District of Columbia Insurance Producer License Exam — Questions and Answers

Question 1: How many continuing education (CE) hours must a DC licensed insurance producer complete per renewal period?

30 hours
16 hours
24 hours (Correct answer)
12 hours

Correct answer: 24 hours

DC requires licensed insurance producers to complete 24 hours of continuing education per two-year renewal period.

Question 2: The 'per occurrence' limit in a CGL policy is best described as:

The maximum amount paid per covered business location
The maximum the insurer will pay for any single occurrence regardless of the number of claimants (Correct answer)
The maximum amount paid per individual injured person
The total limit available for all claims during the entire policy period

Correct answer: The maximum the insurer will pay for any single occurrence regardless of the number of claimants

The per occurrence limit caps the insurer's payment for all claims arising from one single occurrence, no matter how many claimants are involved.

Question 3: What is 'controlled business' in DC insurance licensing, and why is it restricted?

Insurance sold to businesses; restricted to commercial lines producers only
Insurance sold primarily to the producer's own family or employer; restricted to prevent licensing solely for personal gain (Correct answer)
Insurance sold to DC government entities; restricted due to procurement rules
Insurance sold through controlled agency plants; restricted to protect independent agents

Correct answer: Insurance sold primarily to the producer's own family or employer; restricted to prevent licensing solely for personal gain

Controlled business is insurance placed primarily for the producer's own benefit (covering themselves, family, or employer). DC limits this to prevent people from obtaining a license solely to earn commissions on their own coverage.

Question 4: Which of the following is considered an unfair trade practice under DC insurance law?

Offering a premium discount for prompt payment
Recommending a higher-coverage policy to a client
Disclosing all exclusions to a prospect
Misrepresenting the terms of a policy to induce a sale (Correct answer)

Correct answer: Misrepresenting the terms of a policy to induce a sale

Misrepresentation of policy terms is a classic unfair trade practice under DC's Unfair Trade Practices Act.

Question 5: What does comprehensive auto coverage protect against?

Bodily injury to third parties
Medical expenses after an accident
Collision with another vehicle only
Non-collision losses such as theft, fire, and weather (Correct answer)

Correct answer: Non-collision losses such as theft, fire, and weather

Comprehensive coverage covers losses not caused by collision, including theft, vandalism, fire, hail, and animal strikes.

Question 6: A DC disability income policy's 'waiver of premium' provision means:

Premiums are reduced by 50% after age 65
Premiums are waived while the insured is receiving disability benefits after a qualifying waiting period (Correct answer)
The insurer waives its right to contest the policy after two years
The insured never has to pay premiums for the policy

Correct answer: Premiums are waived while the insured is receiving disability benefits after a qualifying waiting period

The waiver of premium provision suspends the insured's obligation to pay premiums while they are receiving disability benefits, typically after a 90-day waiting period.

Question 7: The insurer's 'duty to defend' under a CGL policy means:

The insurer must defend the insured against covered claims even if the allegations are groundless or fraudulent (Correct answer)
The insured must retain and pay for counsel before the insurer will reimburse costs
The duty terminates automatically once the per occurrence limit has been paid out
The insurer pays defense costs only after the insured is found legally liable

Correct answer: The insurer must defend the insured against covered claims even if the allegations are groundless or fraudulent

The duty to defend is broader than the duty to indemnify; the insurer must provide a defense for covered claims regardless of whether the allegations will ultimately succeed.

Question 8: What DC government agency is responsible for regulating insurance companies and licensing insurance producers?

DC Department of Health
DC Office of the Attorney General
DC Department of Insurance, Securities and Banking (DISB) (Correct answer)
DC Department of Consumer and Regulatory Affairs (DCRA)

Correct answer: DC Department of Insurance, Securities and Banking (DISB)

The DC Department of Insurance, Securities and Banking (DISB) regulates all insurance activity in the District of Columbia.

Question 9: Which act requires insurers to provide policyholders with a notice of their privacy practices?

Gramm-Leach-Bliley Act (GLBA) (Correct answer)
HIPAA
Fair Credit Reporting Act (FCRA)
Sarbanes-Oxley Act

Correct answer: Gramm-Leach-Bliley Act (GLBA)

The Gramm-Leach-Bliley Act (GLBA) requires financial institutions, including insurers, to provide privacy notices and restrict sharing of nonpublic personal information.

Question 10: A health maintenance organization (HMO) plan reduces costs by promoting?

Preventative care (Correct answer)
Generic care
Fee for service care
After-hours care

Correct answer: Preventative care

Health Maintenance Organizations (HMOs) primarily reduce costs by emphasizing and promoting preventative care. By focusing on regular check-ups, screenings, and health education, HMOs aim to keep members healthy and detect potential health issues early, before they become more serious and expensive to treat. This proactive approach minimizes the need for costly hospitalizations and specialized treatments, leading to overall lower healthcare expenditures.

Question 11: Products-completed operations coverage under a CGL policy applies to:

Products stored in a warehouse before they are sold
Raw materials purchased during the manufacturing process
Products or completed work after they have left the insured's control (Correct answer)
Work still being actively performed on the job site

Correct answer: Products or completed work after they have left the insured's control

Products-completed operations coverage applies to bodily injury or property damage arising from the insured's products or finished work after they have been sold, delivered, or the job has been completed.

Question 12: A DC insurer consistently denies valid claims to boost profits. This pattern could expose the insurer to which legal action beyond regulatory fines?

A mandatory audit by the Federal Insurance Office
Only DISB administrative action
A DISB-mandated rate reduction
A bad faith lawsuit with potential punitive damages (Correct answer)

Correct answer: A bad faith lawsuit with potential punitive damages

Insurers who engage in a pattern of bad faith claims denial can face civil lawsuits from policyholders seeking compensatory and punitive damages beyond the policy limits.

Question 13: In DC, replacing an existing life insurance policy with a new one requires the agent to:

Cancel the old policy before the new one is issued
Provide the applicant with a Notice Regarding Replacement (Correct answer)
Collect two years of premium in advance
Obtain approval from the DC Insurance Commissioner before issuing the new policy

Correct answer: Provide the applicant with a Notice Regarding Replacement

DC replacement regulations require the agent to give the applicant a Notice Regarding Replacement so they can make an informed comparison.

Question 14: Which of the following statements concerning Business Auto Liability coverage are correct?

It only covers sums for which the insured is legally liable.
The BI or PD must result from the ownership, maintenance, or use of a covered auto.
It covers BI or PD caused by an accident.
A,C and D (Correct answer)
It does not cover pollution losses.

Correct answer: A,C and D

Business Auto Liability coverage is designed to protect the insured against financial losses from accidents involving covered autos. It covers bodily injury (BI) or property damage (PD) caused by an accident, but only for sums for which the insured is legally liable. Crucially, the BI or PD must result from the ownership, maintenance, or use of a covered auto, and it generally excludes pollution losses unless specifically endorsed.

Question 15: How do rights of an irrevocable beneficiary differ from those of a revocable beneficiary?

A revocable beneficiary can become the policy owner at any time by paying the premiums
An irrevocable beneficiary has a vested right that neither the policy owner nor his creditors can impair without the beneficiary's consent (Correct answer)
An irrevocable beneficiary has the right to name a contingent beneficiary for the policy
An irrevocable beneficiary may be changed by the policy owner without the beneficiary's consent

Correct answer: An irrevocable beneficiary has a vested right that neither the policy owner nor his creditors can impair without the beneficiary's consent

An irrevocable beneficiary holds a vested right in the life insurance policy, meaning their claim to the policy's benefits cannot be altered or revoked by the policy owner without their explicit consent. This vested interest protects the beneficiary's rights, preventing the policy owner from changing beneficiaries, surrendering the policy, or taking out loans against it unilaterally. Furthermore, this right often shields the policy proceeds from the policy owner's creditors, ensuring the death benefit is paid to the designated beneficiary.

Question 16: Under DC tax rules, annuity earnings grow on a tax-deferred basis until withdrawn or distributed. When funds are withdrawn, they are generally taxed as:

Ordinary income (Correct answer)
DC local tax only, not federal income tax
Tax-free income because annuities are insurance products
Capital gains at the preferential long-term rate

Correct answer: Ordinary income

Annuity earnings are taxed as ordinary income when distributed because the IRS treats them as income, not as capital gains.

Question 17: What is the purpose of an umbrella liability policy that a DC homeowner might purchase?

To cover flood and earthquake losses excluded from the homeowners policy
To provide excess liability coverage above the limits of underlying home and auto policies (Correct answer)
To replace the homeowners policy with broader coverage
To insure scheduled personal property at agreed value

Correct answer: To provide excess liability coverage above the limits of underlying home and auto policies

An umbrella policy provides additional liability protection above and beyond the limits of the homeowners and auto liability policies.

Question 18: A DC insurance producer license must be renewed every how many years?

5 years
3 years
1 year
2 years (Correct answer)

Correct answer: 2 years

DC insurance producer licenses must be renewed every two years.

Question 19: Which of the following individuals is NOT required to hold a DC insurance producer license?

An agent selling life insurance policies
A broker placing commercial property coverage for a DC corporation
A salaried employee of an insurer who only takes applications for the employer's policies (Correct answer)
A person selling variable annuities to DC residents

Correct answer: A salaried employee of an insurer who only takes applications for the employer's policies

Salaried employees of an insurer who solicit insurance solely on behalf of that employer may qualify for an exemption from licensure requirements in some states, including DC.

Question 20: Which standardized Medigap plan in DC offers the most comprehensive coverage, including all gaps in Original Medicare?

Plan G (for those newly eligible after Jan 1, 2020) (Correct answer)
Plan A
Plan K
Plan C or Plan F (for those eligible before Jan 1, 2020)

Correct answer: Plan G (for those newly eligible after Jan 1, 2020)

For beneficiaries newly eligible for Medicare after January 1, 2020, Plan G is the most comprehensive Medigap plan available, covering all gaps except the Part B deductible.

Question 21: Under the Nonadmitted and Reinsurance Reform Act (NRRA), which state's surplus lines law and taxes govern a multi-state risk?

The state where the insurance contract is signed
The state where the insurer is domiciled
The state where the surplus lines broker is licensed
The home state of the insured (the state where the greatest percentage of the insured's risk is located) (Correct answer)

Correct answer: The home state of the insured (the state where the greatest percentage of the insured's risk is located)

Under NRRA, the home state of the insured (where the greatest portion of the risk is located) has sole regulatory and taxing authority over surplus lines placements.

Question 22: What is the 'Medicare Part B excess charges' benefit covered by Medigap Plan G in DC?

The amount a non-participating doctor can charge above Medicare-approved rates (up to 15%) (Correct answer)
The 20% Part B coinsurance
The Part A hospital deductible
The Medicare Part B annual deductible

Correct answer: The amount a non-participating doctor can charge above Medicare-approved rates (up to 15%)

Part B excess charges are the additional amounts (up to 15% above Medicare rates) that non-participating providers may bill; Plan G covers these charges.

Question 23: The 'accumulation phase' of a DC deferred annuity refers to:

The period during which premiums are paid and interest or investment gains accumulate on a tax-deferred basis (Correct answer)
The one-year period after the annuity is issued before surrender charges begin
The period during which the annuitant receives income payments
The period during which the insurer calculates the annuity's mortality tables

Correct answer: The period during which premiums are paid and interest or investment gains accumulate on a tax-deferred basis

During the accumulation phase, premiums are deposited and earnings grow tax-deferred until the contract owner decides to annuitize or take withdrawals.

Question 24: A DC surplus lines broker receives a quote from a non-admitted insurer for a hard-to-place risk. Before binding, the broker must verify which of the following?

That the insurer's CEO is personally licensed in DC
That the premium is below $500,000
That the insurer has reinsurance from a US-domiciled company
That the non-admitted insurer appears on DISB's eligible surplus lines insurer list (Correct answer)

Correct answer: That the non-admitted insurer appears on DISB's eligible surplus lines insurer list

DC surplus lines brokers may only place business with non-admitted insurers that appear on DISB's list of eligible surplus lines insurers.

Question 25: A DC insurance producer who sells a policy to a client and then keeps part of the premium instead of remitting it to the insurer has committed:

Twisting
Rebating
Embezzlement / misappropriation of funds (Correct answer)
Churning

Correct answer: Embezzlement / misappropriation of funds

Keeping premium funds rather than remitting them to the insurer constitutes embezzlement or misappropriation—a serious insurance crime.

Question 26: A DC restaurant owner's liquor liability coverage would respond to which of the following claims?

A food poisoning claim by a customer
A kitchen fire caused by a gas leak
A slip-and-fall by a customer in the bathroom
A customer suing the restaurant for serving alcohol to a visibly intoxicated patron who then caused a car accident (Correct answer)

Correct answer: A customer suing the restaurant for serving alcohol to a visibly intoxicated patron who then caused a car accident

Liquor liability (Dram Shop) insurance covers claims arising from the insured's sale or service of alcohol to an intoxicated patron who then causes injury to a third party.

Question 27: What is 'twisting' in DC insurance law?

Refusing to pay a legitimate claim
Altering policy terms without the insured's consent
Charging different premiums based on protected class status
Inducing a policyholder to drop an existing policy by misrepresenting the new policy's benefits (Correct answer)

Correct answer: Inducing a policyholder to drop an existing policy by misrepresenting the new policy's benefits

Twisting involves inducing a policyholders to replace an existing policy through misrepresentation or incomplete comparisons.

Question 28: A DC contractor's commercial general liability policy includes 'completed operations' coverage. This covers claims arising from:

Employee injuries during construction work
Injuries or damage that occur after a project is finished and the contractor has left the site (Correct answer)
Disputes over the contract price
Damage to the contractor's tools and equipment

Correct answer: Injuries or damage that occur after a project is finished and the contractor has left the site

Completed operations coverage protects contractors from liability for injury or damage that arises after a job is done and the contractor has left the premises.

Question 29: The first Blue Cross policy was introduced by?

Harvard University in Cambridge, Massachusetts
Baylor University in Dallas Texas (Correct answer)
American Medical Association Representatives
Kaiser Permanente in Los Angelas

Correct answer: Baylor University in Dallas Texas

The first Blue Cross policy was introduced by Baylor University in Dallas, Texas, in 1929. This initiative was designed to help teachers afford hospital care by prepaying a small monthly fee for up to 21 days of hospitalization. This innovative plan laid the groundwork for the modern Blue Cross system, emphasizing community-based, prepaid hospital services.

Question 30: A DC life insurance applicant intentionally misrepresents a material fact on the application. What is the likely consequence?

The insurer may void the policy for material misrepresentation (Correct answer)
The insurer must honor the claim regardless
The policy premium is increased
The policy is automatically converted to term

Correct answer: The insurer may void the policy for material misrepresentation

Material misrepresentation on a life insurance application allows the insurer to rescind the policy, especially within the contestability period.

District of Columbia Insurance Producer License Exam

The DC insurance producer licensing exam tests knowledge of insurance products, policy provisions, terms and concepts (General Knowledge) and District of Columbia state laws, rules, and regulations (DC-Specific) required to obtain a producer license from the DC Department of Insurance, Securities and Banking.

Questions

120 min

Time Limit

70%

To Pass

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Exam Rules

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No feedback shown until you submit the entire exam
Unanswered questions count as wrong — answer everything
10 pretest questions are mixed in and don't affect your score
Timer auto-submits when time runs out
Your progress is auto-saved every 30 seconds

These practice questions were written with AI tools. They are not real exam questions. Exam facts are checked against the official sources listed below. Not reviewed by a subject-matter expert. Editorial policy

Sources & references

Exam facts on this page (fees, format, dates, passing scores) are checked against these official sources; the date is our last check. Editorial policy

disb.dc.gov — Eligibility · verified Oct 2026
pearsonvue.com — Exam format, exam information · verified Oct 2026
pearsonvue.com — Test delivery, fees, passing score · verified Oct 2026