ACE Regulatory Compliance & Law 3

Question 1

The NAIC's Insurance Data Security Model Law is primarily designed to address:

Accepted Answer

Cybersecurity requirements for insurance licensees

Answer

The NAIC Insurance Data Security Model Law establishes standards for data security programs and breach notification for insurance licensees.

Question 2

Which cancellation reason typically requires the longest advance notice to the insured under state statutes?

Accepted Answer

Mid-term nonrenewal of a personal auto policy

Answer

Nonrenewal notices generally require longer advance notice (often 30–60 days) than mid-term cancellations for nonpayment, which may only require 10 days.

Question 3

In ACORD XML transactions, what does the term 'schema validation' ensure?

Accepted Answer

That the data conforms to the agreed-upon structure and data types

Answer

Schema validation checks that XML transaction data conforms to the ACORD-defined structure, required elements, and data types.

Question 4

What is the primary purpose of a 'Market Conduct Examination' conducted by a state insurance department?

Accepted Answer

To evaluate insurer practices in sales, underwriting, and claims handling

Answer

Market conduct examinations review an insurer's business practices—such as sales, underwriting, and claims—to ensure compliance with state laws protecting consumers.

Question 5

Under the NAIC Producer Licensing Model Act, a producer who moves to a new state may obtain a nonresident license through:

Accepted Answer

Reciprocal licensing based on their home state license

Answer

Reciprocal licensing allows producers licensed in their home state to obtain nonresident licenses in other states without retaking exams, provided those states have reciprocity agreements.

(ACE) ACORD Certified Expert Practice Test

(ACE) ACORD Certified Expert Practice Test

ACE Regulatory Compliance & Law 3