as an inducement to purchase a policy. - Rebating The unethical act of persuading a policy owner to drop a policy solely for the purpose of selling another policy without regard to the possible disadvantages to the policy owner. - Twisting. A resident producers license must meet what 2 requirements? - 1.) May either reside in PA -or- 2.) Have their principal place of business in PA In what 2 situations is it not required to be a licensed as a manager or exclusive general agent? - 1.) The licensee who has limited underwriting authority - or- 2.) A manager or agent who has started before Dec. 22, 1965 Which of the following can not be issued a temp license? - A person selling insurance for the estate of a deceased producer. Which is NOT a reason for a licensed to be suspended or revoked? a.) Making factual by subjective comparisons of 2 policies. b.) Intentionally violating a cease and desist order. c.) Making false statements in a license application. d.) Violating an insurance regulation. - A. Increases a chance for loss - Hazard (i.e. leaving a door unlocked) Chance of a loss - Risk A means of transferring the risk of loss - Insurance The cause of the loss - Perils (i.e. Fire, Flood, Collision, Theft) States that there must be an adequate spread of risk for insurance to be effective. - Law of Large #s Installing an automatic sprinkler system is an example of - Reduction (can not avoid risk but can reduce it) Deciding not to produce a produce due to serious potential side effects. - Avoidance (avoid the risk of being sued) Person in good health cancels health insurance policy...What is risk management - Retention (retaining the risk) Under what regulation in PA does it state that insurers must maintain a specific minimum levels of capital stock and surplus? - Regulation of Insurer Solvency. Who regulates insurance rates to avoid excessive, inadequate, or unfairly discriminatory rates? - Casualty & Surety Rate Regulatory Act Who must an insurer notify when they terminate a producer's appointment? - The Commissioner and producer. Which of the following is not a power and duty of the insurance commissioner? - Issuing a cease and desist order, prosecuting producers who violate state insurance laws, conducting complaint hearings, appointing examiners. What unfair practices is when a producer offers, promises, allows, gives, sets off, or pays a rebate on the contract of insurance. - Rebating What unfair insurance practice is the purchase of insurance from a financial institution or from a designated insurer or producer as a condition of any loan or deposited transaction. - Tie-In Sales Non-public personal financial information about individuals. - Privacy of Consumer's Financial information Term for instruction by the consumer to the licensee no to disclose non-public personal financial information about the consumer to a non-affiliated third party. - opt-out When a producer shares a commission with an unlicensed person. - If a license was held at a time of sale; Referring a person can receive a one time nominal set fee When a personal fire insurance policy is cancelled because the insured's acts increased the hazard insured against, how many days notice must be provided to the insured. - 30 days When a auto policy is cancelled for a reason other than non-payment of premium, how many days notice must be provided to the insured? - 30 days If an insured's drivers license has been suspended, the insurer may cancel the auto insurance policy by giving how many days notice? - 15 days What are the minimum limits of liability any individual must provide for bodily injury and property damage? - 15/30/5 $15,000 per person bodily injury $30,000 per accident for bodily injury $5,000 per accident for property damage Purchased in the normal of standard market. - PA Fair Plan Act After an accident, what is the waiting period before the insured can apply for income loss benefits? - 5 working days What must occur in order to pay for funeral expenses? - Death within 24 hours of accident An insurer must notify an insured at least how many days before increasing the premium on a commercial casualty insurance policy. - 30 days Which agency provides motor vehicle coverage insurance to those who would be otherwise un-insurable? - PA Auto Assigned Risk Plan When an employer must provide worker's compensation insurance but is unable to do so through normal channels, which organization can provide the required coverage? - State Worker's Insurance Fund What term describes a producer who converts premiums for his own use? - Breach of Fiduciary Duty What insurance option lets the insured seek recovery for all medical and other out-of-pocket damages, pain & suffering, and other non-monetary damages as a result of injuries caused by other drivers? - Full Tort Option What percent can crops be insured of their expected value? - 75% A car crashes into a storage container which holds industrial waste materials located at a factory. As a result, a large amount of industrial waste ends up being released onto the property. The cost to clean up the waste totals $23,000. If the owner of the factory has a commercial property policy with additional coverage for pollutant clean-up and removal, how much does the insurance policy pay out to insured? - $10,000 Coverage E of a homeowners policy deals with which of the following? - Personal Liability How much does a Personal Injury endorsement attached to a homeowners policy add in loss assessment coverage for the named personal injury offenses? - $1000 The insolvency of an insurer is one reason why a normally insured individual involved in a car accident will be considered to be... - an uninsured motorist