CIA Regulatory Compliance & Standards 3

Question 1

Under the National Flood Insurance Program (NFIP), which agency administers flood insurance and sets compliance standards for participating communities?

Accepted Answer

The Federal Emergency Management Agency (FEMA)

Answer

FEMA administers the NFIP, which provides flood insurance and requires participating communities to adopt and enforce floodplain management regulations.

Question 2

Which standard governs how appraisers must handle assignment conditions that could be perceived as a conflict of interest?

Accepted Answer

USPAP Ethics Rule — Conduct Section

Answer

The Conduct Section of the USPAP Ethics Rule prohibits appraisers from accepting assignments with conflicts of interest unless properly disclosed and consented to.

Question 3

A state insurance department conducts a market conduct examination on an insurer. What is the primary purpose of such an examination?

Accepted Answer

To verify compliance with state insurance laws and fair treatment of policyholders

Answer

Market conduct examinations evaluate whether insurers are treating policyholders fairly and complying with applicable state statutes and regulations.

Question 4

What is the primary consequence for an insurance appraiser who violates the competency requirements set forth under USPAP?

Accepted Answer

The appraisal may be deemed not credible and the appraiser subject to disciplinary action

Answer

Violating USPAP's Competency Rule can render an appraisal uncredible, and the appraiser may face professional sanctions, civil liability, or license revocation.

Question 5

An insurance appraiser in Texas is hired to value a property in Louisiana but has no prior experience with Louisiana's market. According to USPAP, what must the appraiser do?

Accepted Answer

Accept the assignment but disclose the lack of geographic competency in the report

Answer

USPAP's Competency Rule requires appraisers to disclose lack of knowledge or experience and take steps to acquire the necessary competency before completing the assignment.

(CIA) Certified Insurance Appraiser Practice Test

(CIA) Certified Insurance Appraiser Practice Test

CIA Regulatory Compliance & Standards 3