State-Specific Laws and Rules 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 State-Specific Laws and Rules flashcards as text
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:
Answer: 30–60 days (varies by state and line of coverage)
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.
State insurance regulators have the authority to conduct 'market conduct examinations' of insurers to:
Answer: Review an insurer's sales, underwriting, rating, claims handling, and policyholder service practices for compliance with state laws
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.
Under state insurance law, a 'free-look' period for property and casualty policies is most commonly:
Answer: Not universally required for P&C policies in the same way as life/health, but some states mandate a short review period
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.
State 'file and use' rate regulation for property and casualty insurance means:
Answer: Insurers may begin using new rates immediately upon filing with the state, without waiting for prior approval
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.
Under state insurance codes, the 'grace period' for late premium payment on a property and casualty policy typically:
Answer: Provides 30–31 days of continued coverage after the due date, after which coverage lapses if premium is not paid
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.
Which state regulatory action is taken when an insurer is found to be financially impaired and unable to meet its obligations to policyholders?
Answer: The state places the insurer into receivership or liquidation, with the commissioner acting as receiver
When a property and casualty insurer is financially impaired, the state insurance commissioner petitions a court to place the company into receivership; if liquidation is ordered, covered claims are transferred to the state guaranty fund.