chapter fifteen - state laws Flashcards
Which of the following statements is false regarding Mexican surplus lines brokers?
A Mexican surplus lines broker must be a resident producer of Arizona
A Mexican surplus lines broker must be licensed and maintain an office in Arizona
Mexican surpluc lines insurance is not regulated by the state of Arizona
Mexican surplus lines insurance is not protected by the Arizona Guaranty Association
A Mexican surplus lines broker must be a resident producer of Arizona.
A Mexican surplus lines broker may be a resident or a nonresident producer of Arizona, as long as they maintain an office in Arizona.
Which of the following statements is true regarding insurance vending machines?
The vending machine must display the insurer’s information but not the producer’s
Once granted, the authority to issue insurance via vending machine does not expire
Insurance vending machines may have insurance from unauthorized insurers
The Director must find the policy suitable for vending machines or it may not be solicited
The vending machine must display the insurer’s information but not the producer’s
A vending machine must display the identification of both the insurer and producer. A policy may not be solicited through a vending machine if the Director finds the kind of insurance form of policy is unsuitable for sale through vending machines. A producer may only issue policies from authorized insures, and the producer’s authority expires at the same time as their license.
Each personal auto insurer in Arizona must offer UM/UIM coverage in what amount?
30/60/15
20/40/10
50/100/10
25/50/15
25/50/15
Which of the following is not a requirement that a business entity must comply with in order to become licensed?
Identify a licensed producer who will be responsible for compliance
Ensure that employees who act as a producer are licensed
Ensure that all officers, directors, and partners are licensed
Provide the Director names of all employees
Ensure that all officers, directors, and partners are licensed.
A business entity must ensure that any office, director or partner who acts as an agent be licensed.
A licensing candidate must be at least _____ years of age to be licensed.
There is no age requirement
18
21
25
18.
All the following are examples of boycott, coercion, or intimidation, except:
Requiring a mortgager to pay a handling charge on a policy to secure a loan
Unreasonably disapproving a policy that provides requisite coverage
Offering a premium discount or credit that is not specified in the policy
Convincing a debtor to getting a requisite insurance through a particular agent
Offering a premium discount or credit that is not specified in the policy.
Offering a premium discount or credit not specified in the policy is an example of rebating.
Which of the following acts constitutes an unfair claims settlement practice?
Frequently denying claims based on facts and law
Routinely settling claims without conducting an investigation
Often settling claims for amounts higher than the claimant expects
Regularly denying claims when the insured is not liable
Routinely settling claims without conducting an investigation
Which of the following is not an additional line of producer license authority in Arizona?
Travel insurance
Personal auto insurance
Rental car agent
Self-service storage agent
Travel insurance.
Personal auto insurance is a part of a property and casualty licensee’s authority. Additional lines of authority may be issued by the Director, including rental car agent, self-service storage agent, title insurance agent, limited lines portable electronics, limited lines travel insurance, and qualification to issue variable annuities.
The Director may take any of the following disciplinary actions, except:
Order payment of fines of up to $2,500 if the licensee committed an intentional violation of insurance law
Suspend a license if the producer provided incorrect or incomplete information on a license application
Suspend or revoke a license if the licensee forged a client’s signature on an application
Suspend a license for up to 2 years if the producer is convicted of a misdemeanor
Suspend a license for up to 2 years if the producer is convicted of a misdemeanor.
The Director may only suspend a license for up to 12 months and may revoke a license for a felony conviction.
A producer who pays the first 6 months premium for a friend while writing a life insurance policy is guilty of __________.
Paying improper fees
Rebating
Providing prohibited inducements
Defamation
Rebating
A licensee must complete at least how many hours of continuing education offered by an approved provider?
36
48
21
24
48.
Which of the following is included in the Telemarketing Sales Rule?
Require the telemarketer have a script to read to consumers
Immediately disconnect callers who ask not to be called again
Set limits on the time a telemarketer can call consumers
Suggest payment guidelines for the sale of certain services
Set limits on the time a telemarketer can call consumers.
An insurer discontinued a policies that had been posted online. How long must the insurer allow the information for the policy to remain accessible?
2 years
1 year
3 years
5 years
5 years.
Which of the following is an act constituting an improper claim settlement practice?
Failure to complete its investigation of a claim within 15 days of receiving notice
Failing to acknowledge receipt of a claim within 10 working days
Failure to pay a first party claim within 5 days after receipt of the proof of loss
Failure to advise claimants, in writing, of the acceptance or denial of claims within 5 working days
Failure to acknowledge receipt of a claim within 10 working days.
The Drive Other Car endorsement is used to insure which of the following?
A person who doesn’t own any car
A person who co-titled the car
A person who occasionally borrows the car
A person who is visiting for 6 months
A person who doesn’t own any car.
The Drive Other Car endorsement is for the person who does not own the car and will be provided coverages, including Unisnured Motorist higher limits of coverage.
Which of the following is a true statement about the Arizona uninsured/underinsured motorist coverage?
Uninsured motorist coverage can be rejected by the insured
A volunteer worker’s injuries from an uninsured driver are excluded
Underinsured motorist coverage applies if the insurer for the negligent party is insolvent
If more than one policy applies to the same accident, the coverage will be proportionate based on the limits of liability
Uninsured motorist coverage can be rejected by the insured.
The insurer must offer uninsured and underinsured motorist coverage, but the insured can reject it in writing
When may an insurance company discriminate based on blindness?
Never
When charging premium rates
When cancelling insurance
At the time of application or insurance
Never
If an insured only has Liability coverage when they purchase a replacement auto, when must they notify the insurer?
4 days
10 days
The day of purchase
14 days
4 days.
If an insured has a newly acquired auto, they must inform the insurer of the purchase within 4 business days if the Declarations page indicates that the insured does not have Collision or Other Than Collision coverage.
A licensed producer was using another name to transact insurance in New Mexico, but the New Mexico Division of Insurance fined the producer $1,000. Within how many days must the producer notify the Arizona Director of Insurance?
20
10
30
There is no requirement to notify the Department
30
Not only must a licensed producer report any disciplinary action by the insurance regulatory agency of any other state or territory of the United States to the Director within 30 days, but the producer must also notify the Director before using an assumed name.
In Arizona, if an insured misses a payment on their personal auto policy, how long do they have to pay the premium before the policy is cancelled?
7 days
10 days
5 days
21 days
7 days.
In Arizona, the grace period for personal auto policies is 7 days. After this, the insurer may mail a notice of cancellation, which is effective once the notice is mailed.
Which of the following is an example of false financial statements?
An agent alters records of premiums received, knowing that the insurance company will be audited by the Director
An agent conceal the amount of the policy’s benefits during solicitations
An agent retains records for a 3-year period and provides them for examination
An agent incorrectly writes a financial statement and later corrects it
An agent alters records of premiums received, knowing that the insurance company will be audited by the Director
Choose the incorrect statement regarding the Subsequent Injury Fund:
The Fund reviews claims involving a pre-existing injury and a subsequent work-related injury
The Fund will determine if permanent compensation can be apportioned between the Fund and insurer
Reimbursements will be made to the insurer after apportionment requests are approved
2% of all premiums received by private insurance carriers in the preceding year go into the state treasury
2% of all premiums received by private insurance carriers in the preceding year go into the state treasury
The industrial commission can direct the payment into the state treasury of up to 1.5% of all premiums received by private insurance carriers during the immediately preceding calendar year.
Producer B tells applicants that if they buy their insurance with the producer’s agency, the applicants will be refunded the first month’s premium. This is an example of which unfair trade practice?
Coercion
Unfair Discrimination
Rebating
Misrepresentation
Rebating
Which state plan provides coverage to employers who cannot obtain insurance in the normal market?
Industrial Commission
Workers’ Compensation Insurance Plan
Assigned Risk Plan
Arizona Workers’ Compensation Fund
Assigned Risk Plan
A policy cannot be issued in Arizona without identifying the name of the producer. Which of the following is a policy that is exempt from this rule?
Liability insurance
Policies issued through producers who receive commission
Policies issued by a vending machine
Life insurance
Policies issued by a vending machine.
Policies issued by a vending machine are not required to identify the producer on the Declarations page of the policy or on any endorsement. The vending machine itself must identify the producer and the insurer.
In the event of nonrenewal or cancellation of commercial risks for reasons other than nonpayment of premium, the insurer must give the named insured ______ days’ notice.
60
10
30
45
45
In the event of nonrenewal and cancellation of commercial risks, the insurer must give the insured 45 days’ notice. Cancellation for nonpayment requires 10 days’ notice.
In the event of premium increase, change in deductible, reduction in limits, or substantial reduction in coverage, the insurer must give the insured notice of at least ____ days before the expiration date of the policy.
60
10
45
30
30
In the event of premium increase, change in deductible, reduction in limits, or substantial reduction in coverage, the insurer must give the insured notice of at least 30 days before the expiration date of the policy.
A vehicle with a load capacity in excess of _________ pounds is not an eligible motor vehicle in Arizona.
1,500
500
1,000
2,000
1500
A motor vehicle is defined in Arizona as a licensed, land, motor-driven vehicle with a load capacity of no more than 1,500 pounds, is not used as a public or livery conveyance, in business transporting passengers for hire, or primarily transporting property or equipment.
Which of the following is false regarding surplus lines brokers in Arizona?
A surplus lines broker is licensed to procure insurance through an unauthorized insurer
A surplus lines broker must also be licensed as a property and casualty producer
The Director must find the individual competent and trustworthy before issuing a license
The surplus lines license must be renewed every 2 years
The surplus lines license must be renewed every 2 years.
In Arizona, a surplus lines license is renewable on the same terms as other producer licenses, which is every 4 years.
Upon the passing of a licensing examination, the Director will issue what type of license to the applicant pending completion of their background investigation?
Probationary
Temporary
Conditional
Permanent
Conditional.
Upon the passing of a licensing examination, the Director will issue a conditional license to the applicant pending completion of the background investigation. On completion of the background check and depending on the results, the Director may issue a permanent or probationary license.
In Arizona, the insurer’s right to recover payment under Medical Payments does not apply to the first _________ paid.
$2,000
$5,000
$500
$1,500
$5,000
In Arizona, the insurer’s right to recover payment under Medical Payments does not apply to the first _________ paid.
$2,000
$5,000
$500
$1,500
$5,000
If an insured does not have Collision or Other Than Collision coverage, and they are in an accident before they inform the insurer of a newly acquired auto, which of the following would be true?
If the insured notifies the insurer within 14 days of purchase, and adds Collision coverage, the loss will be covered
The loss will not be covered because the insured did not notify the insurer before the loss
The loss will not be covered because the insured did not have Collision coverage
If the insured notifies the insurer within 4 days of purchase, and pays a $500 deductible, the loss will be covered
If the insured notifies the insurer within 4 days of purchase, and pays a $500 deductible, the loss will be covered
If a first party claim is not paid within how many days after the receipt of adequate proof of loss, the insurer must pay interest from the date the claim is received?
10
15
30
20
30
According to Arizona’s UM/UIM coverage, what happens if more than one policy applies to the accident?
UM/UIM coverage is primary if another policy applies to the accident
The insured can select which policy will apply first
UM/UIM coverage is excess if another policy applies to the accident
The insured can select one policy that will apply
The insured can select one policy that will apply.
If more than one policy applies to the same accident, the insured may select the one policy that will apply.
Before granting a license, the Director may ask for which of the following type of information?
Copy of tax returns
Verification of medical history
A set of fingerprints
Proof of college degree
A set of fingerprints
Which of the following applies when the Director revokes a producer’s license for violating the Insurance Code?
Producer must deliver the license to the Director
Producer can write surplus lines coverage with nonadmitted companies
Producer can write business for another producer
Producer’s revoked license will not be valid for 3 years
Producer must deliver the license to the Director
Upon suspension or revocation, the licensee must deliver the license to the Director, and the Director will not consider issuing a new license for 1 year.
If an insurer notifies an insured of their eligibility for the Arizona Automobile Liability Plan, what most likely just occurred?
The insured’s policy was cancelled
The insured increased their limits of liability
The insured purchased a new policy
The insured’s policy was renewed
The insured’s policy was cancelled.
Insurer’s are required to notify an individual of their possible eligibility for the Arizona Automobile Liability Plan when the insurer has cancelled or nonrenewed the policy.
How many hours of ethics must be included in the total of 48 hours of continuing education a producer must complete to renew a license?
6
3
15
10
6
How many hours of ethics must be included in the total of 48 hours of continuing education a producer must complete to renew a license?
6
3
15
10
6
A personal property policy that has been in effect for ________ days or more can be cancelled for nonpayment of premium.
60
30
90
120
60
