20-44 Personal Lines Agent UPDATED
ACTUAL Exam Questions and CORRECT
Answers
Chief Financial Officer - CORRECT ANSWER - Is the head of the Department of
Financial Services (DFS).
The Commissioner of Insurance - CORRECT ANSWER - An appointed official, answers
to the CFO.
DFS - CORRECT ANSWER - Approves issue of licenses to agents, regulates insurance
claims, investigates allegations of ethics violations, and administers justice within the domain of
insurance.
The Commissioner of Insurance is in charge of - CORRECT ANSWER - the Office of
Insurance Regulation (OIR).
Office of Insurance Regulation (OIR). - CORRECT ANSWER - is in charge of examining
insurance company financials (books and records), and approving companies to do business in
the state.
Persons Required to be Licensed - CORRECT ANSWER - Anyone who solicits or advises
on insurance in Florida must be licensed. See FS 624.425 (specifying that companies can not sell
except through a Florida agent) and 626.112 (specifying that individuals may only solicit
insurance if they are licensed and appointed by a company).
Appointments - CORRECT ANSWER - Agents are appointed by insurance carriers, which
is to say they are authorized by a carrier to write insurance policies "on company paper." Agents
who have binding authority and do not need approval from a company employee to secure
coverage are said to "have the pen" with that company. That is, their signature binds the
company to a contract.
, Customer Representatives - CORRECT ANSWER - people with the 4-40 license
4-40 license - CORRECT ANSWER - are only allowed to transact insurance inside the
office, supervised by a 2-20 General Lines Agent. A General Lines Agent or a Surplus Lines
Agent must appoint and supervise the Customer Representative. Paying a commission or a
performance incentive/bonus to a 4-40 can result in license suspensions, fines, and/or loss of
agency license. It has been a common problem in the industry and should be treated with care.
Ethics - CORRECT ANSWER - Ethics essentially means "doing the right thing." Agents
are in a position of trust, both in reference to the companies they represent and to the customers
they advise. Any violation of that trust to serve the agent's own interest is a breach of ethics.
Wind Mitigation - CORRECT ANSWER - Premium discounts are available for wind
mitigation measures
Secondary Water Resistance - CORRECT ANSWER - Refers to tape or sealant that
prevents water from entering cracks between pieces of roof deck (the plywood or other material
under the shingles). This can be helpful when shingles or tiles blow off.
Misrepresentation - CORRECT ANSWER - Lying or deceiving a person about any of the
benefits terms or conditions of an insurance contract.
Sliding - CORRECT ANSWER - Telling the insured that an optional coverage is either
required by law or included in the policy at no charge. It also means adding a coverage to a
policy without disclosing the coverage was added for additional premium.
Defamation - CORRECT ANSWER - Saying bad or mean things about people.
Coercion - CORRECT ANSWER - Finding ways to force the public to do business with
you instead of other people.
ACTUAL Exam Questions and CORRECT
Answers
Chief Financial Officer - CORRECT ANSWER - Is the head of the Department of
Financial Services (DFS).
The Commissioner of Insurance - CORRECT ANSWER - An appointed official, answers
to the CFO.
DFS - CORRECT ANSWER - Approves issue of licenses to agents, regulates insurance
claims, investigates allegations of ethics violations, and administers justice within the domain of
insurance.
The Commissioner of Insurance is in charge of - CORRECT ANSWER - the Office of
Insurance Regulation (OIR).
Office of Insurance Regulation (OIR). - CORRECT ANSWER - is in charge of examining
insurance company financials (books and records), and approving companies to do business in
the state.
Persons Required to be Licensed - CORRECT ANSWER - Anyone who solicits or advises
on insurance in Florida must be licensed. See FS 624.425 (specifying that companies can not sell
except through a Florida agent) and 626.112 (specifying that individuals may only solicit
insurance if they are licensed and appointed by a company).
Appointments - CORRECT ANSWER - Agents are appointed by insurance carriers, which
is to say they are authorized by a carrier to write insurance policies "on company paper." Agents
who have binding authority and do not need approval from a company employee to secure
coverage are said to "have the pen" with that company. That is, their signature binds the
company to a contract.
, Customer Representatives - CORRECT ANSWER - people with the 4-40 license
4-40 license - CORRECT ANSWER - are only allowed to transact insurance inside the
office, supervised by a 2-20 General Lines Agent. A General Lines Agent or a Surplus Lines
Agent must appoint and supervise the Customer Representative. Paying a commission or a
performance incentive/bonus to a 4-40 can result in license suspensions, fines, and/or loss of
agency license. It has been a common problem in the industry and should be treated with care.
Ethics - CORRECT ANSWER - Ethics essentially means "doing the right thing." Agents
are in a position of trust, both in reference to the companies they represent and to the customers
they advise. Any violation of that trust to serve the agent's own interest is a breach of ethics.
Wind Mitigation - CORRECT ANSWER - Premium discounts are available for wind
mitigation measures
Secondary Water Resistance - CORRECT ANSWER - Refers to tape or sealant that
prevents water from entering cracks between pieces of roof deck (the plywood or other material
under the shingles). This can be helpful when shingles or tiles blow off.
Misrepresentation - CORRECT ANSWER - Lying or deceiving a person about any of the
benefits terms or conditions of an insurance contract.
Sliding - CORRECT ANSWER - Telling the insured that an optional coverage is either
required by law or included in the policy at no charge. It also means adding a coverage to a
policy without disclosing the coverage was added for additional premium.
Defamation - CORRECT ANSWER - Saying bad or mean things about people.
Coercion - CORRECT ANSWER - Finding ways to force the public to do business with
you instead of other people.
