Montana Property and Casualty Laws
UPDATED ACTUAL Exam Questions and
CORRECT Answers
What are premium finance companies? - CORRECT ANSWER - Loans money to the
insured to pay a premium, and must be licensed as a premium finance company. (Does not apply
to savings & loans, finance companies, banks, credit unions, or resident insurance producers)
How long must premium finance companies keep records for? - CORRECT ANSWER -3
years.
What are the stipulations for premium finance agreements? - CORRECT ANSWER --
Must be written, signed, and delivered to the insured
-Discloses all details of the transaction
-Discloses the producer's name, balance, total amount of all premiums & payments, down
payment, finance charges, and number or installments
Can interest rates exceed %21? - CORRECT ANSWER - No!
Can delinquency charges exceed $5 per late payment? - CORRECT ANSWER - No!
When must the premium finance company send a surplus to the insured? - CORRECT
ANSWER - When they are getting a refund, unless the surplus is less than $1.
How long before the expiration of a policy must the insurer notify both the producer and insured
before nonrenewing? - CORRECT ANSWER - 45 days.
How long before the expiration of a policy must the insurer notify both the producer and insured
before nonrenewing due to nonpayment? - CORRECT ANSWER - 20 days if it is a
residential policy.
UPDATED ACTUAL Exam Questions and
CORRECT Answers
What are premium finance companies? - CORRECT ANSWER - Loans money to the
insured to pay a premium, and must be licensed as a premium finance company. (Does not apply
to savings & loans, finance companies, banks, credit unions, or resident insurance producers)
How long must premium finance companies keep records for? - CORRECT ANSWER -3
years.
What are the stipulations for premium finance agreements? - CORRECT ANSWER --
Must be written, signed, and delivered to the insured
-Discloses all details of the transaction
-Discloses the producer's name, balance, total amount of all premiums & payments, down
payment, finance charges, and number or installments
Can interest rates exceed %21? - CORRECT ANSWER - No!
Can delinquency charges exceed $5 per late payment? - CORRECT ANSWER - No!
When must the premium finance company send a surplus to the insured? - CORRECT
ANSWER - When they are getting a refund, unless the surplus is less than $1.
How long before the expiration of a policy must the insurer notify both the producer and insured
before nonrenewing? - CORRECT ANSWER - 45 days.
How long before the expiration of a policy must the insurer notify both the producer and insured
before nonrenewing due to nonpayment? - CORRECT ANSWER - 20 days if it is a
residential policy.
