WEBCE FINAL EXAM LATEST 2024/2025 QUESTIONS AND
ANSWERS WITH RATIONALES (VERIFIED ANSWERS)
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 - CORRECT ANSWER 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? - CORRECT ANSWER 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 - CORRECT ANSWER 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? - CORRECT ANSWER 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? - CORRECT ANSWER 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 - CORRECT ANSWER 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 - CORRECT ANSWER 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 - CORRECT ANSWER 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? -
CORRECT ANSWER 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 - CORRECT ANSWER 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? - CORRECT ANSWER 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 - CORRECT ANSWER rebating
ANSWERS WITH RATIONALES (VERIFIED ANSWERS)
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 - CORRECT ANSWER 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? - CORRECT ANSWER 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 - CORRECT ANSWER 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? - CORRECT ANSWER 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? - CORRECT ANSWER 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 - CORRECT ANSWER 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 - CORRECT ANSWER 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 - CORRECT ANSWER 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? -
CORRECT ANSWER 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 - CORRECT ANSWER 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? - CORRECT ANSWER 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 - CORRECT ANSWER rebating
