PENNSYLVANIA PROPERTY AND
CASUALTY LICENSING EXAM 2025
QUESTIONS AND ANSWERS
Law of Large Numbers - ANS Recognizes that as the number of exposure units increases, the
more likely it is to predict accurately the expected outcome.
What must an insurance producer do to apply for a nonresident license in Pennsylvania? -
ANS Prove that their license is in good standing in their home state
Which best describes the responsibilities an agent owes when they sell a policy? - ANS To
provide the agreed-upon insurance and to place coverage with a solvent insurer
Which of the following is not a prohibited marketing practice? - ANS Discrimination among
risks
Which law, act, or regulation governs how insurers and their producers treat personal financial
information from individuals? - ANS Privacy of Consumer Financial Information Regulation
Retention - ANS "do nothing" option; a person becomes personally responsible for the
consequences of risk
Can an insurer change their assumed name? - ANS Yes, but they must notify the
Commissioner before using the assumed name?
COPYRIGHT © 2025 FYNDLAY ALL RIGHTS RESERVED 1
,Contract of Adhesion - ANS "take-it-or-leave-it," drafted by one party; other party has no
opportunity to negotiate terms and prices. Party must "adhere" to provisions as presented
Tad used unauthorized material to assist him on his examination for his insurance producer
license. He justified this by saying the materials would be available to him in a real life situation.
Which statement is true? - ANS Tad committed a prohibited act.
What is the maximum fine that may be imposed upon a producer for violating two of the
Commissioner's orders? - ANS $20,000; A fine of up to $10,000 for each violation of an order
issued by the commissioner.
Admitted Insurer - ANS An insurance company authorized and licensed to transact business
in a particular state.
Which of the following is not acting as an insurance producer? - ANS Brian, who is a VP at
AllPro's human resources department and does not receive commissions
Edwin has decided not to retain the risk of home ownership himself. What method of risk does
he choose when he purchases homeowners insurance? - ANS Transfer: the risk of loss is
transferred from the insured to the insurance company in exchange for a premium payment
Alien Insurer - ANS Incorporated in a country other than the United States
What fine will the Commissioner impose for the practice of unfair methods of competition? -
ANS Up to $5,000 for each violation (but not more than $50,000 in a 6 month period)
Which of the following is not an unfair claims settlement practice if committed by an insurance
company in Pennsylvania? - ANS Failing to promptly settle a claim for which liability is
uncertain. (An insurer is not obligated to settle a claim for which it's not clearly liable)
Which of the following would NOT be considered misrepresentation of an insurance policy? -
ANS Enthusiastically promoting an insurance product
COPYRIGHT © 2025 FYNDLAY ALL RIGHTS RESERVED 2
,Which of the following statements BEST describes the transfer of risk via an insurance contract?
- ANS Not all risks are transferable via insurance contracts
Must the Commissioner conduct an examination of every foreign or alien insurer licensed in
Pennsylvania? - ANS The Commissioner may choose to waive examinations under certain
circumstances
Aleatory Contract - ANS One party may receive a benefit that is out of proportion to the
consideration he or she paid for.
Bill failed to satisfy the continuing education requirements to keep his producer's license active
in Pennsylvania. Two years later, he decides to renew his license. Can he do so? - ANS No, he
must apply for a new license.
Which of the following is NOT the action of an agent considering the best interests of an
applicant or insured? - ANS Making a misrepresentation of the terms of a proposed policy
Who is the head of the Pennsylvania Insurance Department? - ANS Insurance Commissioner
May a producer charge a service fee for completing a consumer's insurance application? -
ANS No
What must an insurance company do to employ someone as a producer? - ANS *File a notice
of appointment with the Department.* The department then will verify if the producer is
eligible for appointment. If ineligible, they will notify the insurer. The insurer pays a fee for
every appointment.
To boost her insurance sales at the end of the year, Trudy started offering potential clients a
$250 cash gift card in exchange for purchasing an insurance policy. Which prohibited sales
practice has she committed? - ANS Rebating (offering anything of value in exchange for the
purchase of insurance)
COPYRIGHT © 2025 FYNDLAY ALL RIGHTS RESERVED 3
, Within how many days must the Commissioner approve or disapprove rates? - ANS 30
The federal Fair Credit Reporting Act protects the rights of: - ANS Consumers
Larry submitted a claim under his homeowners insurance policy. The insurance company has
the burden of proof to show that the loss is excluded; otherwise, it must pay Larry's claim.
What causes of loss are contained on Larry's policy. - ANS Open Perils
Open Peril - ANS All perils except those specifically excluded
Sara sustains a water damage loss to her home due to torrential rains that flooded her
neighborhood. She reports the loss to her agent and says that according to the insuring
agreement of her policy, she is insured against risks of direct loss to her property. Is she
covered for this damage to her property? - ANS No, this kind of loss is typically excluded.
Are losses by flood covered in homeowners policies? - ANS No, this type of loss is specifically
excluded in homeowners policies. It can be obtained in some cases by endorsement or through
the National Flood Insurance Program (NFIP)
Which of the following is NOT an example of a peril, or cause of loss? - ANS Blocked exit in a
burning building delaying entry to firefighters (this is a hazard, not a peril)
What is the maximum amount for which the Pennsylvania Property and Casualty Insurance
Guaranty Association can be liable for on a covered claim? - ANS $300,000
For a loss to be covered under a property insurance policy, a covered peril must be a(n) -
ANS Proximate cause of loss (cause that sets in motion an unbroken chain of events leading
to the loss; may or may not be the immediate cause of the loss)
If an insurer initiates a midterm cancellation of a commercial property or casualty risk insurance
policy, the unearned premium must be returned to the insured within how many business days
after the effective date of termination? - ANS 10 days
COPYRIGHT © 2025 FYNDLAY ALL RIGHTS RESERVED 4
CASUALTY LICENSING EXAM 2025
QUESTIONS AND ANSWERS
Law of Large Numbers - ANS Recognizes that as the number of exposure units increases, the
more likely it is to predict accurately the expected outcome.
What must an insurance producer do to apply for a nonresident license in Pennsylvania? -
ANS Prove that their license is in good standing in their home state
Which best describes the responsibilities an agent owes when they sell a policy? - ANS To
provide the agreed-upon insurance and to place coverage with a solvent insurer
Which of the following is not a prohibited marketing practice? - ANS Discrimination among
risks
Which law, act, or regulation governs how insurers and their producers treat personal financial
information from individuals? - ANS Privacy of Consumer Financial Information Regulation
Retention - ANS "do nothing" option; a person becomes personally responsible for the
consequences of risk
Can an insurer change their assumed name? - ANS Yes, but they must notify the
Commissioner before using the assumed name?
COPYRIGHT © 2025 FYNDLAY ALL RIGHTS RESERVED 1
,Contract of Adhesion - ANS "take-it-or-leave-it," drafted by one party; other party has no
opportunity to negotiate terms and prices. Party must "adhere" to provisions as presented
Tad used unauthorized material to assist him on his examination for his insurance producer
license. He justified this by saying the materials would be available to him in a real life situation.
Which statement is true? - ANS Tad committed a prohibited act.
What is the maximum fine that may be imposed upon a producer for violating two of the
Commissioner's orders? - ANS $20,000; A fine of up to $10,000 for each violation of an order
issued by the commissioner.
Admitted Insurer - ANS An insurance company authorized and licensed to transact business
in a particular state.
Which of the following is not acting as an insurance producer? - ANS Brian, who is a VP at
AllPro's human resources department and does not receive commissions
Edwin has decided not to retain the risk of home ownership himself. What method of risk does
he choose when he purchases homeowners insurance? - ANS Transfer: the risk of loss is
transferred from the insured to the insurance company in exchange for a premium payment
Alien Insurer - ANS Incorporated in a country other than the United States
What fine will the Commissioner impose for the practice of unfair methods of competition? -
ANS Up to $5,000 for each violation (but not more than $50,000 in a 6 month period)
Which of the following is not an unfair claims settlement practice if committed by an insurance
company in Pennsylvania? - ANS Failing to promptly settle a claim for which liability is
uncertain. (An insurer is not obligated to settle a claim for which it's not clearly liable)
Which of the following would NOT be considered misrepresentation of an insurance policy? -
ANS Enthusiastically promoting an insurance product
COPYRIGHT © 2025 FYNDLAY ALL RIGHTS RESERVED 2
,Which of the following statements BEST describes the transfer of risk via an insurance contract?
- ANS Not all risks are transferable via insurance contracts
Must the Commissioner conduct an examination of every foreign or alien insurer licensed in
Pennsylvania? - ANS The Commissioner may choose to waive examinations under certain
circumstances
Aleatory Contract - ANS One party may receive a benefit that is out of proportion to the
consideration he or she paid for.
Bill failed to satisfy the continuing education requirements to keep his producer's license active
in Pennsylvania. Two years later, he decides to renew his license. Can he do so? - ANS No, he
must apply for a new license.
Which of the following is NOT the action of an agent considering the best interests of an
applicant or insured? - ANS Making a misrepresentation of the terms of a proposed policy
Who is the head of the Pennsylvania Insurance Department? - ANS Insurance Commissioner
May a producer charge a service fee for completing a consumer's insurance application? -
ANS No
What must an insurance company do to employ someone as a producer? - ANS *File a notice
of appointment with the Department.* The department then will verify if the producer is
eligible for appointment. If ineligible, they will notify the insurer. The insurer pays a fee for
every appointment.
To boost her insurance sales at the end of the year, Trudy started offering potential clients a
$250 cash gift card in exchange for purchasing an insurance policy. Which prohibited sales
practice has she committed? - ANS Rebating (offering anything of value in exchange for the
purchase of insurance)
COPYRIGHT © 2025 FYNDLAY ALL RIGHTS RESERVED 3
, Within how many days must the Commissioner approve or disapprove rates? - ANS 30
The federal Fair Credit Reporting Act protects the rights of: - ANS Consumers
Larry submitted a claim under his homeowners insurance policy. The insurance company has
the burden of proof to show that the loss is excluded; otherwise, it must pay Larry's claim.
What causes of loss are contained on Larry's policy. - ANS Open Perils
Open Peril - ANS All perils except those specifically excluded
Sara sustains a water damage loss to her home due to torrential rains that flooded her
neighborhood. She reports the loss to her agent and says that according to the insuring
agreement of her policy, she is insured against risks of direct loss to her property. Is she
covered for this damage to her property? - ANS No, this kind of loss is typically excluded.
Are losses by flood covered in homeowners policies? - ANS No, this type of loss is specifically
excluded in homeowners policies. It can be obtained in some cases by endorsement or through
the National Flood Insurance Program (NFIP)
Which of the following is NOT an example of a peril, or cause of loss? - ANS Blocked exit in a
burning building delaying entry to firefighters (this is a hazard, not a peril)
What is the maximum amount for which the Pennsylvania Property and Casualty Insurance
Guaranty Association can be liable for on a covered claim? - ANS $300,000
For a loss to be covered under a property insurance policy, a covered peril must be a(n) -
ANS Proximate cause of loss (cause that sets in motion an unbroken chain of events leading
to the loss; may or may not be the immediate cause of the loss)
If an insurer initiates a midterm cancellation of a commercial property or casualty risk insurance
policy, the unearned premium must be returned to the insured within how many business days
after the effective date of termination? - ANS 10 days
COPYRIGHT © 2025 FYNDLAY ALL RIGHTS RESERVED 4
