PNC LICENSE REVIEW | PERSONAL LINES |
COMPREHENSIVE EXAM PREP, PRACTICE
QUESTIONS, CORRECT ANSWERS AND
STUDY GUIDE
| GRADED A+ | GUARANTEED SUCCESS
Updated 2026 Questions and Answers
100% Verified Exam Prep
,Coverage is also available from government insurers or Residual Market
through a _______ as a last resort.
There are multiple types of private insurers. A _______ is owned Stock insurer
by its stockholders.
A _______ is owned by its policyholders. Mutual insurer
Insurance purchased by insurance companies to protect Reinsurance
themselves against catastrophic loss is called _______.
A _______ is one organized under the laws of a given state. domestic insurer
A _______ is organized under the laws of another state, district, foreign insurer
or territory.
An _______ is organized outside of the United States. alien insurer
An insurer is said to be _______ in a given state if it is issued a Admitted
certificate of authority by that state's department of insurance.
Unauthorized or _______ insurers that are permitted to write Non-admitted
policies on risks that admitted insurers cannot underwrite are
called surplus lines insurers.
Insurers use _______ to select risks that fall into the normal range underwriters
of the insurer's expected losses.
The primary source of information is the _______. Insurance application
The underwriter uses it and other information sources to insurability
check for the applicant's _______.
A(n) _______ transacts insurance on behalf of an insurer. Agent
broker Broker
A(n) _______ transacts insurance on behalf of an insured.
,law of agency Law of agency
An agent is granted authority to represent the insurer under
the _______, which assigns responsibility to the insurer for the
agent's contractual acts.
An agent has a _______ to handle the funds of others. fiduciary duty
Authority that is written in the agency contract is called _______. express authority
Authority that is presumed or interpreted based on the agent's implied authority
actions is called _______.
Authority that arises when the insurer does not act to stop an apparent authority
agent from exceeding contractual authority is called _______. All
three are equally binding.
The business of insurance is regulated on the _______. state level
State insurance laws are made by the legislative branch and Commissioner, Director, or Superintendent of Insurance
enforced by the executive branch, represented by the _______.
The insurance industry is still subject to certain federal Fair credit reporting act
regulations as well. The _______ protects the privacy of consumer
credit information by regulating the ways insurers collect, use,
and store credit reports.
The _______ provides consumers with the legal right to opt out of Gramm-Leach-Bliley Act (GLBA)
information sharing and requires insurers to provide privacy
notices at the time the customer relationship is established
and annually thereafter.
The _______ is a temporary program to provide reinsurance for Terrorism Risk Insurance Act (TRIA)
losses arising from the peril of terrorism, which is generally
too catastrophic to be covered in the private market. The act
is designed to protect the public and only applies to
commercial property and casualty insurance, including excess
insurance and Workers' Compensation.
, The TRIA act does not apply to _______ coverage, commercial federal crop and federal flood
auto insurance, or surety insurance
The Terrorism Insurance Program is administered by the _______, secretary of treasury
who determines what is considered an act of terrorism.
Contract an agreement between two or more parties that is enforceable by law.
Competent Parties In order to be valid, the contract must be made by _______ who have legal capacity to enter
into the contract.
The contract must be entered into for a _______ in good faith. legal purpose
The contract must include an _______ composed of an offer and agreement
acceptance.
The contract must also include the exchange of value, known consideration
as _______.
insurer writes the contract on a take-it-or-leave-it basis, but contracts of adhesion
any ambiguities in the contract will be interpreted in favor of
the insured.
aleatory contracts the uncertainty of loss means there will be an unequal exchange of value.
misrepresentations false statements contained in the application. (doesn't void a policy contract though)
representations, warranties statements made by the applicant on the application that are believed to be true at the
time of application. These are different from _______, which are guaranteed to be true.
void Material misrepresentations and breached warranties may _______ the policy.
material If a representation or misrepresentation affects the insurer's acceptance of the risk, it is
said to be _______.
certificate of insurance (COI) Evidence that insurance coverage at certain amounts is in place is provided by a _______.
COMPREHENSIVE EXAM PREP, PRACTICE
QUESTIONS, CORRECT ANSWERS AND
STUDY GUIDE
| GRADED A+ | GUARANTEED SUCCESS
Updated 2026 Questions and Answers
100% Verified Exam Prep
,Coverage is also available from government insurers or Residual Market
through a _______ as a last resort.
There are multiple types of private insurers. A _______ is owned Stock insurer
by its stockholders.
A _______ is owned by its policyholders. Mutual insurer
Insurance purchased by insurance companies to protect Reinsurance
themselves against catastrophic loss is called _______.
A _______ is one organized under the laws of a given state. domestic insurer
A _______ is organized under the laws of another state, district, foreign insurer
or territory.
An _______ is organized outside of the United States. alien insurer
An insurer is said to be _______ in a given state if it is issued a Admitted
certificate of authority by that state's department of insurance.
Unauthorized or _______ insurers that are permitted to write Non-admitted
policies on risks that admitted insurers cannot underwrite are
called surplus lines insurers.
Insurers use _______ to select risks that fall into the normal range underwriters
of the insurer's expected losses.
The primary source of information is the _______. Insurance application
The underwriter uses it and other information sources to insurability
check for the applicant's _______.
A(n) _______ transacts insurance on behalf of an insurer. Agent
broker Broker
A(n) _______ transacts insurance on behalf of an insured.
,law of agency Law of agency
An agent is granted authority to represent the insurer under
the _______, which assigns responsibility to the insurer for the
agent's contractual acts.
An agent has a _______ to handle the funds of others. fiduciary duty
Authority that is written in the agency contract is called _______. express authority
Authority that is presumed or interpreted based on the agent's implied authority
actions is called _______.
Authority that arises when the insurer does not act to stop an apparent authority
agent from exceeding contractual authority is called _______. All
three are equally binding.
The business of insurance is regulated on the _______. state level
State insurance laws are made by the legislative branch and Commissioner, Director, or Superintendent of Insurance
enforced by the executive branch, represented by the _______.
The insurance industry is still subject to certain federal Fair credit reporting act
regulations as well. The _______ protects the privacy of consumer
credit information by regulating the ways insurers collect, use,
and store credit reports.
The _______ provides consumers with the legal right to opt out of Gramm-Leach-Bliley Act (GLBA)
information sharing and requires insurers to provide privacy
notices at the time the customer relationship is established
and annually thereafter.
The _______ is a temporary program to provide reinsurance for Terrorism Risk Insurance Act (TRIA)
losses arising from the peril of terrorism, which is generally
too catastrophic to be covered in the private market. The act
is designed to protect the public and only applies to
commercial property and casualty insurance, including excess
insurance and Workers' Compensation.
, The TRIA act does not apply to _______ coverage, commercial federal crop and federal flood
auto insurance, or surety insurance
The Terrorism Insurance Program is administered by the _______, secretary of treasury
who determines what is considered an act of terrorism.
Contract an agreement between two or more parties that is enforceable by law.
Competent Parties In order to be valid, the contract must be made by _______ who have legal capacity to enter
into the contract.
The contract must be entered into for a _______ in good faith. legal purpose
The contract must include an _______ composed of an offer and agreement
acceptance.
The contract must also include the exchange of value, known consideration
as _______.
insurer writes the contract on a take-it-or-leave-it basis, but contracts of adhesion
any ambiguities in the contract will be interpreted in favor of
the insured.
aleatory contracts the uncertainty of loss means there will be an unequal exchange of value.
misrepresentations false statements contained in the application. (doesn't void a policy contract though)
representations, warranties statements made by the applicant on the application that are believed to be true at the
time of application. These are different from _______, which are guaranteed to be true.
void Material misrepresentations and breached warranties may _______ the policy.
material If a representation or misrepresentation affects the insurer's acceptance of the risk, it is
said to be _______.
certificate of insurance (COI) Evidence that insurance coverage at certain amounts is in place is provided by a _______.
