Maryland Property & Casualty Insurance Practice Questions with Certified Solutions

Maryland Property & Casualty Insurance Practice Questions with Certified Solutions A broker requests a hearing with the Commissioner. Within how many days of the request must the hearing be held? 30 Collision coverage extends to rented passenger vehicles that have been rented for No more than 30 days. Every vehicle insurance policy issued and delivered in Maryland must provide coverage for medical, hospital and disability benefits, unless Waived by the first named insured. When an insurer desires to cancel or non-renew a property insurance policy, they must give advance written notice of 45 days. What is the maximum amount of a deductible on collision coverage for a damage to the insured auto in an auto insurance policy? $250 An agent just received his Maryland LifeHealth insurance license. His specialty is selling long-term care policies. In order to satisfy his continuing education requirement, he must do which of the following? Complete 24 hours of continuing education, including 2 hours of long-term care education, and 3 hours of ethics, every two years. All of the following are true regarding rebates EXCEPT Rebates are allowed if it's in the best interest of the client. An insurance producer is required to notify the Commissioner of any felony convictions within how many days of the conviction? 30 days. Public adjusters represent Insureds PIP (personal injury protection) provides coverage for injury to the named insured, resident relatives and Pedestrians struck by the insured vehicle. The Property and Casualty Guaranty Corporation is obligated to pay the full amount of any claim between $100 and $300,000 if the claim occurs within what period of time? 30 days after an insurer has been declared insolvent and before the insurance policy has expired An insurer or producer may NOT knowingly employ an individual to act in a fiduciary capacity if that individual has been convicted of a felony or crime of moral turpitude within the past 10 years only. Which of the following is an example of a producer's fiduciary responsibilities? A producer promptly forwarding premiums to the insurance company All of the following would be considered an insurance transaction EXCEPT Obtaining an insurance license. Which of the following would be considered false advertising? Implying that the agent is the insurer Before a producer can receive authority to place business with MAIF, the producer must comply with the following actions, EXCEPT Pay a $500 initiation fee After a client leaves his office, an agent makes corrections to the client's application, but forgets to tell her. Two weeks later, the client is in an accident. The insurer will be settling the claim based on the corrected form. This is A violation of the Insurance Code. Your property policy will be due for renewal soon. When should you expect to receive notice of renewal premium from your insurer? 45 Which of the following would NOT be considered a flood? Sewer backup Binders cease at the earliest of Any of the above. A business entity must meet all of the following qualifications EXCEPT Have a board of directors. In Maryland, binders are issued for a short period of time. A binder will cease to exist in each of the following situations EXCEPT 60 days following the issue date of the binder. Public adjusters are compensated by Insureds During a sales presentation a producer intentionally makes a statement which may mislead the insurance applicant. This describes Misrepresentation Which of the following authorities can legally suspend a license? The Insurance Commissioner If an individual is unable to purchase auto liability insurance from private insurers, which of the following may provide coverage? The Maryland Auto Insurance Fund (MAIF) Insurance companies in Maryland must submit forms to the Insurance Commissioner in duplicate. What is the one exception to this rule? If the forms are filed electronically A repair facility used after-market parts in the repair of a customer's automobile, and did not notify the customer of this. Which of the following is true? The repair facility has engaged in an unfair trade practice. What is a premium finance company? A premium finance company advances the premiums for clients in a lump sum, and in return, the client pays in monthly installments along with interest. When a surety insurer terminates the appointment of a surety agent, it must notify the Commissioner and the Chief Clerk of the District Court of Maryland of the termination Immediately Kristin wishes to become an insurance producer in Maryland. In order to do so, she must do all of the following EXCEPT Have a college education. Paul is a producer in Vermont and wants to become a producer in Maryland. The Department will waive certain examination requirements, provided that Vermont would waive these same requirements if a Maryland producer sought licensure in Vermont. What term is used to describe this phenomenon? Reciprocity Employers Liability limits are split limits. The first limit shown is the most the insurer will pay for all claims for Injury by accident. An insurer in Maryland is going to begin using new rates for the largest corporation in Maryland. Which of the following statements apply to this situation? Any of the above can be true. Surplus lines brokers are required to post a surety bond with the Commissioner of insurance in an amount of at least $10,000. Which of the following is true regarding a cancellation notice for a workers' compensation policy? It must include the effective date of cancellation. The Department of Insurance requires a license for anyone engaged in insurance transactions so they can have control over Those selling insurance or advising the public. Surety agents must maintain records of all bail bonds executed. These records must be made available for inspection by the Commissioner for at least 1 year after termination of the surety liability. Which of the following would be covered by the Property and Casualty Insurance Guaranty Corporation? An individual claim for $100,000 How many continuing education requirements must be met with a two-year period? 24 What program must a property and casualty insurer be engaged in to be able to sell flood insurance in Maryland? WYO How often must the Commissioner examine domestic insurers? Once every 5 years Which of the following would authorize the commingling of premiums with the agent's personal funds? A letter of consent from the principal Willful violations of insurance laws of this state are considered Misdemeanors. Which of the following statements is correct regarding a Public Adjuster? A Public Adjuster does not include a person that appraises claims for loss covered by a motor vehicle policy. If an insurer charges a different premium rate and limits coverage for an applicant based on partial blindness, the insurer may be found guilty of Unfair discrimination. The Maryland Automobile Insurance Fund was organized to provide automobile insurance to those eligible persons who are unable to obtain it in the private market. All of the following person would be eligible to apply for coverage in the Fund, EXCEPT A resident of Maryland is licensed through another state's Motor Vehicle Administration. If an insurer nonrenews a property policy because of the risks associated with the geographic area of the policy, the Commissioner must be notified at least how many days before the nonrenewal? 60 days Which of the following is an example of a producer being involved in an unfair trade practice of rebating? The Insurance Guaranty Corporation. What is the license renewal period in this state? 2 years All of the following are EXCLUDED by PIP coverage EXCEPT The insured is injured after being rear ended while sitting at a red light. Who must approve rate changes for non-competitive types of insurance? The Commissioner Which of the following best describes the unfair trade practice of defamation? Making derogatory oral statements about another insurer's financial condition Binders can be issued for a period not to exceed 45 days. J is applying for his producer license. He took his written examination on March 1st, but failed it. When is the earliest J will be able to take the examination again? March 15th All of the following are true of the insurers' obligations to the insured regarding renewal premium EXCEPT The insurer must provide notice of renewal premium due at least 10 days prior to the due date. State law specifically prohibits using illegal inducements in the marketing of insurance. All of the following would be considered illegal inducements EXCEPT Inviting prospective clients to the grand opening of the company's new office. A manufacturing company had five of its employees claim lung disease from a compound used in the manufacture of their products. Each employee sued the company for $200,000. What is the maximum the Employers Liability policy will pay for all claims? $500,000 Who do public adjusters represent? Insureds If an insurer decides to nonrenew a policy, the insured must be notified by mail at least 45 days in advance. Surplus lines brokers are required to post a surety bond with the Commissioner of insurance in an amount of at least $10,000. In Maryland, binders are issued for a short period of time. A binder will cease to exist in each of the following situations EXCEPT 60 days following the issue date of the binder. If a licensee intentionally violates the Insurance Code, what is the maximum monetary penalty that he or she would be required to pay? $100,000 Mr. E wants to become an insurance advisor. His hiring manager informs him that he must post a single security bond to quality. How much money must Mr. E post? $1,000 An employer may satisfy the requirement of providing workers compensation insurance on their employees by all of the following methods, EXCEPT The Monopolistic State Fund. A repair facility used after-market parts in the repair of a customer's automobile, and did not notify the customer of this. Which of the following is true? The repair facility has engaged in an unfair trade practice. What is the maximum amount of a deductible on collision coverage for a damage to the insured auto in an auto insurance policy? $250 Which of the following people would receive a commission from the sale of a policy? The agent who took the client's application Paul is a producer in Vermont and wants to become a producer in Maryland. The Department will waive certain examination requirements, provided that Vermont would waive these same requirements if a Maryland producer sought licensure in Vermont. What term is used to describe this phenomenon? Reciprocity Which of the following is NOT a step an insurer must take when cancelling or nonrenewing lead liability insurance coverage? Contract with an approved lead paint remediation specialist to remove the exposure Circulating deceptive sales material to the public is what type of Unfair Trade Practice? False advertising Randy has taken 5 more continuing education credit hours than he will need for this reporting period. How many of these hours can be transferred to the next reporting period? 0 The entity that pays covered claims and helps prevent financial losses to claimants and policyowners when an insurance company becomes insolvent is The Insurance Guaranty Corporation. If a man receives a binder for property insurance today, what is the maximum amount of time that the binder could be effective? 45 days An applicant for an insurance license has failed his written examination. How many days must he wait before we can take another examination? 14 days An insurer in Maryland is going to begin using new rates for the largest corporation in Maryland. Which of the following statements apply to this situation? Any of the above can be true. Which of the following is NOT required for license reinstatement? Licensing examination results