P&C Insurance Regulation and Licensing 2

Question 1

Which of the following is a valid reason for a state insurance department to deny a producer's license application?

Accepted Answer

The applicant was convicted of a felony involving dishonesty within the past 10 years

Answer

The applicant is over 30 years old

Answer

The applicant does not hold a college degree

Answer

The applicant works for more than one insurer

Question 2

A 'surplus lines' insurer is one that:

Accepted Answer

Is not licensed (non-admitted) in the state but may write unusual or hard-to-place risks through licensed surplus lines brokers

Answer

Is licensed and admitted to do business in the state

Answer

Must charge rates lower than the admitted market

Answer

Can only write personal lines coverage

Question 3

Continuing education (CE) requirements for insurance producers are designed to:

Accepted Answer

Ensure producers remain current on insurance laws, products, and ethical standards

Answer

Generate revenue for the state insurance department

Answer

Qualify producers to sell securities products

Answer

Replace the initial licensing exam for renewals

Question 4

Which of the following describes a 'captive agent'?

Accepted Answer

An agent who represents only one insurer or insurer group exclusively

Answer

An agent who is licensed in multiple states

Answer

An agent who specializes in surplus lines

Answer

An agent who is also a licensed attorney

Question 5

What is a 'certificate of insurance'?

Accepted Answer

A document summarizing coverage information, issued as evidence of insurance to third parties, but not modifying the underlying policy

Answer

The original policy document given to the named insured

Answer

A government-issued license to sell insurance

Answer

A guaranty fund certificate proving the insurer is solvent

Question 6

Under most state insurance codes, an insurance producer's license may be suspended or revoked for:

Accepted Answer

Misrepresenting policy terms, misappropriating premiums, or engaging in unfair trade practices

Answer

Selling too many policies in a single year

Answer

Referring clients to a licensed attorney for coverage questions

Answer

Failing to respond to a client's email within 24 hours