Insurance Regulation and Licensing Flashcards
6 cards from real P&C practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Insurance Regulation and Licensing flashcards as text
Which of the following is a valid reason for a state insurance department to deny a producer's license application?
Answer: The applicant was convicted of a felony involving dishonesty within the past 10 years
A conviction for a felony involving dishonesty or breach of trust is a standard statutory ground for denial of an insurance producer license in most states.
A 'surplus lines' insurer is one that:
Answer: Is not licensed (non-admitted) in the state but may write unusual or hard-to-place risks through licensed surplus lines brokers
Surplus lines insurers are non-admitted carriers that are permitted to write risks that the admitted market is unable or unwilling to insure, using the services of specially licensed surplus lines brokers.
Continuing education (CE) requirements for insurance producers are designed to:
Answer: Ensure producers remain current on insurance laws, products, and ethical standards
CE requirements ensure that licensed producers stay current on state law changes, new insurance products, and ethical standards throughout their careers, protecting consumers from outdated advice.
Which of the following describes a 'captive agent'?
Answer: An agent who represents only one insurer or insurer group exclusively
A captive (or exclusive) agent represents only one insurance company or group and sells only that company's products, unlike an independent agent who can place business with multiple insurers.
What is a 'certificate of insurance'?
Answer: A document summarizing coverage information, issued as evidence of insurance to third parties, but not modifying the underlying policy
A certificate of insurance is an informational document that summarizes key coverage details for the benefit of third parties (such as certificate holders), but it is not a policy and cannot expand or restrict the actual coverage.
Under most state insurance codes, an insurance producer's license may be suspended or revoked for:
Answer: Misrepresenting policy terms, misappropriating premiums, or engaging in unfair trade practices
Common statutory grounds for license suspension or revocation include misrepresentation, fraud, misappropriation of funds, and unfair trade practices — all of which harm consumers and the integrity of the insurance market.