PROPERTY AND CASUALTY NEW
YORK EXAM 2025 QUESTIONS AND
ANSWERS
What is a Broker? - ANS A broker is someone who acts on behalf of the insured in
negotiating insurance, their for a broker has no binding authority , however brokers are
considered to be a collector of premiums.
What is an agent (producer)? - ANS An agent is a person who acts on behalf of an insurance
company with whom they are contracted. Agents have binding authority, this authority stems
from 3 separate authority.
Expressed Authority - ANS This is the actual written agency contract.
Apparent Authority - ANS Authority created when the producer exceeds the authority
expressed in the agency contract. This occurs when insurer does nothing to counter the public
impression that such authority exist.(Ex: company supplied signs, business cards and letter
head.)
Implied Authority - ANS Authority the public assumes the producer has. An example would
be the business activities of providing quotes, completing applications and accepting premiums
on behalf of the insurer.
Captive Agent - ANS Also known as exclusive agent, this means they represent only one
company.
Independent Agent - ANS This means they can represent more than one company.
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, Producer's responsibility to the insurer: - ANS 1) Fiduciary duty to the insurer in all respects,
especially when handling premium funds.
2) Must keep premium funds in a trust account separate from other funds and forward to
insurer promptly.
3) Must report any material facts that may affect underwriting.
4) Responsible for soliciting, negotiating, selling, and cancelling the insurance policies with the
insurer.
5) Duty to only recommend the purchase of only suitable policies.
Producer's responsibilities to the insured: - ANS 1) Forward premiums to insurer on a timely
basis.
2) Seek and gain knowledge of the applicants insurance needs.
3) Review and evaluate the applicant's current insurance coverage, limits and risks.
4) Serve the best interests of the applicant or insured, although producers represent the
insurer.
5) Recommend coverage from the perspective of the producer.
Federal Regulations Under The Fair Credit Reporting Act: - ANS 1) Protects consumer privacy-
A. Ensures data collected is confidential, accurate, relevant and used for a proper and specific
purpose. B. Protects the public from overly intrusive information collection practices.
2) When an application is taken, it must inform applicant a credit report (from consumer
reporting agency) will be obtained. The purpose of this to determine the financial and moral
status of an applicant ( for variety of purposes such as employment screening, insurance
underwriting or loan approvals).
3) Applicant has the right to review the report.
4) Insurer obligations - A. insurer is not responsible for correcting inaccuracies on any reports.
B. If an applicant is denied coverage because of inaccurate information they are entitled to
certain rights.
Risk - ANS A. A condition where the chance, likelihood, probability or potential for a loss
exist.
B. Uncertainty Concerning a loss.
COPYRIGHT © 2025 THESTAR ALL RIGHTS RESERVED 2
YORK EXAM 2025 QUESTIONS AND
ANSWERS
What is a Broker? - ANS A broker is someone who acts on behalf of the insured in
negotiating insurance, their for a broker has no binding authority , however brokers are
considered to be a collector of premiums.
What is an agent (producer)? - ANS An agent is a person who acts on behalf of an insurance
company with whom they are contracted. Agents have binding authority, this authority stems
from 3 separate authority.
Expressed Authority - ANS This is the actual written agency contract.
Apparent Authority - ANS Authority created when the producer exceeds the authority
expressed in the agency contract. This occurs when insurer does nothing to counter the public
impression that such authority exist.(Ex: company supplied signs, business cards and letter
head.)
Implied Authority - ANS Authority the public assumes the producer has. An example would
be the business activities of providing quotes, completing applications and accepting premiums
on behalf of the insurer.
Captive Agent - ANS Also known as exclusive agent, this means they represent only one
company.
Independent Agent - ANS This means they can represent more than one company.
COPYRIGHT © 2025 THESTAR ALL RIGHTS RESERVED 1
, Producer's responsibility to the insurer: - ANS 1) Fiduciary duty to the insurer in all respects,
especially when handling premium funds.
2) Must keep premium funds in a trust account separate from other funds and forward to
insurer promptly.
3) Must report any material facts that may affect underwriting.
4) Responsible for soliciting, negotiating, selling, and cancelling the insurance policies with the
insurer.
5) Duty to only recommend the purchase of only suitable policies.
Producer's responsibilities to the insured: - ANS 1) Forward premiums to insurer on a timely
basis.
2) Seek and gain knowledge of the applicants insurance needs.
3) Review and evaluate the applicant's current insurance coverage, limits and risks.
4) Serve the best interests of the applicant or insured, although producers represent the
insurer.
5) Recommend coverage from the perspective of the producer.
Federal Regulations Under The Fair Credit Reporting Act: - ANS 1) Protects consumer privacy-
A. Ensures data collected is confidential, accurate, relevant and used for a proper and specific
purpose. B. Protects the public from overly intrusive information collection practices.
2) When an application is taken, it must inform applicant a credit report (from consumer
reporting agency) will be obtained. The purpose of this to determine the financial and moral
status of an applicant ( for variety of purposes such as employment screening, insurance
underwriting or loan approvals).
3) Applicant has the right to review the report.
4) Insurer obligations - A. insurer is not responsible for correcting inaccuracies on any reports.
B. If an applicant is denied coverage because of inaccurate information they are entitled to
certain rights.
Risk - ANS A. A condition where the chance, likelihood, probability or potential for a loss
exist.
B. Uncertainty Concerning a loss.
COPYRIGHT © 2025 THESTAR ALL RIGHTS RESERVED 2
