State Insurance Practice Test

State Insurance Practice Test Harold's property insurance policy is a contract of indemnity because - ✔✔The benefit payable is related to the amount of loss. If an insurance producer misrepresents the terms, benefits, ...

State Insurance Practice Test Harold's property insurance policy is a contract of indemnity because - ✔✔The benefit payable is related to the amount of loss. If an insurance producer misrepresents the terms, benefits, or advantages of an insurance policy he or she is selling, that producer has engaged in a(n) - ✔✔unfair method of competition Ralph recently joined the Independent Order of Craftspeople, an organization for men and women who earn a living by designing and making crafts, and which provides insurance to its members. What type of organization is this Order? - ✔✔fraternal benefit society What describes an insurance company that is not licensed to conduct insurance business in Indiana, but is licensed in another state? - ✔✔Non-admitted insurance company Brad purchased an auto insurance policy to insure his new car. An insurer might consider Brad, his car, or both to be a(n) - ✔✔risk Jason repairs a broken stair on his front porch so that it is less likely people will trip and fall down the stairs and injure themselves. What measure has he taken to manage this risk? - ✔✔prevention If the Hampton Insurance Company is organized under the laws of the District of Columbia, what is its classification in relation to Indiana? - ✔✔foreign insurer Kent stated on his application for property insurance that the roof of the building being insured had been recently replaced. In fact, the replacement occurred 12 years ago. Kent made a false statement of a material fact, which is also known as a(n) - ✔✔misrepresentation Which of the following is not a power granted to the Indiana Commissioner of Insurance? - ✔✔Prosecuting individuals for violating the insurance laws What do a direct writer and an exclusive agent have in common? - ✔✔the both only represent one insurer Alex sold an insurance policy before his license lapsed and earned a commission on the sale. Is he entitled to a commission if the policy is renewed? - ✔✔He is entitled because he was licensed when the policy was sold. What type of insurer covers the risks of the parent organization that owns it? - ✔✔Captive insurance company Which of the following practices is not an unfair claims settlement practice? - ✔✔Failure to make claim payment within 30 days An insurance agent mistakenly tells policyholder Jerry that his boat is covered under a policy the agent recently sold him. Jerry's boat is damaged in a storm and he learns his boat is not covered when he files a claim. Will the insurer pay this claim? - ✔✔Yes, because the agent legally represents the insurer. What does an insurance company purchase if it wants to transfer some or all of the risks involved in its insurance operation to another insurance company? - ✔✔Reinsurance After insurance consulting services are completed, how long must a consultant retain the signed agreement outlining the services he or she provided? - ✔✔2 years When taking his examination for an insurance producer license, Tad used unauthorized material to assist him. He justified this on the basis that the materials would be available to him in a real life situation if he needed them, and he needed them now. Is this an acceptable practice? - ✔✔Tad committed a prohibited act. When comparing her insurance company's policies to those of Zenith Insurance, Corinne makes a misleading statement to convince an insurance prospect to terminate a policy with Zenith and buy one from Corrine's company. Corrine has engaged in - ✔✔twisting Diane's agency agreement specifically gives her the authority to collect insurance premiums. This type of authority is called - ✔✔Express authority A party to a contract may not enforce a rig