NJ Property/ Casualty Insurance Exam Set With 100% Correct Answers 2023.
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Course
Nj property and casualty
Institution
Nj Property And Casualty
NJ Property/ Casualty Insurance Exam Set With 100% Correct Answers 2023.
Why was the commercial Insurance Deregulation Act Created?
To protect the public from the adverse effects of excessive, inadequate, & unfair discriminatory rates & marketing practices
Which policies issued must follow the...
NJ Property/ Casualty Insurance Exam Set
With 100% Correct Answers 2023.
Why was the commercial Insurance Deregulation Act Created?
To protect the public from the adverse effects of excessive, inadequate, & unfair
discriminatory rates & marketing practices
Which policies issued must follow the provisions of the Commercial Insurance
Deregulation Act?
Commercial policies
When must rate amendments & policy forms be filed with the commissioner?
30 days before
What losses are excluded from flood insurance?
-Landslides
-Sewer backup
-Windblown Rain
-Snow
-Sleet
Who administers the NFIP?
Federal Insurance Administration (FIA)
What does the NFIP stand for?
National Flood Insurance Program
Why was the National Flood insurance Program constructed?
to fill in gaps of flood coverage by the private sector
What are the 3 NFIP requirements for coverage?
-community land management & flood control programs must reduce flood losses in the
future
-Flood insurance required in specific flood prone areas as a condition for receiving loans
through/ backed by the federal government
-Property owners that fail to purchase flood insurance within 1 year after it is available
will not be eligible for full disaster relief funding. It will be reduced by an amount of
insurance that could have been purchased
What is the NFIP max coverage for a single family?
Building $250K, Contents $100K
What is the NFIP max coverage for other residential?
Building $250K, Contents $100K
What is the NFIP max coverage for small business?
Building $500K, Contents $500K
What is the NFIP max coverage for Other Non-Residential?
Building $500k, Contents $500K
What is the NFIP subsidized rate for a single family?
Building $35K, Contents $10K
What is the NFIP subsidized rate for Other Residential?
Building $100K , Contents $100K
What is the NFIP subsidized rate for small businesses?
,Building $100K, Contents $100K
What is the NFIP subsidized rate for other non-residential?
Building $100K, Contents $100K
What is the wait period before flood insurance can be effective?
30 days, no binders issued
What are the exceptions to the 30 day NFIP wait period?
-1st 30 days after coverage, community enters standard or emergency program,
coverage will begin at 12:01 am the date after application and premium were mailed
-When an existing policy was assigned to a property purchaser
-At 12:01 am on the 5th day after an endorsement request & premium has been mailed
for existing policy
What was the Supreme Court's decision regarding the Paul v. Virginia case?
insurance was NOT interstate commerce and could not be regulated by the federal
govt.
Who heard the Paul v. Virginia case?
Supreme Court
Who heard the US v Southeastern Underwriting Association case?
Supreme Court
What was the decision in the US v Southeastern Underwriting Association Case?
Insurance is interstate commerce and should be subject to federal regulations (currently
in effect today)
What is the McCarran-Ferguson Act?
The federal govt won't regulate insurance business as long as states perform an
adequate job of managing their own insurance industries.
When was the McCarran-Ferguson Act passed?
March 9, 1945
To whom does the insurance commissioner have to provide a report?
Governor & Legislature
How often must the insurance Commissioner provide a report?
Annually
How long before a disciplinary hearing must the insurance commissioner notify
interested parties?
10 days before
What is the fine for failing to comply with a court-ordered subpoena?
$5000
If the commissioner decides one has violated the insurance code, what is the fine
for unintentional acts performed?
$1000
If the commissioner decides one has violated the insurance code, what is the max
fine?
1st offense: $5K, 2nd offense $10K, each additional $15K
If the insurance commissioner decides one has violated the insurance code, what
is the fine for violating a cease & desist?
$5k each violation
If the insurance commissioner decides one has violated the insurance code, what
is the fine for unlawful acts with intentional & material thought?
,$5k
What is the fine for not contacting the dept with an address or name change
within 30 days?
$250 max if over 60 days
What is the fine for if a license fee check is returned for insufficient funds?
$500
What is the fine for if you do not contact the department regarding a change in
partners, owners, officers, or directors?
$250
What is the fine for not returning a license to a producer?
$500
What is the fine for not maintaining an office address or employment contracts on
file with the department?
$100 for each contract
What document is required before an insurance company may transact business
in a state?
Certificate of Authority
What is a domestic insurer?
An insurer that conducts business in the state in which it was incorporated
A producer who is appointed with more than one insurer is considered to be...
A Licensed Solicitor
Implied authority is defined as...
Ability to act outside the authority specifically granted in an agency agreement &
extends company's liability
What kind of clause relates to this statement: E&N Company issued a policy in
consideration of the representations on an application & the payment of the 1st
premium?
Consideration
An insured's representations and warranties are incorrectly stated in which of the
following statements?
a. Statements made by an applicant that are guaranteed true are considered to be
warranties
b. Statements that an applicant believes to be true, but does not guarantee to be
true, are considered to be representations
c. An applicant's statements on an application are considered warranties
d. An applicant's statements on an application are considered representations
c. An applicant's statements on an application are considered warranties
What term relates to an agreement without legal effect?
Void
An authorized but non-admitted insurer can be represented in this state only by
which of the following?
Surplus lines broker
In franchise groups, how many master policies will be issued?
None
Self-insurance is an example of what kind of risk management?
retention
, What kind of plan is a Stock life insurance company conducting when it issues
participating and non-participating policies?
Mixed
What is the fine for if you do not contact the department regarding a change in
partners, owners, officers, or directors?
$250
What is this an example of: Doctors pooling their funds to cover their malpractice
exposures?
risk sharing
Which entity makes an enforceable promise in a unilateral contract?
Insurer
In a court of law, any ambiguity found in a policy will go in favor of the insured
because an insurance policy is what kind of contract?
contract of adhesion
In regard to an informal contract, when will it become binding?
When one party makes an offer and the other party accepts the offer
When a risk is insurable, what must be calculable?
chance of loss
What is a non-profit provider of insurance that is covered by a unique section of
the insurance code called?
Fraternal Life Insurance Organization
All of the following are examples of conditions except:
a. Inspections
b. Liberalization clause
c. Return of premium
d. Appraisal
d. Appraisal
If a driver had lots of accidents & violations, compared to other drivers their age,
which rating type would most closely reflect their risk?
Merit
What construction class has a 2 hour fire resistance rating?
fire resistive
What rating system is the most common approach used in the insurance
industry?
class
A consequential loss is known as what kind of loss?
indirect
What is ACV?
Actual cash value
Replacement cost-depreciation= ACV
Which kind of penalty does the insured suffer if the insured does NOT carry
sufficient insurance to meet the policy requirement?
coinsurance
Which policy part contains the policy's premium & coverage?
declarations
The Pro Rata provision is most closely associated with which principle?
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