Kansas Personal Lines State Law 2022 Flashcards

1
Q

Which of the following penalties can the Commissioner impose for committing an unfair method of competition or an unfair trade practice?

A. A cease and desist order
B. A fine not to exceed an aggregate of $100,000 in any 6-month period
C. Imprisonment for up to 5 years in prison
D. A fine not more than $200 per violation in any 6-month period

A

A. A cease and desist order

***The Commissioner has the power to issue a cease and desist order. Fines are capped at $1,000 per violation with an aggregate limit of $10,000 in any 6-month period. The Commissioner does not have the power to imprison.

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2
Q

What is a domestic insurance company? (KS)

A

A domestic company is an insurance company or risk retention group licensed and incorporated in Kansas.

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3
Q

What is a foreign insurance company? (KS)

A

A foreign company is an insurance company or risk retention group not incorporated in Kansas, but licensed and registered to do business in Kansas.

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4
Q

It is unlawful for any insurer to transact insurance business in Kansas without a ________ __ _________.

A

Certificate of Authority

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5
Q

All of the following CE requirements are correct, except:

A. 12 hours for property, casualty, or personal lines
B. 12 hours for life and/or health
C. Continuing education courses are required every 4 years
D. 4 hours for title

A

C. Continuing education courses are required every 4 years

***CE is required biennially (every 2 years)

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6
Q

The Commissioner of Insurance must examine the financial condition of each producer or insurer at least once:

A. Every 2 years
B. Every year
C. Every 10 years
D. Every 5 years

A

D. Every 5 years

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7
Q

To do business in Kansas, foreign companies must possess the required amount of surplus and paid-up capital (money not borrowed) and also must do the following:
Must have been in operation at least ___ years.
a. 5
b. 1
c. 2
d. 3

A

d. 3 years

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8
Q

Who is an individual or business entity required to be licensed under Kansas law in order to sell, solicit, or negotiate insurance.

A

A Producer

***The term producer also includes broker unless otherwise specified.

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9
Q

Who is an individual or business entity that is licensed to act as an insurance agent and maintains a principal place of residence or business in Kansas.

A

A Resident Producer

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10
Q

For an ______________ a $15 registration fee must be paid at license application and again at renewal, by May 1st once every 2 years

A

Auto Club Producer

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11
Q

An auto club must notify the Commissioner within __ days after terminating a producer’s appointment.

a. 90
b. 30
c. 180
d. 120

A

b. 180 days

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12
Q

To transact excess lines insurance and place business with nonadmitted carriers, a property/casualty licensed producer must also have an _____ lines license.

A

excess

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13
Q

Anyone at least __ years of age who wants to transact business as an insurance producer must submit a license application to the Commissioner of Insurance.

a. 21
b. 18
c. 25
d. 19

A

b. 18 years of age

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14
Q

A producer appointed by an auto club to sell its memberships is a _________.

A

Auto Club Producer

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15
Q

A producer may not transact insurance without a certification (appointment) from at least 1 insurer. Insurers must notify the Department within __ days of the appointment.

A

30 days

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16
Q

Producers may not transact insurance business in Kansas unless:

A. The Commissioner is notified within 90 days of the appointment
B. There is reciprocity
C. There is a certification from at least 1 insurer
D. The licensee has an endorsement by another producer

A

C. There is a certification from at least 1 insurer

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17
Q

The Commissioner can waive the licensing examination if the applicant:

a. Is applying for a travel insurance producer license
b. Was previously licensed in Kansas and the license lapsed less than 2 years before the current application
c. Passed the licensing exam, but due to a clerical error by an insurance company, was not properly certified (appointed)
d. Is currently licensed in good standing in another state for the same lines of authority, or was licensed for the same lines of authority in another state and that license expired or was cancelled in good standing within 90 days prior to the Kansas application

A

A, B, C & D

***The most important thing to remember is that a license exam can be waived if the license lapsed less than 2 years before the current application and was licensed in KS or was cancelled in good standing 90 days prior to the KS application

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18
Q

A _________ in good standing must not be revoked, suspended, denied renewal, or otherwise under disciplinary action.

A

License

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19
Q

If a Producer License is in good standing, it renews ________so long as continued education is reported to the Commissioner by the producer’s renewal date.

A

biennially

***every 2 years

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20
Q

When a producer lives in Missouri and wants to do business in Kansas, they must first:

A. Obtain a nonresident license in Kansas
B. Relinquish their Missouri resident license
C. Open an office in Kansas
D. Obtain permission from the Commissioner of Insurance in Missouri

A

A. Obtain a nonresident license in Kansas

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21
Q

The Continuing Education (CE) requirements for Crop is ___ hours.

a. 12 hours
b. 3 hours
c. 2 hours
d. 1 hour

A

C. 2 hours

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22
Q

The Continuing Education (CE) requirements for Title is ___ hours.

a. 2 hours
b. 4 hours
c. 6 hours
d. 1 hour

A

B. 4 hours

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23
Q

The Continuing Education (CE) requirements for life, health, property, casualty, variable contracts, personal lines are ___ hours.

a. 12
b. 8
c. 20
d. 16

A

a. 12 hours

***These lines are also subject to additional stipulations:
🔘At least 1 hour must be an ethics course
🔘Only 3 hours of agency management courses will count toward the requirements

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24
Q

An agent who has been licensed for more than 1 year must file on or before their ______ due date a report with the Commissioner certifying that CE requirements have been met.

A

biennial

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25
Q

If the Commissioner does not receive the required report for renewal, the producer’s corresponding license(s) will be suspended and a $____ fine assessed for each suspended license.

a. $300
b. $100
c. $25
d. $500

A

b. $100

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26
Q

In cases involving medical hardship or military service, the Commissioner may extend the time within which to complete CE requirements for a period up to __ days.

a. 30
b. 365
c. 180
d. 90

A

c. 180 days

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27
Q

Each producer must notify the Department of Insurance within ___ days of change of information.

a. 30
b. 90
c. 14
d. 180

A

a. 30 days

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28
Q

The Continuing Education (CE) requirements for Pre-need is ___ hours.

a. 2
b. 1
c. 0
d. 3

A

c. 0 hours

***No CE hours are required to renew a limited lines license for selling pre-need funeral insurance or annuity products.

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29
Q

During the first 60 days of an auto policy, an insurer may cancel the policy for what reasons?

A

The insurer can cancel an auto policy within the first 60 days for any reason.

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30
Q

After a producer has a change of residence, they must:

A. Notify the Department of Insurance within 90 days
B. Notify the Department of Insurance within 20 days
C. Notify the Department of Insurance within 60 days
D. Notify the Department of Insurance within 30 days

A

D. Notify the Department of Insurance within 30 days

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31
Q

______ is offering any rebate of premiums payable, any special favor in dividends or other benefits, or any valuable consideration or inducement not specified in the policy.

a. twisting
b. rebating
c. coercion
d. subrogating

A

b. rebating

***This is defined by statute as unfair methods of competition and unfair or deceptive acts or practices

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32
Q

_______ is making, issuing, or circulating any statement that misrepresents the benefits, advantages, conditions, or terms of any policy or any person’s or insurer’s financial condition.

a. twisting
b. coercing
c. misrepresentation
d. false advertising

A

C. Misrepresentation

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33
Q

________________ is publishing or disseminating any untrue, deceptive, or misleading statement about how a person or entity conducts business.

a. misrepresentation
b. false advertising
c. defamation
d. rebating

A

b. false advertising

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34
Q

When an insurer delivers a property or casualty insurance policy in Kansas, any of the following would be acceptable methods of delivery, except:

A. Oral communication that can be reliably stored and reproduced
B. Posting an endorsement on the insurer's website as long as the endorsement contains no personally identifiable information
C. Electronic delivery without needing the insured's consent
D. First-class mail
A

C. Electronic delivery without needing the insured’s consent

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35
Q

______ is making any false or maliciously critical statement regarding the financial condition of any person, with the intent to injure that person.

a. twisting
b. defamation
c. coercing
d. rebating

A

b. defamation

36
Q

______, ______ & _________ is entering into an agreement to take action resulting in an unreasonable restraint of, or monopoly in, the business of insurance.

A

Boycott, Coercion, Intimidation

37
Q

________ is misrepresenting information to a consumer in order to compel them to lapse, forfeit, exchange, or surrender an existing insurance policy.

a. misrepresentation
b. coercing
c. twisting
d. boycotting

A

c. twisting

38
Q

__________ _________ is permitting individuals of the same rating class to be charged different premiums or rates, including classifications based on race, creed, national origin, or religion.

A

Unfair Discrimination

39
Q

Which of the following scenarios is NOT considered an example of rebating?

A. Offering any rebate of premium
B. Accepting the applicant’s premium for a policy
C. Giving the insured tickets to the Super Bowl
D. Offering special favor in dividends or other benefits

A

B. Accepting the applicant’s premium for a policy

***Accepting the premium at the time of application will bind the coverage as long as the insurer will issue the policy. Offering cash, special dividends, or any valuable consideration as an inducement to purchase the policy is rebating.

40
Q

Under Kansas law, which of the following rate discrimination practices is allowed?

A. Based solely on geographic location
B. Between a blind person and a sighted person
C. Based solely on the insured’s age in auto liability policies
D. Based on actuarial data

A

D. Based on actuarial data

***Rate differentials must be based on sound actuarial principles. Geographic location is an allowable factor when based on sound underwriting and actuarial data, but using geographic location as the sole determining factor is prohibited. In auto policies, Kansas law prohibits discrimination on the basis of age alone.

41
Q

_________ ___________ are assessed the amounts necessary to administer the program and pay covered claims, based on the proportion of each insurer’s written premiums to the net direct written premiums of all member insurers during the previous calendar year

A

Member insurers

42
Q

Claims paid by the Kansas Insurance Guaranty Association when an insurer is insolvent come from which of the following?

A. Federal Guaranty Association Fund
B. Assessments from member companies
C. Premiums collected from insureds
D. State Guaranty Fund

A

B. Assessments from member companies

43
Q

Which of the following acts are considered improper claim settlement practices:

a. Promptly acknowledge communications pertinent to a claim within 10 working days, insurers must acknowledge receipt of a notice of claim and respond to any other communications
b. Insurers must respond to Department inquiries within 15 working days
c. Use reasonable standards in the prompt investigation of claims. Insurers must complete the investigation of a claim within 30 days unless such an investigation cannot reasonably be completed within that time.
d. Insurers must notify the claimant of approval/denial within 15 days after receiving proof of loss
e. Making claim payments accompanied by statements indicating the coverage under which payments are being made

A

A, B, C & D

44
Q

Requiring the claimant to submit ____ __ ____before paying is not an unfair settlement practice, nor is paying for a loss in full while issuing language that releases the insurer from liability.

A

Proof of Loss

45
Q

It is illegal for an agent to submit a claim for the insured without notifying the insured that the agent did which of the following?

A. Altered the application
B. Called the claim representative
C. Provided a proof of loss
D. Notified the police

A

A. Altered the application

46
Q

Kansas Insurance Code states that when an insured property is damaged by fire or tornado, the insurer must provide the insured with the proper forms and instructions for submitting proof of loss within __ days after receiving notice of the loss.

a. 30
b. 7
c. 10
d. 90

A

c. 10

***If the insurer fails to comply with this requirement, it cannot use the insured’s failure to submit proof of loss as a defense in a lawsuit.

***In all cases, the insured must be given reasonable time to complete the proof of loss. Furnishing forms and instructions does not constitute an admission of liability on the insurer’s part.

47
Q

If an insured’s home in Kansas is damaged by fire, within how many days must the insurance company provide the insured with the proper forms and instructions to complete a proof of loss?

A. 10
B. 5
C. 15
D. 20

A

A. 10 days

***The Kansas Insurance Code states that when an insured property is damaged by fire or tornado, the insurer must provide the insured with proper blank forms and instructions for a proof of loss within 10 days after receiving notice of the loss.

48
Q

Marine/inland marine insurance issued in Kansas will cover which of the following?

A. Storage of merchandise
B. Building improvements
C. Pipelines
D. Money and securities in a bank

A

C. Pipelines

***Inland marine insurance covers instrumentalities of transportation or communication, such as bridges, piers, pipelines, telephone lines, TV towers, and outdoor cranes.

49
Q

If a license is suspended due to failure to maintain and report continuing education the Producer has ___ days to end the suspension by furnishing proof of CE completion and paying all fines. If the producer does not do this, the license expires.

A

90 days

50
Q

Under the FAIR plan property coverage may be turned down for:

A

🔘Vacancy
🔘Poor housekeeping
🔘Building not in compliance with building or safety codes

51
Q

What properties are eligible for the FAIR plan?

a. vacant
b. dwelling
c. commercial
d. farm
e. manufacturing

A

B & C - the other property types are excluded

52
Q

Kansas FAIR Plan policies are effective for:

A. 1 year
B. 9 months
C. 6 months
D. 2 years

A

A. 1 year

53
Q

Kansas auto liability insurers must provide_______________ coverage on every policy

A

Personal Injury Protection (PIP)

54
Q

This required coverage covers lost income up to $900 per month as well as substitution benefits incurred by survivors following the death of the insured due to an auto accident. What benefit is it?

a. substitution
b. medical
c. survivors
d. rehabilitation

A

c. survivors’

***this required coverage is in addition to PIP

55
Q

What required coverage requires a minimum of $900 per month for up to 1 year to cover lost wages when the sustained injury keeps the insured from engaging in available and appropriate gainful activity

a. rehabilitation
b. funeral
c. disability
d. substitution

A

c. disability benefits

***in addition to PIP this is a required coverage

56
Q

What required coverage has a minimum of $4,500 per person to cover necessary medical expenses?

a. disability
b. rehabilitation
c. survivors
d. medical

A

d. medical

***in addition to PIP this is a required coverage

57
Q

What required coverage pays up to $25 a day for up to 365 days to cover cost of hiring someone to assume household duties the insured is unable to perform due to a covered injury?

a. disability
b. substitution
c. medical
d. survivor

A

b. substitution

**this is a required covered in addition to PIP

58
Q

What coverage pays out a minimum $4,500 per person to cover reasonable expenses for psychiatric or psychological services, occupational therapy, or other expenses necessary to prepare the injured person to return to gainful employment?

a. rehabilitation
b. medical
c. disability
d. substitute

A

a. rehabilitation

***this required coverage is in addition to PIP

59
Q

The ______ benefits covers memorial-service costs up to $2,000.

a. survivors’
b. medical
c. funeral
d. substitute

A

c. funeral

***this required coverage is in addition to PIP

60
Q

What are the required auto liability insurance limits in Kansas?

a. 15/30/20
b. 25/50/25
c. 10/20/30
d. 25/75/50

A

b. 25/50/25

$25,000 per person
$50,000 per occurrence for bodily injury
$25,000 per occurrence for property damage

61
Q

Payments on PIP are considered overdue after __ days.

a. 14
b. 90
c. 30
d. 60

A

c. 30

62
Q

Overdue payments on PIP are subject to a __% annual simple interest.

a. 16
b. 15
c. 18
d. 20

A

c. 18

63
Q

A _______________ ______________ is an individual or business entity doing business in Kansas, but who is a resident of another state and licensed in that state in good standing.

A

Nonresident Producer

***The producer must make application and the home state must award nonresident producer licenses to Kansas residents on the same basis.

64
Q

A property policy/insurer is commonly referred to as a ____ policy/insurer.

A

Fire

65
Q

PIP payments must be paid ________.

A

Promptly - 30 days

66
Q

According to the Kansas Automobile Injury Reparations Act, PIP coverage must provide which of the following benefits?

A. Minimum disability benefits up to $1,500 per month
B. Minimum coverage for medical benefits is $5,000
C. Survivors’ benefits cover lost income up to $1,000/month
D. Substitution benefits are required with coverage up to $25 per day

A

D. Substitution benefits are required with coverage up to $25/day.

***Substitution benefits are required with coverage up to $25 per day for up to 365 days. Minimum disability benefits and survivors’ benefits are $900/month, and minimum medical benefits are $4,500.

67
Q

In Kansas, which of the following is correct about UM/UIM coverage?

A. The insured may reject the coverage in writing
B. The minimum Underinsured Motorists coverage limits are 100/300
C. UM and UIM are required coverages
D. The minimum Uninsured Motorists coverage limits are 50/100

A

C UM & UIM are required coverages

68
Q

If a fire (property) or casualty insurer issues a policy that provides for cancellation at the option of the insurer, Kansas law requires at least ___ days’ notice prior to cancellation.

A

30 days’

69
Q

An insurer who intends to cancel or refuse renewal of an auto policy for any reason except _____________ must provide 30 days’ notice to the insured.

A

Non Payment of Premium

70
Q

After 60 days, an insurer can only cancel the policy for what reasons?

A

🖖Nonpayment of premium
🖖The insurance was obtained through fraudulent misrepresentation
🖖The insured violates any of the terms or conditions of the policy
🖖The named insured, another household resident, or regular user of the vehicle
🖖Has their driver’s license suspended or revoked
🖖Is or becomes subject to epilepsy or heart attack and cannot offer proof from a physician affirming the
person’s ability to operate a motor vehicle
🖖The named insured, another household resident, or regular user of the vehicle was convicted during the 36 months before the policy began, or is convicted during the policy period, of:
🖖Any felony
🖖Criminal negligence resulting in death/homicide/assault while operating a motor vehicle
🖖Operating a motor vehicle while intoxicated or under the influence of drugs
🖖Leaving the scene of an accident without stopping to report
🖖Making false statements on a driver’s license application
🖖Theft of a motor vehicle
🖖3 moving violations within 18 months

71
Q

PIP coverage required by the Kansas Automobile Injury Reparations Act includes all of the following, except:

A. The maximum required coverage for survivors’ benefits is $500 per month
B. The minimum required coverage for medical benefits is $4,500
C. The maximum required coverage for funeral benefits is $2,000 per person
D. The minimum coverage required for disability benefits is $900 per month

A

A. The maximum required coverage for survivors’ benefits is $500 per month

***Survivors’ benefits under the Kansas Automobile Injury Reparations Act will cover lost income up to $900 per month and substitution benefits incurred by survivors.

72
Q

An insurer may deliver, store, and present evidence of insurance coverage by electronic means to an insured as long as the insured ______ to that method of delivery and has not withdrawn the ______.

A

consent

73
Q

What reasons can an insurer refuse to renew a policy for?

A

🖖The Commissioner orders the insurer to reduce premium volume to preserve financial integrity
🖖The insurer no longer does business in Kansas
🖖Medical evidence that the insured has a disability that impairs safe and reasonable driving
🖖Substantial change in risk
🖖The policy has been continuously in effect for 5 years after the first anniversary date

74
Q

If an auto policy is cancelled or nonrenewed for any reason other than nonpayment of premium, the insurer must notify the insured of their possible eligibility for coverage under the _______ ______ ______ ______ ______.

A

Kansas Automobile Assigned Risk Plan

75
Q

An automobile policy issued in Kansas may be cancelled after it has been in force for 60 days if the insured was guilty of which of the following in the past 3 years?

A. Making false statements on the vehicle registration
B. Leaving the scene of an accident without stopping to report
C. 2 moving violations in the past 3 years
D. Being a passenger in a car while intoxicated

A

B. Leaving the scene of an accident without stopping to report

***The policy may also be cancelled if the insured had a 3rd violation within a period of 18 months, made false statements in the application for a driver’s license, or operated a motor vehicle in an intoxicated condition or under the influence of drugs.

76
Q

Insurers must file all rates, rating plans, and classification manuals with the Commissioner, except those applicable to title insurance policies in counties with a population under _______.

a. 50,000
b. 10,000
c. 25,000
d. 5,000

A

b. 10,000

77
Q

For personal lines, rates are considered approved if they have not been disapproved by the Commissioner __ days after filing.

a. 60
b. 30
c. 90
d. 120

A

b. 30

78
Q

Which of the following is NOT an example of unfair discrimination in property/casualty insurance issued in Kansas?

A. Limiting the amount of coverage available because of the applicant’s sex
B. Refusing to issue a homeowner’s policy because of the zip code of the property’s location
C. Charging higher premiums for a property in a certain geographic area based on sound underwriting and actuarial data
D. Offering a lower premium to one of two individuals of the same class and risk

A

C. Charging higher premiums for a property in a certain geographic area based on sound underwriting and actuarial data

***In property and casualty underwriting, geographic location is an allowable factor only when based on sound underwriting and actuarial data.

79
Q

The Kansas Automobile Assigned Risk Plan is designed for which of the following persons?

A. A person who no longer can get normal coverage due to claims history
B. A person who uses the automobile for deliveries
C. A person who needs only basic liability insurance
D. A person who has a high-value automobile

A

A. A person who no longer can get normal coverage due to claims history

**The Automobile Assigned Risk Plan is for individuals who have been unable to obtain auto insurance through normal markets.

80
Q

All of the following qualifications are required for a producer license, except:

A. Must not have been convicted of any misdemeanor or felony
B. Pass a licensing examination for each class of insurance to be transacted
C. Be at least 21 years of age
D. Pay the appropriate application fee

A

C. Be at least 21 years of age

***correct answer would be 18 years of age

81
Q

The Commissioner may issue a temporary license for up to ____ days.

a. 60
b. 90
c. 180
d. 365

A

c. 180

82
Q

Insurer XYZ certifies a producer on June 1. The insurer must notify the Department of Insurance of the appointment by:

A. July 31
B. July 1
C. June 10
D. June 15

A

B. July 1

83
Q

To settle claims, Kansas auto insurers may elect to pay a cash settlement that:

A. Can purchase a comparable auto, including taxes and fees
B. Only covers costs in the event of total loss
C. Only covers repairs to the damaged vehicle
D. Can purchase a comparable auto, excluding taxes and fees

A

A. Can purchase a comparable auto, including taxes and fees

84
Q

The Commissioner of Insurance is elected to office every __ year(s).

a. 2
b. 4
c. 5
d. 1

A

b. 4

85
Q

Producers may not transact insurance business in Kansas, unless:

a. There is a certification from at least 1 insurer
b. There is reciprocity
c. The Commissioner is notified within 90 days of the appointment
d. The licensee has an endorsement by another producer

A

A. There is a certification from at least 1 insurer

*** In order to transact insurance business in Kansas, a producer must be certified by at least 1 insurer.

86
Q

The Commissioner has the authority to suspend the license of all of the following licensees, except:

A. A licensee who forgot to pay state income tax
B. A licensee who was convicted of a misdemeanor not relating to insurance
C. A licensee who unknowingly accepts business from an unlicensed producer
D. A licensee who does not pay required child support

A

C. A licensee who unknowingly accepts business from an unlicensed producer