P&C State-Specific Laws and Rules 2

Question 1

When a property and casualty insurance policy is non-renewed by the insurer at expiration, state law generally requires the insurer to provide the insured with advance written notice of at least:

Accepted Answer

30–60 days (varies by state and line of coverage)

Answer

Most states require insurers to give policyholders at least 30 to 60 days advance written notice of non-renewal, allowing time to find replacement coverage; the exact period varies by state and coverage type.

Question 2

State insurance regulators have the authority to conduct 'market conduct examinations' of insurers to:

Accepted Answer

Review an insurer's sales, underwriting, rating, claims handling, and policyholder service practices for compliance with state laws

Answer

Market conduct examinations allow state insurance departments to audit an insurer's business practices to ensure compliance with laws governing rate adequacy, claims handling, sales practices, and policy forms.

Question 3

Under state insurance law, a 'free-look' period for property and casualty policies is most commonly:

Accepted Answer

Not universally required for P&C policies in the same way as life/health, but some states mandate a short review period

Answer

Free-look periods are consistently required for life and health insurance but are not uniformly mandated for property and casualty policies; some states require them for specific P&C products, and many insurers offer them voluntarily.

Question 4

State 'file and use' rate regulation for property and casualty insurance means:

Accepted Answer

Insurers may begin using new rates immediately upon filing with the state, without waiting for prior approval

Answer

Under a 'file and use' system, insurers may begin charging the new rate as soon as they file it with the state insurance department, without waiting for approval — though the department may later disapprove an inadequate or excessive rate.

Question 5

Under state insurance codes, the 'grace period' for late premium payment on a property and casualty policy typically:

Accepted Answer

Provides 30–31 days of continued coverage after the due date, after which coverage lapses if premium is not paid

Answer

Many states and standard policy forms provide a short grace period (often 30 days) for late premium payments before coverage is cancelled for non-payment, though P&C grace periods are shorter and less uniform than life insurance grace periods.

Property & Casualty Insurance License Test Practice Test

Property & Casualty Insurance License Test Practice Test

P&C State-Specific Laws and Rules 2