ALABAMA INSURANCE EVALUATION EXAM 2025/2026
QUESTIONS WITH SOLUTIONS RATED A+
✔✔Stock insurance company - ✔✔Company owned by stockholders
✔✔Mutual insurance company - ✔✔Company owned by policy owners
✔✔Nonparticipating policies - ✔✔Policies where owners do not share in profits
✔✔Participating policies - ✔✔Policies where owners share in profits
✔✔Incompetent management - ✔✔Management lacking necessary skills and
trustworthiness
✔✔Insurance producer - ✔✔Individual selling insurance on behalf of companies
✔✔Producer licensing - ✔✔Process to ensure competence and trustworthiness
✔✔Pre-licensing course - ✔✔Required education before licensing
✔✔State exam - ✔✔Exam to test knowledge for licensing
✔✔Resident producer license - ✔✔License for producers residing in the state
✔✔Exemption from pre-licensing course - ✔✔Waiver for individuals with insurance
degrees
✔✔Nonresident producer license - ✔✔License for producers from another state
✔✔Business entity producer license - ✔✔License for insurance agencies
✔✔Limited lines producer license - ✔✔License for specific lines of insurance
✔✔License renewal - ✔✔Process to extend the validity of a license
✔✔Continuing education - ✔✔Ongoing education requirements for license renewal
✔✔Controlled business - ✔✔Policies written on individuals with influence over
✔✔Commissions from unlicensed individuals - ✔✔Payment or acceptance of
commissions from unlicensed individuals
, ✔✔Refund of fees upon policy cancellation - ✔✔Return of prorated fee upon
cancellation
✔✔Fiduciary responsibility - ✔✔Obligation to handle funds in a trustworthy manner
✔✔Premium fund trust account - ✔✔Account for holding funds received from applicants
or policy owners
✔✔Soliciting insurance producer's name - ✔✔Name of the producer on the application
✔✔Reporting felony conviction - ✔✔Informing the Commissioner of a felony conviction
✔✔Record-keeping requirements - ✔✔Obligation to keep records for a specified period
✔✔Agent appointment - ✔✔Authorization for a producer to act on behalf of an insurer
✔✔Appointment notice - ✔✔Notification of an agent's appointment to the Department of
Insurance
✔✔Termination of agent appointment - ✔✔Cancellation of an agent's authorization
✔✔Prohibited sales and marketing practices - ✔✔Illegal practices related to insurance
sales and marketing
✔✔False statements about insurance policies - ✔✔Misrepresenting policy terms or
benefits
✔✔False advertising of insurance products - ✔✔Publishing misleading information
about insurance coverage
✔✔False statements about an insurance company - ✔✔Making false statements to
harm an insurer's reputation
✔✔Boycott, coercion, or intimidation - ✔✔Illegal acts to restrain or monopolize
insurance business
✔✔False financial statement - ✔✔Publishing false financial information
✔✔Unfair discrimination - ✔✔Discrimination in insurance practices
✔✔Offering inducements - ✔✔Providing incentives to induce insurance purchases
✔✔Twisting - ✔✔Inducing policyowners to switch policies
QUESTIONS WITH SOLUTIONS RATED A+
✔✔Stock insurance company - ✔✔Company owned by stockholders
✔✔Mutual insurance company - ✔✔Company owned by policy owners
✔✔Nonparticipating policies - ✔✔Policies where owners do not share in profits
✔✔Participating policies - ✔✔Policies where owners share in profits
✔✔Incompetent management - ✔✔Management lacking necessary skills and
trustworthiness
✔✔Insurance producer - ✔✔Individual selling insurance on behalf of companies
✔✔Producer licensing - ✔✔Process to ensure competence and trustworthiness
✔✔Pre-licensing course - ✔✔Required education before licensing
✔✔State exam - ✔✔Exam to test knowledge for licensing
✔✔Resident producer license - ✔✔License for producers residing in the state
✔✔Exemption from pre-licensing course - ✔✔Waiver for individuals with insurance
degrees
✔✔Nonresident producer license - ✔✔License for producers from another state
✔✔Business entity producer license - ✔✔License for insurance agencies
✔✔Limited lines producer license - ✔✔License for specific lines of insurance
✔✔License renewal - ✔✔Process to extend the validity of a license
✔✔Continuing education - ✔✔Ongoing education requirements for license renewal
✔✔Controlled business - ✔✔Policies written on individuals with influence over
✔✔Commissions from unlicensed individuals - ✔✔Payment or acceptance of
commissions from unlicensed individuals
, ✔✔Refund of fees upon policy cancellation - ✔✔Return of prorated fee upon
cancellation
✔✔Fiduciary responsibility - ✔✔Obligation to handle funds in a trustworthy manner
✔✔Premium fund trust account - ✔✔Account for holding funds received from applicants
or policy owners
✔✔Soliciting insurance producer's name - ✔✔Name of the producer on the application
✔✔Reporting felony conviction - ✔✔Informing the Commissioner of a felony conviction
✔✔Record-keeping requirements - ✔✔Obligation to keep records for a specified period
✔✔Agent appointment - ✔✔Authorization for a producer to act on behalf of an insurer
✔✔Appointment notice - ✔✔Notification of an agent's appointment to the Department of
Insurance
✔✔Termination of agent appointment - ✔✔Cancellation of an agent's authorization
✔✔Prohibited sales and marketing practices - ✔✔Illegal practices related to insurance
sales and marketing
✔✔False statements about insurance policies - ✔✔Misrepresenting policy terms or
benefits
✔✔False advertising of insurance products - ✔✔Publishing misleading information
about insurance coverage
✔✔False statements about an insurance company - ✔✔Making false statements to
harm an insurer's reputation
✔✔Boycott, coercion, or intimidation - ✔✔Illegal acts to restrain or monopolize
insurance business
✔✔False financial statement - ✔✔Publishing false financial information
✔✔Unfair discrimination - ✔✔Discrimination in insurance practices
✔✔Offering inducements - ✔✔Providing incentives to induce insurance purchases
✔✔Twisting - ✔✔Inducing policyowners to switch policies
