Webce Insurance test
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 - ANSknowing 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? - ANSa 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 - ANSestoppel
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? - ANS30 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? - ANS5 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 - ANSthey 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 - ANSimprisonment 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 -
ANSailing 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? - ANSJeff 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 - ANSfailing 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? - ANSStacy 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
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 - ANSknowing 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? - ANSa 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 - ANSestoppel
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? - ANS30 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? - ANS5 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 - ANSthey 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 - ANSimprisonment 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 -
ANSailing 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? - ANSJeff 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 - ANSfailing 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? - ANSStacy 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
