Property and Casualty Insurance Exam -
Georgia
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.
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.
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.
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.
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
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.
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.
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.
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.
,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.
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.
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.
What is a binder - correct answer-A temporary insurance contract that goes in effect prior to
the policy issue. No binder shall be valid pass the issuance of the policy beyond 90 days of
its effective date, whichever period is shorted.
Georgia FAIR - correct answer-The Georgia Fair Access to Insurance Requirement provides
basic property insurance for those who cannot obtain it in the ordinary market.
Georgia Automobile Insurance Plan - correct answer-The Georgia Automobile Insurance
Plan makes automobile insurance available for insureds who are unable to purchase
coverage in the voluntary market. When an automobile policy is cancelled or nonrenewed for
a reason other than for nonpayment of premium, the insurer must notify the insured of their
eligibility for coverage through the Georgia Automobile Insurance Plan. The notice about the
Plan must accompany the notice of cancellation or nonrenewal.
Workman's Compensation - correct answer-Covers all business with 3 or more employees
Treatment limited to max of 400 weeks unless injuries are catastrophic.
What are the benefit payout requirements for WC? - correct answer-Workers can collect WC
benefits after being out of work for more than 7 days, and the first check will arrive with 21
days of the first missed workday. The compensation is limited to 2/3 of the worker's average
weekly pay up to $575.
, Georgia Workers Compensation Assigned Risk Plan - correct answer-The Georgia Workers
Compensation Assigned Risk Plan exists to provide required Workers Compensation
coverage for employers who do not qualify for coverage in the voluntary market. Liability is
apportioned among all insurers authorized to write Workers Compensation and Employers
Liability in the state.
How often must an insurer update their rate filings? - correct answer-Every 2 years
All insurers must file their rates 45 days before their effective date.
When a rate increases more than 10$ or more within 12 months, the Commissioner will
order and examination.
What is the Commissioner's term of office? - correct answer-4 years
When does an agent have to notify the Commissioner of a change of address? - correct
answer-Within 30 days
How many days are allowed to report a criminal prosecution against a licensee? - correct
answer-30 days
What is the total liability of the Georgia Life and Health Insurance Guaranty Association for
any one life? - correct answer-$300,000
PAP Section II Part B: Medical Expenses Coverage - correct answer--covers all reasonable
medical costs and funeral expenses incurred, by the insured or the insured's family members
within 3 years of an accident
-recommended coverage of $50,000
Cancellation and Nonrenewal of Policies other than PA and PP - correct answer-For all
insurance other than that covering a personal automobile or personal property, a notice of
termination, including a notice of cancellation or nonrenewal, a notice of increase in
premiums that exceeds 15% of the current policy's premium unless due to a change in risk
or exposure or a notice of change in any policy provision which limits or restricts coverage
must be delivered or mailed to the insured at least 45 days before the effective date of such
termination or change.
Failure to comply with this requirement entitles the policyholder to purchase a policy for an
additional 30 days beyond the current expiration date (on the same terms and conditions
and with the same premium as the expiring policy). If the policy will incur a premium increase
of more than 15%, the dollar amount of that increase must be stated in the notice.
Valuation of Loss For a 1-2 family residence - correct answer-Georgia law contains a valued
policy statute. An insurer is required to value the property at the amount of insurance in
effect at the time of the loss, minus any depreciation. If the loss occurs within 30 days of
policy issuance, the actual loss sustain up to the LOL will be paid.
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