©THEBRIGHT EXAM SOLUTIONS
11/7/2024 12:35 PM
NJ Property/ Casualty Insurance Exam Set
Questions With Correct Answers
Why was the commercial Insurance Deregulation Act Created? - answer✔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? - answer✔Commercial policies
When must rate amendments & policy forms be filed with the commissioner? - answer✔30
days before
What losses are excluded from flood insurance? - answer✔-Landslides
-Sewer backup
-Windblown Rain
-Snow
-Sleet
Who administers the NFIP? - answer✔Federal Insurance Administration (FIA)
What does the NFIP stand for? - answer✔National Flood Insurance Program
Why was the National Flood insurance Program constructed? - answer✔to fill in gaps of flood
coverage by the private sector
What are the 3 NFIP requirements for coverage? - answer✔-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
, ©THEBRIGHT EXAM SOLUTIONS
11/7/2024 12:35 PM
-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? - answer✔Building $250K, Contents $100K
What is the NFIP max coverage for other residential? - answer✔Building $250K, Contents $100K
What is the NFIP max coverage for small business? - answer✔Building $500K, Contents $500K
What is the NFIP max coverage for Other Non-Residential? - answer✔Building $500k, Contents
$500K
What is the NFIP subsidized rate for a single family? - answer✔Building $35K, Contents $10K
What is the NFIP subsidized rate for Other Residential? - answer✔Building $100K , Contents
$100K
What is the NFIP subsidized rate for small businesses? - answer✔Building $100K, Contents
$100K
What is the NFIP subsidized rate for other non-residential? - answer✔Building $100K, Contents
$100K
What is the wait period before flood insurance can be effective? - answer✔30 days, no binders
issued
What are the exceptions to the 30 day NFIP wait period? - answer✔-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? -
answer✔insurance was NOT interstate commerce and could not be regulated by the federal
govt.
Who heard the Paul v. Virginia case? - answer✔Supreme Court
Who heard the US v Southeastern Underwriting Association case? - answer✔Supreme Court
, ©THEBRIGHT EXAM SOLUTIONS
11/7/2024 12:35 PM
What was the decision in the US v Southeastern Underwriting Association Case? -
answer✔Insurance is interstate commerce and should be subject to federal regulations
(currently in effect today)
What is the McCarran-Ferguson Act? - answer✔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? - answer✔March 9, 1945
To whom does the insurance commissioner have to provide a report? - answer✔Governor &
Legislature
How often must the insurance Commissioner provide a report? - answer✔Annually
How long before a disciplinary hearing must the insurance commissioner notify interested
parties? - answer✔10 days before
What is the fine for failing to comply with a court-ordered subpoena? - answer✔$5000
If the commissioner decides one has violated the insurance code, what is the fine for
unintentional acts performed? - answer✔$1000
If the commissioner decides one has violated the insurance code, what is the max fine? -
answer✔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? - answer✔$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? - answer✔$5k
What is the fine for not contacting the dept with an address or name change within 30 days? -
answer✔$250 max if over 60 days
What is the fine for if a license fee check is returned for insufficient funds? - answer✔$500
What is the fine for if you do not contact the department regarding a change in partners,
owners, officers, or directors? - answer✔$250
What is the fine for not returning a license to a producer? - answer✔$500
What is the fine for not maintaining an office address or employment contracts on file with the
department? - answer✔$100 for each contract
, ©THEBRIGHT EXAM SOLUTIONS
11/7/2024 12:35 PM
What document is required before an insurance company may transact business in a state? -
answer✔Certificate of Authority
What is a domestic insurer? - answer✔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... - answer✔A
Licensed Solicitor
Implied authority is defined as... - answer✔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? -
answer✔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 - answer✔c. An
applicant's statements on an application are considered warranties
What term relates to an agreement without legal effect? - answer✔Void
An authorized but non-admitted insurer can be represented in this state only by which of the
following? - answer✔Surplus lines broker
In franchise groups, how many master policies will be issued? - answer✔None
Self-insurance is an example of what kind of risk management? - answer✔retention
What kind of plan is a Stock life insurance company conducting when it issues participating and
non-participating policies? - answer✔Mixed
What is the fine for if you do not contact the department regarding a change in partners,
owners, officers, or directors? - answer✔$250
11/7/2024 12:35 PM
NJ Property/ Casualty Insurance Exam Set
Questions With Correct Answers
Why was the commercial Insurance Deregulation Act Created? - answer✔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? - answer✔Commercial policies
When must rate amendments & policy forms be filed with the commissioner? - answer✔30
days before
What losses are excluded from flood insurance? - answer✔-Landslides
-Sewer backup
-Windblown Rain
-Snow
-Sleet
Who administers the NFIP? - answer✔Federal Insurance Administration (FIA)
What does the NFIP stand for? - answer✔National Flood Insurance Program
Why was the National Flood insurance Program constructed? - answer✔to fill in gaps of flood
coverage by the private sector
What are the 3 NFIP requirements for coverage? - answer✔-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
, ©THEBRIGHT EXAM SOLUTIONS
11/7/2024 12:35 PM
-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? - answer✔Building $250K, Contents $100K
What is the NFIP max coverage for other residential? - answer✔Building $250K, Contents $100K
What is the NFIP max coverage for small business? - answer✔Building $500K, Contents $500K
What is the NFIP max coverage for Other Non-Residential? - answer✔Building $500k, Contents
$500K
What is the NFIP subsidized rate for a single family? - answer✔Building $35K, Contents $10K
What is the NFIP subsidized rate for Other Residential? - answer✔Building $100K , Contents
$100K
What is the NFIP subsidized rate for small businesses? - answer✔Building $100K, Contents
$100K
What is the NFIP subsidized rate for other non-residential? - answer✔Building $100K, Contents
$100K
What is the wait period before flood insurance can be effective? - answer✔30 days, no binders
issued
What are the exceptions to the 30 day NFIP wait period? - answer✔-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? -
answer✔insurance was NOT interstate commerce and could not be regulated by the federal
govt.
Who heard the Paul v. Virginia case? - answer✔Supreme Court
Who heard the US v Southeastern Underwriting Association case? - answer✔Supreme Court
, ©THEBRIGHT EXAM SOLUTIONS
11/7/2024 12:35 PM
What was the decision in the US v Southeastern Underwriting Association Case? -
answer✔Insurance is interstate commerce and should be subject to federal regulations
(currently in effect today)
What is the McCarran-Ferguson Act? - answer✔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? - answer✔March 9, 1945
To whom does the insurance commissioner have to provide a report? - answer✔Governor &
Legislature
How often must the insurance Commissioner provide a report? - answer✔Annually
How long before a disciplinary hearing must the insurance commissioner notify interested
parties? - answer✔10 days before
What is the fine for failing to comply with a court-ordered subpoena? - answer✔$5000
If the commissioner decides one has violated the insurance code, what is the fine for
unintentional acts performed? - answer✔$1000
If the commissioner decides one has violated the insurance code, what is the max fine? -
answer✔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? - answer✔$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? - answer✔$5k
What is the fine for not contacting the dept with an address or name change within 30 days? -
answer✔$250 max if over 60 days
What is the fine for if a license fee check is returned for insufficient funds? - answer✔$500
What is the fine for if you do not contact the department regarding a change in partners,
owners, officers, or directors? - answer✔$250
What is the fine for not returning a license to a producer? - answer✔$500
What is the fine for not maintaining an office address or employment contracts on file with the
department? - answer✔$100 for each contract
, ©THEBRIGHT EXAM SOLUTIONS
11/7/2024 12:35 PM
What document is required before an insurance company may transact business in a state? -
answer✔Certificate of Authority
What is a domestic insurer? - answer✔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... - answer✔A
Licensed Solicitor
Implied authority is defined as... - answer✔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? -
answer✔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 - answer✔c. An
applicant's statements on an application are considered warranties
What term relates to an agreement without legal effect? - answer✔Void
An authorized but non-admitted insurer can be represented in this state only by which of the
following? - answer✔Surplus lines broker
In franchise groups, how many master policies will be issued? - answer✔None
Self-insurance is an example of what kind of risk management? - answer✔retention
What kind of plan is a Stock life insurance company conducting when it issues participating and
non-participating policies? - answer✔Mixed
What is the fine for if you do not contact the department regarding a change in partners,
owners, officers, or directors? - answer✔$250
