CPCU 530 EXAM WITH COMPLETE
SOLUTIONS GRADED A+
ADEA exceptions regarding mandatory retirement based on age: - Answer-• Executives
in high policy-making positions who are over age 65 and entitled to pension exceeding
minimum amount per year
• Employees over age 70 who are serving under contracts of unlimited tenure at
institutions of higher learning
Age Discrimination in Employment Act (ADEA): Prohibits discrimination on the basis of
age, against person age 40 or older. ADEA addressed 3 legal employment practices: -
Answer-• Employer may establish an age limit on employment if age is a bona fide
occupational qualification (BFOQ)
• An employer may use preference in hiring, promoting, and paying employees if it is
based on "reasonable factors other than age"
• An employer may hire, promote, pay, or dismiss employees according to a bona fide
seniority system as long as the employer does not require retirement based on age
Older workers benefit protection act (OWBPA) - Answer-Allows employers to reduce
benefits to older workers when such "age-based reductions in employee benefit plans
are justified by significant cost considerations" Also allows waivers of rights if done
knowingly and voluntarily
Civil Rights Act of 1964 - Extended protection to include religion and sex. Title VII of the
act lists: - Answer-• Prohibited employment practices
• Permissible employment practices
• Pregnancy discrimination
• Sexual discrimination
• Sex-based insurance rates
Civil rights act of 1866 - Answer-first law prohibiting discriminatory practices in
employment
When does an acceptance occur - Answer-The mailing of an acceptance binds an
insurance contract at the time of mailing, whether or not the other party receives it
Necessary terms in insurance contract: - Answer-1. The type of coverage sought
2. The object or premises, if any to be insured
3. The amount of insurance
4. The insured's name
,5. The duration of coverage
Limited Interests - Answer-Any interests in real property short of legal ownership, such
as lease interests or life estates
Life estate - Answer-Interest in real property for the duration of a person's life
Elements required to establish false representation: - Answer-1. A statement is made
that is false or misleading
2. The statement relates to a material fact
3. The insurer relies on the false or misleading statement in issuing the policy
2 requirements for a warranty: - Answer-1. The parties must have clearly and
unmistakably intended it to be a warranty
2. The statement must form a part of the contract itself
3 Types of Warranties: - Answer-1. Affirmative - States that specific facts exist at the
time the contract forms
2. Continuing (promissory) - States that the parties will do certain things or that certain
conditions will continue to exist during the policy term
3. Implied - An obligation that the courts impose on a seller to warrant certain facts
about a product, even though they are not expressly stated by the seller
Title VII applies to any employer that: - Answer-Employs 15 or more persons in an
industry that affects interstate commerce
Disparate impact theory - Answer-Legal basis for an employment discrimination
complaint requiring the plaintiff to establish that an apparently neutral employment
practice or criterion, applied equally to all individuals, operated to exclude a
disproportionate number of the protected class
Disparate treatment theory - Answer-Legal basis for an employment discrimination
complaint requiring the plaintiff to establish the employer's practice of intentionally
treating individuals differently solely because of their sex, race, color, religion, or
national origin
1991 Civil rights act made the following changes: - Answer-• Broadened the scope of
section 1981 in civil rights act of 1866 to expressly apply to all aspects of the
employment relationship, including hiring and termination
• Amended Title VII and the Americans with Disabilities Act (ADA) to allow plaintiffs to
recover compensatory and punitive damages in suits alleging intentional discrimination
• Allowed for jury trials in cases in which the plaintiff seeks compensatory damages
under Title VII or ADA
, Executive Order 11246 - - Answer-Bans job discrimination on the basis of sex, color,
religion, or national origin and applies to federal contractors and subs who do more than
$10,000 in business with the federal government in a one year period
Equal pay act of 1963 - - Answer-prohibits employers from paying lower wages to
employees of one sex than it pays to those of the other sex for work requiring equal
skill, effort, and responsibility and performed under similar working conditions
2 significant federal laws prohibit discrimination based on disability: - Answer-•
Rehabilitation Act of 1973
• Americans with Disabilities Act (ADA)
Rehabilitation act of 1973 - Answer-Prohibits employers with federal contracts
exceeding $2,500 from discriminating against disabled persons who are otherwise
qualified to fulfill the contract
Americans with Disabilities Act - ADA - Answer-Prohibits discrimination against qualified
individuals with disabilities
First modern labor law - Answer-Norris-LaGuardia Act of 1932.
National Labor Relations Board purpose: - Answer-• To prevent and remedy unfair labor
practices by labor organizations or employers
• To determine whether or not certain groups of employees desire labor organization
representation, and their selection of a union, for collective-bargaining purpose
After employees return the authorization cards, the union has 2 alternatives: - Answer-1.
Union can make a direct request to the employer to initiate collective bargaining if more
than 50% of the employees vote yes on union
2. Union can file representation petition with NLRB. The NLRB will then hold an election
among employees to certify union as authorized labor representative. Union must have
cards signed by at least 30% before it can request election
Collective bargaining is mandatory for: - Answer-wages hours and other terms of
employment
Examples of bad faith in collective bargaining: - Answer-• Refusal by either side to enter
into negotiations on mandatory issues
• Take it or leave it approach by employer from the beginning
• Participation in lengthy series of bargaining conferences with no intention to enter into
agreement
Union economic tactics: - Answer-1. Strike
2. Boycott
3. Picketing
SOLUTIONS GRADED A+
ADEA exceptions regarding mandatory retirement based on age: - Answer-• Executives
in high policy-making positions who are over age 65 and entitled to pension exceeding
minimum amount per year
• Employees over age 70 who are serving under contracts of unlimited tenure at
institutions of higher learning
Age Discrimination in Employment Act (ADEA): Prohibits discrimination on the basis of
age, against person age 40 or older. ADEA addressed 3 legal employment practices: -
Answer-• Employer may establish an age limit on employment if age is a bona fide
occupational qualification (BFOQ)
• An employer may use preference in hiring, promoting, and paying employees if it is
based on "reasonable factors other than age"
• An employer may hire, promote, pay, or dismiss employees according to a bona fide
seniority system as long as the employer does not require retirement based on age
Older workers benefit protection act (OWBPA) - Answer-Allows employers to reduce
benefits to older workers when such "age-based reductions in employee benefit plans
are justified by significant cost considerations" Also allows waivers of rights if done
knowingly and voluntarily
Civil Rights Act of 1964 - Extended protection to include religion and sex. Title VII of the
act lists: - Answer-• Prohibited employment practices
• Permissible employment practices
• Pregnancy discrimination
• Sexual discrimination
• Sex-based insurance rates
Civil rights act of 1866 - Answer-first law prohibiting discriminatory practices in
employment
When does an acceptance occur - Answer-The mailing of an acceptance binds an
insurance contract at the time of mailing, whether or not the other party receives it
Necessary terms in insurance contract: - Answer-1. The type of coverage sought
2. The object or premises, if any to be insured
3. The amount of insurance
4. The insured's name
,5. The duration of coverage
Limited Interests - Answer-Any interests in real property short of legal ownership, such
as lease interests or life estates
Life estate - Answer-Interest in real property for the duration of a person's life
Elements required to establish false representation: - Answer-1. A statement is made
that is false or misleading
2. The statement relates to a material fact
3. The insurer relies on the false or misleading statement in issuing the policy
2 requirements for a warranty: - Answer-1. The parties must have clearly and
unmistakably intended it to be a warranty
2. The statement must form a part of the contract itself
3 Types of Warranties: - Answer-1. Affirmative - States that specific facts exist at the
time the contract forms
2. Continuing (promissory) - States that the parties will do certain things or that certain
conditions will continue to exist during the policy term
3. Implied - An obligation that the courts impose on a seller to warrant certain facts
about a product, even though they are not expressly stated by the seller
Title VII applies to any employer that: - Answer-Employs 15 or more persons in an
industry that affects interstate commerce
Disparate impact theory - Answer-Legal basis for an employment discrimination
complaint requiring the plaintiff to establish that an apparently neutral employment
practice or criterion, applied equally to all individuals, operated to exclude a
disproportionate number of the protected class
Disparate treatment theory - Answer-Legal basis for an employment discrimination
complaint requiring the plaintiff to establish the employer's practice of intentionally
treating individuals differently solely because of their sex, race, color, religion, or
national origin
1991 Civil rights act made the following changes: - Answer-• Broadened the scope of
section 1981 in civil rights act of 1866 to expressly apply to all aspects of the
employment relationship, including hiring and termination
• Amended Title VII and the Americans with Disabilities Act (ADA) to allow plaintiffs to
recover compensatory and punitive damages in suits alleging intentional discrimination
• Allowed for jury trials in cases in which the plaintiff seeks compensatory damages
under Title VII or ADA
, Executive Order 11246 - - Answer-Bans job discrimination on the basis of sex, color,
religion, or national origin and applies to federal contractors and subs who do more than
$10,000 in business with the federal government in a one year period
Equal pay act of 1963 - - Answer-prohibits employers from paying lower wages to
employees of one sex than it pays to those of the other sex for work requiring equal
skill, effort, and responsibility and performed under similar working conditions
2 significant federal laws prohibit discrimination based on disability: - Answer-•
Rehabilitation Act of 1973
• Americans with Disabilities Act (ADA)
Rehabilitation act of 1973 - Answer-Prohibits employers with federal contracts
exceeding $2,500 from discriminating against disabled persons who are otherwise
qualified to fulfill the contract
Americans with Disabilities Act - ADA - Answer-Prohibits discrimination against qualified
individuals with disabilities
First modern labor law - Answer-Norris-LaGuardia Act of 1932.
National Labor Relations Board purpose: - Answer-• To prevent and remedy unfair labor
practices by labor organizations or employers
• To determine whether or not certain groups of employees desire labor organization
representation, and their selection of a union, for collective-bargaining purpose
After employees return the authorization cards, the union has 2 alternatives: - Answer-1.
Union can make a direct request to the employer to initiate collective bargaining if more
than 50% of the employees vote yes on union
2. Union can file representation petition with NLRB. The NLRB will then hold an election
among employees to certify union as authorized labor representative. Union must have
cards signed by at least 30% before it can request election
Collective bargaining is mandatory for: - Answer-wages hours and other terms of
employment
Examples of bad faith in collective bargaining: - Answer-• Refusal by either side to enter
into negotiations on mandatory issues
• Take it or leave it approach by employer from the beginning
• Participation in lengthy series of bargaining conferences with no intention to enter into
agreement
Union economic tactics: - Answer-1. Strike
2. Boycott
3. Picketing
