AD Banker Chapter 1 Exam 2025
Questions and Answers
Producer - ANSWER✔✔-Which of the following is considered field underwriter?
An admitted insurer - ANSWER✔✔-"Admitted" only means the insurer is authorized to
do business in this state. Admittance is not the same as domicile. Admitted insurers
might have domestic, foreign, or alien domicile.
The National Association of Insurance Commissioners (NAIC): - ANSWER✔✔-The
NAIC does not have legal authority over insurance regulation, but promotes uniformity
in the interpretation of insurance legislation and regulation.
Domicile - ANSWER✔✔-Domicile refers to the jurisdiction either state or country where
an insurer was formed or incorporated.
Which of the following statements is not correct regarding rates and premiums? -
ANSWER✔✔-Rates may not be excessive or unfairly discriminatory for any reason.
A producer must be ______ by an insurer in order to act as agent for that insurer. -
ANSWER✔✔-Appointed:
,An agent must have an appointment with an insurer in order to represent that insurer.
Licenses are granted by the state, not by insurance companies.
The Financial Privacy rule requires insurers to provide consumers with a privacy notice:
- ANSWER✔✔-At the time the consumer relationship is established and annually
thereafter:
The Financial Privacy rule requires insurers, to provide each consumer with a privacy
notice at the time the consumer relationship is established and annually thereafter.
Apparent authority is: - ANSWER✔✔-The demonstrated general appearance that
authority exist:
Apparent authority is the demonstrated appearance that authority exists. Example: A
producer using letterhead and business cards with the insurer's company logo is
demonstrating apparent authority.
A person who negotiates insurance contracts with insurers on behalf of an applicant is
known as a(n): - ANSWER✔✔-Broker:
, Agents/producers are deemed to be representatives of the insurer, while a broker is
deemed to be a representative of the applicant/insured.
Which of the following is NOT an essential element of an insurable risk? -
ANSWER✔✔-The loss must be intentional:
Intentional losses are excluded. The loss must be accidental.
The Fair Credit Reporting Act gives which of the following the legal right to review a
consumer report used to underwrite an applicant? - ANSWER✔✔-The applicant:
The applicant has the right to review the report.
Which of the following terms refers to the risk management technique of assuming the
responsibility for a loss? - ANSWER✔✔-Retention:
Risk retention involves assuming the responsibility for loss.
It is the _________ who issues a Certificate of Authority enabling an insurer to conduct
insurance business within a particular state. - ANSWER✔✔-State Insurance
Commissioner:
Questions and Answers
Producer - ANSWER✔✔-Which of the following is considered field underwriter?
An admitted insurer - ANSWER✔✔-"Admitted" only means the insurer is authorized to
do business in this state. Admittance is not the same as domicile. Admitted insurers
might have domestic, foreign, or alien domicile.
The National Association of Insurance Commissioners (NAIC): - ANSWER✔✔-The
NAIC does not have legal authority over insurance regulation, but promotes uniformity
in the interpretation of insurance legislation and regulation.
Domicile - ANSWER✔✔-Domicile refers to the jurisdiction either state or country where
an insurer was formed or incorporated.
Which of the following statements is not correct regarding rates and premiums? -
ANSWER✔✔-Rates may not be excessive or unfairly discriminatory for any reason.
A producer must be ______ by an insurer in order to act as agent for that insurer. -
ANSWER✔✔-Appointed:
,An agent must have an appointment with an insurer in order to represent that insurer.
Licenses are granted by the state, not by insurance companies.
The Financial Privacy rule requires insurers to provide consumers with a privacy notice:
- ANSWER✔✔-At the time the consumer relationship is established and annually
thereafter:
The Financial Privacy rule requires insurers, to provide each consumer with a privacy
notice at the time the consumer relationship is established and annually thereafter.
Apparent authority is: - ANSWER✔✔-The demonstrated general appearance that
authority exist:
Apparent authority is the demonstrated appearance that authority exists. Example: A
producer using letterhead and business cards with the insurer's company logo is
demonstrating apparent authority.
A person who negotiates insurance contracts with insurers on behalf of an applicant is
known as a(n): - ANSWER✔✔-Broker:
, Agents/producers are deemed to be representatives of the insurer, while a broker is
deemed to be a representative of the applicant/insured.
Which of the following is NOT an essential element of an insurable risk? -
ANSWER✔✔-The loss must be intentional:
Intentional losses are excluded. The loss must be accidental.
The Fair Credit Reporting Act gives which of the following the legal right to review a
consumer report used to underwrite an applicant? - ANSWER✔✔-The applicant:
The applicant has the right to review the report.
Which of the following terms refers to the risk management technique of assuming the
responsibility for a loss? - ANSWER✔✔-Retention:
Risk retention involves assuming the responsibility for loss.
It is the _________ who issues a Certificate of Authority enabling an insurer to conduct
insurance business within a particular state. - ANSWER✔✔-State Insurance
Commissioner:
