webce test Comprehensive Questions
(Frequently Tested) with Verified
Answers
which of the following situations presents a situation of pure risk?
-knowing that his family is depending on him, Frank wants to insure his life
-wanting to increase his retirement savings, Saul invests his life savings in the stock market
-Ralph takes a second mortgage on his house and uses the proceeds to gamble
-wanting better job security, Ron cashes in his life insurance to start his own business - Answer:
knowing that his family is depending on him, Frank wants to insure his own life
only pure risk is insurable. Pure risk may only result in a loss, unlike speculative risk which may
result in a gain.
Agent Jill received a letter from the Department of insurance asking her to submit verification of
having completed the continued education requirements for the previous licensing period.
Three weeks later, the department sent another letter. Which penalty may the Department
impose if Jill has still not responded to their request a month later? - Answer: a fine up to $100
per day per violation
A producer has 30 days to respond to a written inquiry from the Department
Jim's policy expired due to nonpayment of premium. His agent sends him a statement the
following month without notice of the lapse. If Jim pays the premium and later suffers a loss for
which he files a claim, what will prevent the insurer from denying the claim?
-estoppel
,-utmost good faith
-reasonable expectations
-waiver - Answer: estoppel
BBC insurers filed premium rates for its new line of variable products on January 15. Within how
many days must the commissioner approve or disapprove the rates? - Answer: 30 days
all rate filings are subject to a 30-day waiting period before they become effective.
The commissioner of insurance can examine the business accounts, transactions, and records of
insurers and producers as often as necessary, but must do so at least once in how many years? -
Answer: 5 years
Acme Insurance and Apogee insurance agree to offer different premium rates for persons of
equal risk within a particular class. They also agree to limit benefits paid to insureds within this
class if the insureds live within certain counties of PA. What are Acme and Apogee engaging in?
-acceptable marketing and underwriting practices
-unfair and prohibited business practices
-insurance fraud
-false advertising - Answer: they are engaging in unfair and prohibited business practices
they are agreeing to unreasonable restraint of trade in insurance business, and they are
engaging in unfair discrimination
which of the following is NOT a remedy available to the PA commissioner of insurance for
committing an unfair method of competition?
,-imprisonment
-cease and desist order
-suspension of license
-revocation of license - Answer: imprisonment is not a punishment for committing an unfair
method of competition
you cannot be arrested for committing an unfair method of competition
which of the following is NOT an unfair claims settlement practice if committed by an insurance
company in PA?
-failing to promptly acknowledge communications about claims
-failing to promptly settle a claim for which liability is uncertain
-appealing from an arbitration award in favor of an insured to compel the insured to accept a
lower settlement
-failing to affirm or deny coverage within a reasonable time after completing a claim
investigation - Answer: ailing to promptly settle a claim for which liability is uncertain is NOT an
unfair claims settlement practice
Jeff is a licensed insurance producer in both PA and NY. he is charged with embezzlement in NY,
and his first pretrial hearing is set for March 1. He must notify the PA commissioner of insurance
within how many days of this hearing? - Answer: Jeff has 30 days to notify the PA commissioner
of insurance of the disciplinary action being taken against him
which of the following is NOT an unfair claims settlement practice if committed by an insurance
company in PA?
-failing to promptly acknowledge communications about claims
-failing to promptly settle a claim for which liability is uncertain
, -offering to settle claims for less than due to encourage litigation
-raising policy defenses to reduce a claim - Answer: failing to promptly settle a claim for which
liability is uncertain is not an unfair claims settlement practice
Stacy is a captive agent for best rates insurance company. Her agency contract gives her
permission to print and use business cards with the company's logo and submit applications for
its policy. What type of authority does stacy have to take these actions? - Answer: Stacy has
express authority due to the contract between her and the insurance company specifically
allowing her act in such a way
to boost her sales at the end of the year, agent Trudy started offering potential clients a $250
cash gift card in exchange for purchasing a life insurance policy. which ethical sales practice has
she violated?
-twisting
-churning
-rebating
-false information - Answer: rebating
its illegal to offer gifts in exchange for the purchase of an insurance policy
which of the following is not a power granted to the PA commissioner of insurance?
-licensing producers and companies
-enforcing insurance laws
-issuing regulations to administer insurance laws
-prosecuting individuals for violating insurance laws - Answer: the PA commissioner of insurance
CANNOT prosecute individuals for violating insurance laws
(Frequently Tested) with Verified
Answers
which of the following situations presents a situation of pure risk?
-knowing that his family is depending on him, Frank wants to insure his life
-wanting to increase his retirement savings, Saul invests his life savings in the stock market
-Ralph takes a second mortgage on his house and uses the proceeds to gamble
-wanting better job security, Ron cashes in his life insurance to start his own business - Answer:
knowing that his family is depending on him, Frank wants to insure his own life
only pure risk is insurable. Pure risk may only result in a loss, unlike speculative risk which may
result in a gain.
Agent Jill received a letter from the Department of insurance asking her to submit verification of
having completed the continued education requirements for the previous licensing period.
Three weeks later, the department sent another letter. Which penalty may the Department
impose if Jill has still not responded to their request a month later? - Answer: a fine up to $100
per day per violation
A producer has 30 days to respond to a written inquiry from the Department
Jim's policy expired due to nonpayment of premium. His agent sends him a statement the
following month without notice of the lapse. If Jim pays the premium and later suffers a loss for
which he files a claim, what will prevent the insurer from denying the claim?
-estoppel
,-utmost good faith
-reasonable expectations
-waiver - Answer: estoppel
BBC insurers filed premium rates for its new line of variable products on January 15. Within how
many days must the commissioner approve or disapprove the rates? - Answer: 30 days
all rate filings are subject to a 30-day waiting period before they become effective.
The commissioner of insurance can examine the business accounts, transactions, and records of
insurers and producers as often as necessary, but must do so at least once in how many years? -
Answer: 5 years
Acme Insurance and Apogee insurance agree to offer different premium rates for persons of
equal risk within a particular class. They also agree to limit benefits paid to insureds within this
class if the insureds live within certain counties of PA. What are Acme and Apogee engaging in?
-acceptable marketing and underwriting practices
-unfair and prohibited business practices
-insurance fraud
-false advertising - Answer: they are engaging in unfair and prohibited business practices
they are agreeing to unreasonable restraint of trade in insurance business, and they are
engaging in unfair discrimination
which of the following is NOT a remedy available to the PA commissioner of insurance for
committing an unfair method of competition?
,-imprisonment
-cease and desist order
-suspension of license
-revocation of license - Answer: imprisonment is not a punishment for committing an unfair
method of competition
you cannot be arrested for committing an unfair method of competition
which of the following is NOT an unfair claims settlement practice if committed by an insurance
company in PA?
-failing to promptly acknowledge communications about claims
-failing to promptly settle a claim for which liability is uncertain
-appealing from an arbitration award in favor of an insured to compel the insured to accept a
lower settlement
-failing to affirm or deny coverage within a reasonable time after completing a claim
investigation - Answer: ailing to promptly settle a claim for which liability is uncertain is NOT an
unfair claims settlement practice
Jeff is a licensed insurance producer in both PA and NY. he is charged with embezzlement in NY,
and his first pretrial hearing is set for March 1. He must notify the PA commissioner of insurance
within how many days of this hearing? - Answer: Jeff has 30 days to notify the PA commissioner
of insurance of the disciplinary action being taken against him
which of the following is NOT an unfair claims settlement practice if committed by an insurance
company in PA?
-failing to promptly acknowledge communications about claims
-failing to promptly settle a claim for which liability is uncertain
, -offering to settle claims for less than due to encourage litigation
-raising policy defenses to reduce a claim - Answer: failing to promptly settle a claim for which
liability is uncertain is not an unfair claims settlement practice
Stacy is a captive agent for best rates insurance company. Her agency contract gives her
permission to print and use business cards with the company's logo and submit applications for
its policy. What type of authority does stacy have to take these actions? - Answer: Stacy has
express authority due to the contract between her and the insurance company specifically
allowing her act in such a way
to boost her sales at the end of the year, agent Trudy started offering potential clients a $250
cash gift card in exchange for purchasing a life insurance policy. which ethical sales practice has
she violated?
-twisting
-churning
-rebating
-false information - Answer: rebating
its illegal to offer gifts in exchange for the purchase of an insurance policy
which of the following is not a power granted to the PA commissioner of insurance?
-licensing producers and companies
-enforcing insurance laws
-issuing regulations to administer insurance laws
-prosecuting individuals for violating insurance laws - Answer: the PA commissioner of insurance
CANNOT prosecute individuals for violating insurance laws
