According to the CA Department of Insurance which term means "mandatory"?
Oath
May
Warranty
Shall
According to the CA Department of Insurance, which term means "permissive"?
Twisting
When advertising on the internet in CA, an agent or broker must provide all the following except:
Name of the licensee
Office address
Expiration Date of the license
License number
Why is having a large number of similar exposure units important to insurers?
Te greater the number insured, the more premium is collected to offset fixed costs.
The insurer increases its market share with every insured.
The greater the number insured, the greater the amount of premiums collected to help cover losses.
The greater the number of insured's, the more accurately the insurer can predict losses and set appropriate premiums.
When a mutual insurance company changes to a stock insurance company, it is referred to as:
Mutualization
Stock split
Stock buy out
Demutualization (or conversion)
Which of the following describes an insurer who has enough financial resources only to provide for all its liabilities and for all reinsurance of all outstanding risks?
Guaranteed
Insolvent
Solvent
Non-participating
According to the California Insurance Code, and insurance policy must specify all of the following EXCEPT:
The perils insured against
The financial rating of the insurer
The property or life being insured
The policy period
According to the CA Department of Insurance fraudulent is consider:
Misdemeanor
A forgiveness
Infraction
Felony
According to the CA Insurance Code, what must appear on a notice of claim form given to an insured?
Telephone number of the Department of Insurance
Information regarding the Arson Bureau
Information regarding an insurance claims analyst bureau
A notice stating that any person who knowingly presents a false, or fraudulent claim, is guilty of a crime, and may be subject to fines and confinement in state prison.
According to Proposition 103, the commissioner of insurance became an elected official. The commissioner may serve:
As many terms for which he is elected
One term only
Two consecutive terms (8 years)
No mention is made in the insurance code as to term limits
All of the following are valid reasons for the insurance commissioner to deny the application for an insurance license EXCEPT:
Applicant does not have a good business reputation
Applicant is not properly qualified to perform
Applicant does not have a CA business address
Applicant lack integrity
With whom are policy forms filed?
Insurance Services Office (ISO)
Department of Insurance (DOI)
National Council on Compensation Insurance (NCCI)
Internal Revenue Service (IRS)
Records of an agent or broker must be available to the commissioner:
At all times
Only after written notice from the commissioner
15 days after the license is issued
Never
How long must an agent maintain records sold in CA?
10 years
6 years
5 years
2 years
An applicant for an insurance license had another professional license revoked. What would the commissioner most likely do?
Nothing, it did not involve insurance
Deny the application without a hearing
Take it under advisement
Deny after a hearing
When may an agent transact for an insurance company?
When the agent receives the action notice
When the commissioner receives the application
When the appointing company signs the action notice of appointment
At the beginning of the fiscal year
In the CA Insurance Code there is a definition that reads, in short, "...a person who offers to advise for a fee, any insured having interest in life or disability insurance contracts..." This is a:
An insurance broker paid on a fee for service
A solictor
A life and disability analyst
A Claims adjuster
If a licensee wants to terminate and surrender his license, what must he do?
Destroy the original license
Destroy the original and notify the commissioner
Deliver the license to the commissioner
Nothing
What must an insurer do, who accepts an application from an agent who is not appointed by that insurer, if they subsequently will issue a policy based on that application?
The agent must become an employee of that insurer within 30 days or re-submit the application
Add the agent's name on the company's list of approved agents
Send the agent an employment approval notice within 30 days of policy issuance
Forward to the insurance commissioner a notice of appointment within 14 days of receipt of the application
Who is allowed to work with non-admitted carriers when the insurance cannot be found in the ordinary market?
Non-ordinary companies
Health only agents
Surplus lines brokers
Gap insurances
The greater the number insured, the more premium is collected to offset fixed costs.
When an agent accepts premium from the insured and uses the money for personal gain, it is considered:
Theft
Fraud
Concealment
Misrepresentation
An act which requires a reporting agency to take action if a consumer complains about inaccurate information is:
EPO
Medical Information Act
Fair Credit Act
COBRA
In insurance terms, a representation can be considered:
An absolute fact
An implied warranty
An express warranty
None of the above
When may a representation be withdrawn?
At any time as long as all parties agree
It cannot be withdrawn
Only before the insurance is in effect
Only after the policy is in effect
CA insurance code requires television commercial selling term life insurance to an individual 55 or older must inform the consumer that:
Passin a physical exam is a requirement for benefits
Anyone who purchases term life insurance who's 55 or older will receive a senior discount
Benefits and limitations should be considered prior to purchase
All answers are correct
Any person who meets with a senor at the seniors home, is required to deliver a notice in writing to the seniors home. They must receive this notice prior to the intitial meeting within how many days of the meeting?
12 hours prior to the meeting
6 hours prior to the meeting
No notice is required
No less than 24 hours
An employee tripped over her shoelace at work and suffered an injury. This injury would be covered by:
Commercial general liability
Disability insurance
Workers compensation
Premises and operations coverage form
Under workers compensation medical payments, which is correct?
There is at time limit for medical payments but no dollar limit
There is a dollar limit but no time limit
There is both a time limit and a dollar limit
There is no time or dollar limit on medical payments
Workers compensation Part 1 covers:
Retirement benefits
All sums the insurer is legally obligated to pay under common law
All sums the insurer is required to pay by state law
All costs of the employee required by state fund
To what does 24-hour coverage refer?
It is medical coverage which provides around the clock protection.
It is the joint issuance of a worker's compensation policy with a disability insurance policy or other medical coverage for non-occupational injuries and illnesses.
It refers to the fact that a person needs 24 hour nursing care
It means that there is a waiting period of 24 hours before coverage begins.
The insurance commissioner:
Is appointed by the governer
Is elected by the state legislature
Is appointed by the state attorney general
Is elected by the public
All of the following might make an agent act unethically EXCEPT:
Being mostly concerned about earnings
Associating with unethical agents
Being pressured as production is not up to quota
Placing clients' interests first
The insurance code definition of an "insurance broker" is:
Someone paid to transact insurance on behalf of another person but not on behalf of the insurer.
Someone appointed by a fire and casualty broker-agent (employer) receiving commissions from the employer, transacting insurance with the insurers the employer represents an acting on behalf of the clients.
Any agent that writes more difficult to place business with specialty insurers who have appointed him
Someone appointed to transact insurance with admitted insurers and receives commissions from them, but acts on behalf of the clients.
An agent held one appointment with an insurance company. The appointment was terminated. What is correct?
The license is active until the end of the term.
The license is inactive.
The agent must be re-appointed by the same company.
The agent is required to have another action notice of appointment filed within 30 days.
What must an insurer do who accepts an application from an agent who is not specifically appointed by that insurer and subsequently issues a policy based on that application?
Forward to the insurance commissioner a notice of appointment within 14 days of receipt of the application.
Lou Jones, who has earned the CPCU designation, holds individual licenses as insurance agent and broker. He employs two solicitors in his agency. Which of the following is a true statement about names?
He can use Lou Jones Insurance Company
He can use Lou Jones and Company
He can use Lou Jones, CPCU, AAI, on his insurance stationary and other forms
Under worker's compensation, a disability that is a permanent physical impairment leaving the individual incapable of performing the previous regular occupation, but capable of performing some other type of work, is a:
Permanent total disability
Permanent partial disability
Temporary total disability
Temporary partial disability
Benefits under workers compensation would include:
Rehabilitation
Medical costs
Loss of time
Worker's compensation laws require the employer to pay benefits to a worker who is injured in the course of his employment. The employee is covered:
Only if they injury is the result of the employer's fault or negligence.
If the injury is the fault or negligence of the employer or any other employee.
If the injury is the fault or result of negligence of the employer or any other person
Without regard to fault or negligence of the employer or any other person
Which of the following is not a federal government program?
Flood insurance
Federal Deposit Insurance Corporation
Federal Crop Insurance
Workers Compensation
The purpose of the CA Life and Health guarantee Association is:
It helps small insurers with less capital to compete with larger insurers.
To protect life policy holders and/or insured's when any member insurer becomes insolvent.
To guarantee that any promises made by any insurer's sales or marketing units are fulfilled.
(Subject to certain limitations) to protect life and health policy holders and/or insured's when member insurers become insolvent.
Under Tort Law, a person can face a claim for legal liability on the basis of all of the following EXCEPT:
Absolute liability
Intentional tort
Negligence
Breach of Contract
A wrongful act other than a crime or breach of contract is a:
Tort
Proximate cause
Liability
Hazard
What can an insurer do when a fraudulent and intentional omission is committed on the part of the insured proving a warranty false?
Have the insured imprisoned for up to 6 months
Rescind the contract
Force the insured to pay a fine
Force the commissioner to fine and imprison the insured
Under which circumstances does a party involved in a contract of insurance need to communicate information based solely on his judgment?
Only when asked
Only when relevant to the matter in question
Always
Neglecting to communicate that which a party knows, and ought to communicate, so that the other party may make a sound decision is known as:
Material Information
Boycottingg
A person who acts in a capacity that requires an active license without having a valid license is guilty of a:
The mathematical rule that states that as the number of individual but similar exposure units increase, the easier it is to predict the losses is which of the following:
Insurance interest standard
Contract law
The law of large numbers
Materiality
