PA PROPERTY & CASUALTY LICENSE
PRACTICE EXAM Q AND A
Anvyexclusionvythatvystatesvythatvyanvyinsurervywillvynotvypayvyanyvyclaimvyinvywhichvyanvyindi
vidualsvypropertyvyisvydamagedvyasvyavyresultvyofvyanvyearthquake,vymudslide,vylandslide,vy
orvysinkhole.vy-vyanswer--anvyEarthvymovementvyexclusion
Anvyexclusionvythatvystatesvythatvyanvyinsurervywillvynotvypayvyanyvyclaimvyinvywhichvyanvyindi
vidualsvypropertyvyisvydamagedvyasvyavyresultvyofvythevyfactvythatvythevyindividualvydidvynotvy
maintainvythevyproperty.vy-vyanswer--Neglectvyexclusion
WhichvyHomevyOwner'svyformvycoversvydamagevytovyavycondovyowner'svyPROPERTYvytha
tvyoccursvyasvythevyresultvyofvyanyvyeventvythatvyisvynotvyspecificallyvyexcludedvyinvythevypolic
y.vy-vyanswer--HO-6vyUnitvyOwner'svyForm
WhichvyHomevyOwner'svyformvycoversvydamagevytovyavyTENANT'Svypropertyvythatvyoccur
svyasvyavyresultvyofvyanvyaircraft,vycivilvycommotion,vyexplosion,vyfire,vynail,vylightning,vysmok
e,vytheft,vyvandalism,vyvehiclesvyand/orvywind.vy-vyanswer--HO-4vyContent'svyBroadvyForm
WhichvyHOvyformvycoversvydamagevytovythevyDWELLINGvythatvyoccursvyasvythevyresultvyofv
yanyvyeventvythatvyisvynotvyspecificallyvyexcludedvyinvythevypolicyvyandvydamagevytovythevypr
opertyvyinsidevythevydwellingvythatvyresultsvyofvyanvyaircraft,vycivilvycommotion,vyexplosion,v
yfire,vyhail,vylightning,vysmoke,vytheft,vyvandalism,vyvehicles,vyand/orvywind.vy-vyanswer--
HO-3vySpecialvyForm
WhichvyHOvyFormvycoversvydamagevytovythevyDWELLINGvy&vyPROPERTYvyinsidevythevyd
wellingvythatvyoccursvyasvyanvyresultvyofvyanyvyeventvythatvyisvynotvyspecificallyvyexcludedvyin
vythevypolicy.vy-vyanswer--HOvy-vy5vyComprehensivevyForm
Whatvymeansvyconductingvybusinessvyinvyaccordancevywithvycurrentvyrulesvyandvylawsvyse
tvybyvygovernmentvyregulatoryvyagenciesvyandvythevycourts.vy-vyanswer--Compliance
Standardsvyofvyconductvyandvymoralvyjudgement.vy-vyanswer--Ethics
Legalvytermvythatvydescribesvythevyrelationshipvybetweenvyparties.vy-vyanswer--Agency
Whatvyisvythevytermvytovydescribevyhowvyanvyinsurervyappointsvyanvyindividualvytovyactvyonvyit
svybehalf.vy-vyanswer--AgencyvyContract
Anvyindividualvywhosevypositionvyandvyresponsibilitiesvyinvolvevyavyhighvydegreevyofvytrustvy
andvyconfidencevy(trustees,vyguardians,vyandvyexecutors).vy-vyanswer--Fiduciary
Thevynamevyforvythevyfactvyavyproducervymustvysellvythevykindvyofvypoliciesvythatvybestvyfitvyth
evyprospectsvyneedsvyandvyinvyamountsvythatvythevyprospectsvycanvyafford.vy-vyanswer--
NeedsvySelling
,Whatvyisvygivenvywhenvythevyapplicantvypaysvythevyinitialvypremiumvyatvythevytimevythevyappli
cationvyforvyavypolicyvyisvysigned.vy-vyanswer--ConditionalvyReceipt
Whatvyisvythevytermvyforvyinformingvythevyprospectvyorvyclientvyofvyallvyfactsvyinvolvingvyavysp
ecificvypolicyvyorvyplanvysovythatvyanvyinformedvydecisionvycanvybevymade.vy-vyanswer--
FullvyDisclosure
Whatvyisvythevynamevyforvythevywatchdogvygroupvywhosevymembervycompaniesvyagreevytov
yadherevytovyandvyenforcevyethicalvyprinciples.vy-vyanswer--
InsurancevyStandardsvyAssociationvy(IMSA)
WhatvyActvydealsvywithvythevyinappropriatevyusevyofvyadvertising.vy-vyanswer--
UnfairvyTradevyPracticesvyAct
Anyvywrittenvyorvyoralvystatementvythatvydoesvynotvyaccuratelyvydescribevyavypolicy'svyfeatur
es,vybenefits,vyorvycoverage.vy-vyanswer--Misrepresentation
Anyvyfalse,vymaliciously,vycriticalvyorvyderogatoryvycommunicationvythatvyinjuresvyanother'
svyreputation,vyfame,vyorvycharacter.vy-vyanswer--Defamation
Whatvyisvythevytermvyifvythevybuyervyofvyanvyinsurancevypolicyvyreceivesvyanyvypartvyofvythevyp
roducersvycommissionvyorvyanythingvyelsevyofvysignificantvyvaluesvyasvyanvyinducementvyto
vypurchasevyavypolicy.vy-vyanswer--Rebating
Thevyunethicalvyactvyofvypersuadingvyavypolicyvyownervytovydropvyavypolicyvysolelyvyforvythevy
purposevyofvysellingvyanothervypolicyvywithoutvyregardvytovythevypossiblevydisadvantagesvyt
ovythevypolicyvyowner.vy-vyanswer--Twisting.
Avyresidentvyproducersvylicensevymustvymeetvywhatvy2vyrequirements?vy-vyanswer--
1.)vyMayvyeithervyresidevyinvyPAvy-or-
2.)vyHavevytheirvyprincipalvyplacevyofvybusinessvyinvyPA
Invywhatvy2vysituationsvyisvyitvynotvyrequiredvytovybevyavylicensedvyasvyavymanagervyorvyexclus
ivevygeneralvyagent?vy-vyanswer--
1.)vyThevylicenseevywhovyhasvylimitedvyunderwritingvyauthorityvy-vyor-
2.)vyAvymanagervyorvyagentvywhovyhasvystartedvybeforevyDec.vy22,vy1965
Whichvyofvythevyfollowingvycanvynotvybevyissuedvyavytempvylicense?vy-vyanswer--
Avypersonvysellingvyinsurancevyforvythevyestatevyofvyavydeceasedvyproducer.
WhichvyisvyNOTvyavyreasonvyforvyavylicensedvytovybevysuspendedvyorvyrevoked?
a.)vyMakingvyfactualvybyvysubjectivevycomparisonsvyofvy2vypolicies.
b.)vyIntentionallyvyviolatingvyavyceasevyandvydesistvyorder.
c.)vyMakingvyfalsevystatementsvyinvyavylicensevyapplication.
d.)vyViolatingvyanvyinsurancevyregulation.vy-vyanswer--A.
Increasesvyavychancevyforvylossvy-vyanswer--Hazardvy(i.e.vyleavingvyavydoorvyunlocked)
Chancevyofvyavylossvy-vyanswer--Risk
, Avymeansvyofvytransferringvythevyriskvyofvylossvy-vyanswer--Insurance
Thevycausevyofvythevylossvy-vyanswer--Perilsvy(i.e.vyFire,vyFlood,vyCollision,vyTheft)
Statesvythatvytherevymustvybevyanvyadequatevyspreadvyofvyriskvyforvyinsurancevytovybevyeffec
tive.vy-vyanswer--LawvyofvyLargevy#s
Installingvyanvyautomaticvysprinklervysystemvyisvyanvyexamplevyofvy-vyanswer--
Reductionvy(canvynotvyavoidvyriskvybutvycanvyreducevyit)
Decidingvynotvytovyproducevyavyproducevyduevytovyseriousvypotentialvysidevyeffects.vy-
vyanswer--Avoidancevy(avoidvythevyriskvyofvybeingvysued)
Personvyinvygoodvyhealthvycancelsvyhealthvyinsurancevypolicy...Whatvyisvyriskvymanageme
ntvy-vyanswer--Retentionvy(retainingvythevyrisk)
UndervywhatvyregulationvyinvyPAvydoesvyitvystatevythatvyinsurersvymustvymaintainvyavyspecifi
cvyminimumvylevelsvyofvycapitalvystockvyandvysurplus?vy-vyanswer--
RegulationvyofvyInsurervySolvency.
Whovyregulatesvyinsurancevyratesvytovyavoidvyexcessive,vyinadequate,vyorvyunfairlyvydiscri
minatoryvyrates?vy-vyanswer--Casualtyvy&vySuretyvyRatevyRegulatoryvyAct
Whovymustvyanvyinsurervynotifyvywhenvytheyvyterminatevyavyproducer'svyappointment?vy-
vyanswer--ThevyCommissionervyandvyproducer.
Whichvyofvythevyfollowingvyisvynotvyavypowervyandvydutyvyofvythevyinsurancevycommissioner
?vy-vyanswer--
Issuingvyavyceasevyandvydesistvyorder,vyprosecutingvyproducersvywhovyviolatevystatevyinsur
ancevylaws,vyconductingvycomplaintvyhearings,vyappointingvyexaminers.
Whatvyunfairvypracticesvyisvywhenvyavyproducervyoffers,vypromises,vyallows,vygives,vysetsvy
off,vyorvypaysvyavyrebatevyonvythevycontractvyofvyinsurance.vy-vyanswer--Rebating
Whatvyunfairvyinsurancevypracticevyisvythevypurchasevyofvyinsurancevyfromvyavyfinancialvyins
titutionvyorvyfromvyavydesignatedvyinsurervyorvyproducervyasvyavyconditionvyofvyanyvyloanvyorvy
depositedvytransaction.vy-vyanswer--Tie-InvySales
Non-publicvypersonalvyfinancialvyinformationvyaboutvyindividuals.vy-vyanswer--
PrivacyvyofvyConsumer'svyFinancialvyinformation
Termvyforvyinstructionvybyvythevyconsumervytovythevylicenseevynovytovydisclosevynon-
publicvypersonalvyfinancialvyinformationvyaboutvythevyconsumervytovyavynon-
affiliatedvythirdvyparty.vy-vyanswer--opt-out
Whenvyavyproducervysharesvyavycommissionvywithvyanvyunlicensedvyperson.vy-vyanswer--
Ifvyavylicensevywasvyheldvyatvyavytimevyofvysale;vyReferringvyavypersonvycanvyreceivevyavyonevy
timevynominalvysetvyfee
PRACTICE EXAM Q AND A
Anvyexclusionvythatvystatesvythatvyanvyinsurervywillvynotvypayvyanyvyclaimvyinvywhichvyanvyindi
vidualsvypropertyvyisvydamagedvyasvyavyresultvyofvyanvyearthquake,vymudslide,vylandslide,vy
orvysinkhole.vy-vyanswer--anvyEarthvymovementvyexclusion
Anvyexclusionvythatvystatesvythatvyanvyinsurervywillvynotvypayvyanyvyclaimvyinvywhichvyanvyindi
vidualsvypropertyvyisvydamagedvyasvyavyresultvyofvythevyfactvythatvythevyindividualvydidvynotvy
maintainvythevyproperty.vy-vyanswer--Neglectvyexclusion
WhichvyHomevyOwner'svyformvycoversvydamagevytovyavycondovyowner'svyPROPERTYvytha
tvyoccursvyasvythevyresultvyofvyanyvyeventvythatvyisvynotvyspecificallyvyexcludedvyinvythevypolic
y.vy-vyanswer--HO-6vyUnitvyOwner'svyForm
WhichvyHomevyOwner'svyformvycoversvydamagevytovyavyTENANT'Svypropertyvythatvyoccur
svyasvyavyresultvyofvyanvyaircraft,vycivilvycommotion,vyexplosion,vyfire,vynail,vylightning,vysmok
e,vytheft,vyvandalism,vyvehiclesvyand/orvywind.vy-vyanswer--HO-4vyContent'svyBroadvyForm
WhichvyHOvyformvycoversvydamagevytovythevyDWELLINGvythatvyoccursvyasvythevyresultvyofv
yanyvyeventvythatvyisvynotvyspecificallyvyexcludedvyinvythevypolicyvyandvydamagevytovythevypr
opertyvyinsidevythevydwellingvythatvyresultsvyofvyanvyaircraft,vycivilvycommotion,vyexplosion,v
yfire,vyhail,vylightning,vysmoke,vytheft,vyvandalism,vyvehicles,vyand/orvywind.vy-vyanswer--
HO-3vySpecialvyForm
WhichvyHOvyFormvycoversvydamagevytovythevyDWELLINGvy&vyPROPERTYvyinsidevythevyd
wellingvythatvyoccursvyasvyanvyresultvyofvyanyvyeventvythatvyisvynotvyspecificallyvyexcludedvyin
vythevypolicy.vy-vyanswer--HOvy-vy5vyComprehensivevyForm
Whatvymeansvyconductingvybusinessvyinvyaccordancevywithvycurrentvyrulesvyandvylawsvyse
tvybyvygovernmentvyregulatoryvyagenciesvyandvythevycourts.vy-vyanswer--Compliance
Standardsvyofvyconductvyandvymoralvyjudgement.vy-vyanswer--Ethics
Legalvytermvythatvydescribesvythevyrelationshipvybetweenvyparties.vy-vyanswer--Agency
Whatvyisvythevytermvytovydescribevyhowvyanvyinsurervyappointsvyanvyindividualvytovyactvyonvyit
svybehalf.vy-vyanswer--AgencyvyContract
Anvyindividualvywhosevypositionvyandvyresponsibilitiesvyinvolvevyavyhighvydegreevyofvytrustvy
andvyconfidencevy(trustees,vyguardians,vyandvyexecutors).vy-vyanswer--Fiduciary
Thevynamevyforvythevyfactvyavyproducervymustvysellvythevykindvyofvypoliciesvythatvybestvyfitvyth
evyprospectsvyneedsvyandvyinvyamountsvythatvythevyprospectsvycanvyafford.vy-vyanswer--
NeedsvySelling
,Whatvyisvygivenvywhenvythevyapplicantvypaysvythevyinitialvypremiumvyatvythevytimevythevyappli
cationvyforvyavypolicyvyisvysigned.vy-vyanswer--ConditionalvyReceipt
Whatvyisvythevytermvyforvyinformingvythevyprospectvyorvyclientvyofvyallvyfactsvyinvolvingvyavysp
ecificvypolicyvyorvyplanvysovythatvyanvyinformedvydecisionvycanvybevymade.vy-vyanswer--
FullvyDisclosure
Whatvyisvythevynamevyforvythevywatchdogvygroupvywhosevymembervycompaniesvyagreevytov
yadherevytovyandvyenforcevyethicalvyprinciples.vy-vyanswer--
InsurancevyStandardsvyAssociationvy(IMSA)
WhatvyActvydealsvywithvythevyinappropriatevyusevyofvyadvertising.vy-vyanswer--
UnfairvyTradevyPracticesvyAct
Anyvywrittenvyorvyoralvystatementvythatvydoesvynotvyaccuratelyvydescribevyavypolicy'svyfeatur
es,vybenefits,vyorvycoverage.vy-vyanswer--Misrepresentation
Anyvyfalse,vymaliciously,vycriticalvyorvyderogatoryvycommunicationvythatvyinjuresvyanother'
svyreputation,vyfame,vyorvycharacter.vy-vyanswer--Defamation
Whatvyisvythevytermvyifvythevybuyervyofvyanvyinsurancevypolicyvyreceivesvyanyvypartvyofvythevyp
roducersvycommissionvyorvyanythingvyelsevyofvysignificantvyvaluesvyasvyanvyinducementvyto
vypurchasevyavypolicy.vy-vyanswer--Rebating
Thevyunethicalvyactvyofvypersuadingvyavypolicyvyownervytovydropvyavypolicyvysolelyvyforvythevy
purposevyofvysellingvyanothervypolicyvywithoutvyregardvytovythevypossiblevydisadvantagesvyt
ovythevypolicyvyowner.vy-vyanswer--Twisting.
Avyresidentvyproducersvylicensevymustvymeetvywhatvy2vyrequirements?vy-vyanswer--
1.)vyMayvyeithervyresidevyinvyPAvy-or-
2.)vyHavevytheirvyprincipalvyplacevyofvybusinessvyinvyPA
Invywhatvy2vysituationsvyisvyitvynotvyrequiredvytovybevyavylicensedvyasvyavymanagervyorvyexclus
ivevygeneralvyagent?vy-vyanswer--
1.)vyThevylicenseevywhovyhasvylimitedvyunderwritingvyauthorityvy-vyor-
2.)vyAvymanagervyorvyagentvywhovyhasvystartedvybeforevyDec.vy22,vy1965
Whichvyofvythevyfollowingvycanvynotvybevyissuedvyavytempvylicense?vy-vyanswer--
Avypersonvysellingvyinsurancevyforvythevyestatevyofvyavydeceasedvyproducer.
WhichvyisvyNOTvyavyreasonvyforvyavylicensedvytovybevysuspendedvyorvyrevoked?
a.)vyMakingvyfactualvybyvysubjectivevycomparisonsvyofvy2vypolicies.
b.)vyIntentionallyvyviolatingvyavyceasevyandvydesistvyorder.
c.)vyMakingvyfalsevystatementsvyinvyavylicensevyapplication.
d.)vyViolatingvyanvyinsurancevyregulation.vy-vyanswer--A.
Increasesvyavychancevyforvylossvy-vyanswer--Hazardvy(i.e.vyleavingvyavydoorvyunlocked)
Chancevyofvyavylossvy-vyanswer--Risk
, Avymeansvyofvytransferringvythevyriskvyofvylossvy-vyanswer--Insurance
Thevycausevyofvythevylossvy-vyanswer--Perilsvy(i.e.vyFire,vyFlood,vyCollision,vyTheft)
Statesvythatvytherevymustvybevyanvyadequatevyspreadvyofvyriskvyforvyinsurancevytovybevyeffec
tive.vy-vyanswer--LawvyofvyLargevy#s
Installingvyanvyautomaticvysprinklervysystemvyisvyanvyexamplevyofvy-vyanswer--
Reductionvy(canvynotvyavoidvyriskvybutvycanvyreducevyit)
Decidingvynotvytovyproducevyavyproducevyduevytovyseriousvypotentialvysidevyeffects.vy-
vyanswer--Avoidancevy(avoidvythevyriskvyofvybeingvysued)
Personvyinvygoodvyhealthvycancelsvyhealthvyinsurancevypolicy...Whatvyisvyriskvymanageme
ntvy-vyanswer--Retentionvy(retainingvythevyrisk)
UndervywhatvyregulationvyinvyPAvydoesvyitvystatevythatvyinsurersvymustvymaintainvyavyspecifi
cvyminimumvylevelsvyofvycapitalvystockvyandvysurplus?vy-vyanswer--
RegulationvyofvyInsurervySolvency.
Whovyregulatesvyinsurancevyratesvytovyavoidvyexcessive,vyinadequate,vyorvyunfairlyvydiscri
minatoryvyrates?vy-vyanswer--Casualtyvy&vySuretyvyRatevyRegulatoryvyAct
Whovymustvyanvyinsurervynotifyvywhenvytheyvyterminatevyavyproducer'svyappointment?vy-
vyanswer--ThevyCommissionervyandvyproducer.
Whichvyofvythevyfollowingvyisvynotvyavypowervyandvydutyvyofvythevyinsurancevycommissioner
?vy-vyanswer--
Issuingvyavyceasevyandvydesistvyorder,vyprosecutingvyproducersvywhovyviolatevystatevyinsur
ancevylaws,vyconductingvycomplaintvyhearings,vyappointingvyexaminers.
Whatvyunfairvypracticesvyisvywhenvyavyproducervyoffers,vypromises,vyallows,vygives,vysetsvy
off,vyorvypaysvyavyrebatevyonvythevycontractvyofvyinsurance.vy-vyanswer--Rebating
Whatvyunfairvyinsurancevypracticevyisvythevypurchasevyofvyinsurancevyfromvyavyfinancialvyins
titutionvyorvyfromvyavydesignatedvyinsurervyorvyproducervyasvyavyconditionvyofvyanyvyloanvyorvy
depositedvytransaction.vy-vyanswer--Tie-InvySales
Non-publicvypersonalvyfinancialvyinformationvyaboutvyindividuals.vy-vyanswer--
PrivacyvyofvyConsumer'svyFinancialvyinformation
Termvyforvyinstructionvybyvythevyconsumervytovythevylicenseevynovytovydisclosevynon-
publicvypersonalvyfinancialvyinformationvyaboutvythevyconsumervytovyavynon-
affiliatedvythirdvyparty.vy-vyanswer--opt-out
Whenvyavyproducervysharesvyavycommissionvywithvyanvyunlicensedvyperson.vy-vyanswer--
Ifvyavylicensevywasvyheldvyatvyavytimevyofvysale;vyReferringvyavypersonvycanvyreceivevyavyonevy
timevynominalvysetvyfee
