Chapter 5. Florida Statutes, Rules, and Regulations Common to All Lines

Question 1

What are the six categories of insurance discrimination?

Answer 1

• Marital status
• Race
• Color
• National origin
• Creed
• Ancestry

Question 2

Who regulates insurance in Florida?

Answer 2

OIR (Office of Insurance Regulation) - regulates insurance companies

Question 3

What are the continuing education requirements to maintain a P&C license?

Answer 3

> 6 years licensed: Complete 24 hours of CE + 4 hours of ethics every 2 years
6 years licensed: Complete 20 hours of CE + 4 hours of ethics every 2 years

Question 4

What is surplus lines insurance?
A. Insurance in excess of a standard policy’s coverage
B. Insurance placed with an unauthorized insurer
C. Any insurance on items worth more than $25,000
D. Additional insurance placed on itemized risks

Answer 4

B. Insurance placed with an unauthorized insurer

Question 5

Shortly before the insurer became insolvent, a homeowner submitted a claim on their homeowners policy for $400,000 due to the damage to the structure. What is the maximum amount the Florida Insurance Guaranty Association will cover?
A. $400,000
B. $200,000
C. $500,000
D. $300,000

Answer 5

A. $400,000

Usually, the association will cover each claim for up to $300,000, except for homeowners policies, which may be covered for an additional $200,000 for the portion of a covered claim which relates only to the damage to the structure and contents. However, the association will not be obligated for any amount in excess of the obligation of the insolvent insurer under the policy - $400,000 in this case.

Question 6

Which of the following is a separate account of the Florida Insurance Guaranty
Association?
A. Ocean marine
B. Auto liability and physical damage
C. Surplus lines
D. Workers compensation

Answer 6

B. Auto liability and physical damage

The association has 2 separate accounts: the auto liability and physical damage account, and the account for all the other types of property and casualty insurance covered by the association. The association’s liability does not cover workers compensation, surplus lines, and ocean marine claims.

Question 7

In an insurance transaction, who is the principal?
A. The insurer
B. The underwriter
C. The policyowner
D. The producer

Answer 7

A. The insurer

Question 8

Which of the following is a characteristic of a Reciprocal Insurance Exchange?
A. Issues nonassessable policies
B. Normally write all lines of insurance
C. Stock holders share in any profits
D. The chief administrator of the insurer is called an “attorney-in-fact”.

Answer 8

D. The chief administrator of the insurer is called an “attorney-in-fact”.

A “reciprocal” is an unincorporated aggregation of individuals, called subscribers, who exchange insurance risks. If the premiums charged for coverage are not sufficient to pay the losses of the group, subscribers may be assessed an additional premium. A reciprocal is administered by an attorney-in-fact who is empowered to bind each subscriber to assume a share of the losses of the group.