PROPERTY AND CASUALTY INSURANCE
EXAM WITH QUESTIONS AND CORRECT
ANSWERS [ACTUAL EXAM 100%]GRADED
A+
BPP building coverage - CORRECT ANSWER-insures the building at the
described location, outdoor, fixtures, furnitures, items used to service
the property, permanently installed machinery and equipment, and
additions under construction, including the materials, supplies, and
equipment.
HO limits of property at other residences - CORRECT ANSWER-the
larger of $1000 or 10% Coverage C. Limit does not apply if property is
moved because the residence premise is being repaired or rebuilt.
When property is moved to newly acquired residence, the limit shown
on declaration will apply on a proportional basis to each residence
Dwellings under construction - CORRECT ANSWER-The limit of liability
for a dwelling under construction is provisional, and is based on the
completed value of the structure. At the time of loss, the applicable
limit is a percentage of the provisional limit, based on the proportion
of actual cash value of the property at the time of loss. Premium is
based on an average amount of insurance during construction.
,Automatic Increase in Insurance Endorsement - CORRECT ANSWER-is
used to provide at the annual renewal date of the policy, an automatic
increase in the Coverage A and B limits of insurance to help offset
inflation
Other insurance - CORRECT ANSWER-A provision in an insurance
policy that defines how the policy will respond if there is another valid
insurance policy written on the same risk.
Stock Companies - CORRECT ANSWER-Owned by the stockholders
who provide the capital necessary to establish and operate the
insurance company and who share in any profits or losses.
Mutual companies - CORRECT ANSWER-Owned by the policyowners
and issue participating policies. Policyowners are entitled to
dividends, which are a return of excess premium and are nontaxable.
6 classes of insurance in Georgia - CORRECT ANSWER-1. Life,
accident, and sickness
2. Property, marine, and transportation
3. Casualty
4. Surety
5. Title
6. HMOs
How often must the Insurance Commission examine domestic
insurers? - CORRECT ANSWER-Once every 5 years.
Water Backup & Sump Pump Endorsement - CORRECT ANSWER-
Coverage for up to $5,000 in loss or damage, subject to a $250
deductible, can be provided for an additional premium with this
endorsement.
A notification of the hearing must be sent at least 15 days in advance.
Within 30 days of the hearing, the Commissioner must release his
decision.
,What are the penalties after a notice, hearing, and cease and desist
order? - CORRECT ANSWER-A fine of up to $10,000 per violation
Suspension/revocation of license
Any other appropriate relief.
Express authority - CORRECT ANSWER-the authority of an agent,
stated in the document or agreement creating the agency
What are the timelines if a hearing is requested? - CORRECT ANSWER-
A hearing must be made within 30 days of the receipt of the request.
Implied authority - CORRECT ANSWER-Authority that is not expressed
or written into the contract, but which the agent is assumed to have in
order to transact the business of insurance for the principal.
.
When does an agents license expire? - CORRECT ANSWER-Licenses
are good to for 2 years and expire on the last day of the licensee's
with month.
What are the CE requirements for an agent? - CORRECT ANSWER-24
CE credit hours every 2 years, including 3 credit hours of ethics.
Agents with licensed for 20 years only need 20 CE credit hours,
including ethics.
How long must an agent keep records regarding contracts, premiums,
etc.? - CORRECT ANSWER-All records must be kept for 5 years after
the completion of a transaction or for the term of the contract,
whichever is greater.
Misrepresentation - CORRECT ANSWER-Issuing, publishing, or
circulation and illustration or sales materials that is false, misleading,
or deceptive as to policy benefits or terms, the payments of dividends,
etc.
, Apparent authority - CORRECT ANSWER-The appearance or the
assumption of authority based on the actions, words, or deeds of the
principal or because of circumstances the principal created
False advertising - CORRECT ANSWER-advertising that is misleading in
some important way, including the failure to reveal facts about
possible results from using the advertised products
Rebating - CORRECT ANSWER-Any inducement offered in the sale of
insurance products that is not specified in the policy. They are illegal
in Georgia.
Churning - CORRECT ANSWER-Replacing insurance policies for the
sole purpose of making commissions. It is illegal to replace existing
life or disability policies with new policies if the producer cannot
demonstrate that the replacement will benefit the insured.
Coercion - CORRECT ANSWER-Unfair trade practice where an agent
uses physical or mental force with the intense of inducing an applicant
to purchase insurance.
Twisting - CORRECT ANSWER-A form of misrepresentation in which an
agent persuades an insured/owner to cancel, lapse, or switch policies,
even when it's to the insured's disadvantage.
Defamation - CORRECT ANSWER-Defamation occurs when an oral or
written statement is made that is intended to injure a person engaged
in the insurance business. This also applies to statements that are
maliciously critical of the financial condition of any person or a
company.
Controlled business - CORRECT ANSWER-Controlled business is any
coverage written on a producer's own life, health or property, and/or
that of the producer's immediate family or business associates. A
licensee is not allowed to collect commissions on controlled business
at rate higher than 25% of the agent' volume per calendar year.
