Law Flashcards
Basic Automobile Insurance Policy Coverage Selection
A prospective insured is electing a Basic Auto policy.
If an auto insurer issues a temporary identification card for an insured, when does the temporary card expire?
After 20 days
A temporary work authority is granted and valid up to ________ days after being issued.
60
A producer’s license that has been suspended may be reinstated:
Once the suspension period is complete
What is the purpose of a certificate of authority?
Authorizes an insurer to transact insurance business
For a first-time violation of a cease and desist order, the Commissioner may impose a penalty of up to:
If the person violated a cease and desist order, the Commissioner may impose a fine of up to $5,000 for the first violation.
A diamond ring that is insured on a Personal Articles Floater receives what type of coverage?
Open
Which of the following lines is subject to the Commercial Insurance Deregulation Act of 1982?
Commercial Liability
With respect to a producer’s fiduciary capacity, which of the following is true?
A producer is required to issue receipts for premiums paid and keep copies of receipts. A producer may not commingle the insurer’s funds with their personal funds. A producer must remit premiums to the insurer entitled to them within 5 business days of receipt.
Fraud Prevention and Detection Plans are established and maintained by:
Every Insurer
An applicant who cannot obtain automobile insurance in the voluntary market is qualified for the Commercial Automobile Insurance Plan if their automobile:
A qualified applicant for CAIP is the owner or registrant of a motor vehicle registered in New Jersey or to be registered within 60 days, who is unable to obtain automobile insurance in New Jersey in the voluntary market in the previous 60 days.
In New Jersey, what is the minimum term for a producer’s initial license?
18 months
If an insured has their license suspended for refusing to take a chemical test, the auto insurer must mail a notice of cancellation within how many days before the effective date?
An auto insurer must provide a notice of cancellation at least 20 days before the effective date of the cancellation. The only exception is cancellation due to nonpayment of premium, which requires a 15-day notice
A producer has received a policy from the insurer. According to New Jersey’s Standards of Conduct, when must the producer deliver the policy to the insured?
Within 10 days
Which of the following is correct about choosing a tort exemption?
With the No Limitation on Lawsuit Option, a person is liable for non-economic loss, and liability may extend to persons who are not required to keep PIP coverage and may apply whether or not the person has optional liability coverage.
Insurers must maintain nonrenewal records for at least how many years?
5
Which of the following statements correctly describes requirements for record keeping by producers?
Books and records must be maintained for a period of 5 years after the termination of coverage. Entries to books and records must be made at least once every 30 days. Books and records may be maintained electronically if they can be reproduced by hard copy.
In 1944, which case did the Supreme Court reverse Paul vs. Virginia by ruling that insurance was subject to federal regulations?
In 1944, the U.S. vs. South-Eastern Underwriters Association the Supreme Court reversed Paul vs. Virginia and ruled that insurance was interstate commerce and when conducted across state lines, subject to federal regulations.
What is the specific name of the process a producer must follow by attempting to place the risk with authorized insurers before a surplus lines agent?
Diligent effort is a process by which a producer places coverage with a surplus lines insurer after the risk has been declined by 3 authorized insurers whom the producer believes, in good faith, might insure the risk.
To which insurance would the Commercial Insurance Deregulation Act of 1982 apply?
The Commercial Insurance Deregulation Act excludes coverage for Ocean Marine, Title, Mortgage Guaranty, Workers’ Compensation, Medical Malpractice, Reinsurance, NJIUA risks, insurance issued by health service corporations, and insurance issued for personal or household purposes.
Authorized Business Entity
One officer or partner must be licensed
A completed application signed by all licensed partners and officers is required
There must be a designated producer who takes responsibility for the entity’s compliance
Nonresident business entities may conduct insurance business in New Jersey as long as the Commissioner has given them a certificate of authority.
A producer becomes permanently disabled and the Commissioner issued a temporary producer license to their spouse for a period up to ______ days to assist the producer’s insurance business.
The Commissioner may issue a temporary insurance producer license for a period not to exceed 180 days without requiring an examination if it is determined the temporary license is necessary to sell the insurance business, train and license new personnel, or the producer recovers or returns to the business.
A temporary work authority has been granted to an indivdiual for 90 days in New Jersey. The individual is most likely:
A nonresident producer who has moved into New Jersey will be granted a 90-day temporary work authority, and the producer must change their address within that time. For applicants who want to begin work before receiving their initial license, only a 60-day temporary work authority will be granted. For individuals that are substituting for a disabled or deceased producer, a temporary license will be granted up to 180 days.
A temporary work authority is granted and valid up to ________ days after being issued.
60
Under Fair Credit Reporting Act, a licensee must give notice to the consumer no later than?
3 days
Who investigates consumer reports
Fair Credit Reporting Act
Principal (obligor)
The party owning the duty, performance, honesty and is usually the party purchasing the bond. Usually the insurance agents client or insurd
Surety (guarantor)
Guarting the duty, performance, honesty of the principal.
Issues the bond, also called guarantor, usually insurance company
Obligee
THe party paid by the surety, if the principals fails to perform
Contract bonds
Gurantee the contractors perform according to a construction contract
Bid bond (contract bond)
Gurantee that the contaractor making the big will, upon acceptable of the bid by the contractors customers (obligee) proceed with the contract
Performacne bond (contractor)
Guarantee the contractor will perform as agree upon.
Labor and Material Bond
A gurantee the bills for labor and material called for in construction will be paid
Court Bonds Judicial and Fiduciary
Judicial - Guarantee parties fullfill their statutory obligations in conenction with court proceedings
Fiduciary - Guarantee the honest and faithful performance of executors, truestees, and other fiduciaries
Fidelity bond
Cover an employer from direct loss due to fradulatnet and dishoenest acts (namely theft) by their employees.
Indiviudal bond - Used when employer wishs to bond a single employee
Name schedule - bond several employess
Position - Desire to bond specific position, regalrdess of who fills the position
Blanket bond - desires to cover all employees
Only what HO are open
Ho 3 (a &B)
HO 5 A and C
Workers comp part 1
Workers comp insurance
Works comp part 2
Employees Liability Insurance
Workers comp part 3
Other states insurance
Monopolistic states
Workers comp part 4
Insureds duties if injury occurs
Workers comp part 5
Premium
Manuals
Classification
Remuneration
Records / Audit
Workers comp part 6
Conditions
Inspection
Transfer of rights
Sole representative
Common carrier
Carries for a fee from one palce to another - general public (trucker)
Contract carrier
Carries for a fee from one place to another - Not general piblic, customer based (motor carrier coverage form)
MCS 90
Names of the motor carrier and insruance company
Policy number and dates
Isnurance providing coverage is primary or ecess
Limits of liability
NOTHING ABOUT PREMIUM
Insured must send a signed statement of loss to insurance company within how many days
60
Implied Authority
Insurance company gives its agents authority that was not formally expressed or communicated
Not written
Captive Agents
Exclusive to one company
Fraud
Intentional misrepresentation of material facts
Contract of Adhesion
Accepted or rejected by applicant. Judge usually holds that any ambiguity goes in favor to insured
Insuring agreement contrains
the insurers promise to pay for loss
Coverages the contract offers
Perils insured againast
Short rate cancellation
Upon cancel, insurer keeps all earned premium + overhead
Conditions
Insurers and insureds rights and duities
Annual Transit Policy
Protects shipper or receiver of goods aginst loss to goods in transit - ships all the time
Trip Transit Policy
used to insure single shipments of goods that have occasial shipments
Additional acquired property is automatically covered for
30 days
The insured must send signed statement of loss to the insurance company within how many days
60
Limited Liability company insureds
The named insured
Managers
Named insureds employees
BOP eligibility
<100 employes
<$6mm revenue
35k sqft
Covered items under the building coverage (BOP)
Completed additions
Perm installed mach
Fixtures
PP to main / service building
Additions under const.
Alterations
Materials
BOP Exterior glass
Exterior building glass is covered as business personal property for insureds who are tenants and do not have building coverage
BOP Perils O/N
Open
BOP Debris
Addiitonal cov
25% of loss
additional 25k if loss exceeds limits
BOP Collapse
Additional cov
BOP Business Income
addiitonal cov
must be direct physical loss to proeprty at premise
Includes vehicile or in the open within 100 of the premises
pay = 12 months
Extra Expense BOP
Additional Cov
allows reimbursement for additional costs as insudered incurs to avoid
BOP Increased cost of construction
Additional cov
10k limit
REplacement cost
Civil authority
Additional Cov
72 hours
Forgery and altetation
Additional Cov
2.5k
includes defense costs
BOP Business Inc from Depdent porp
Addiitonal cov
Insured sustains physical loss or damage at dependent prop
5k limit
Electronic data
Additional cov
10k
Fungi, wet rot, dry rot
15k limit
addiitonal cov
BOP Addiitonal cov more
Money orders - 1k
Pollution clean up -10k
Pres of prop - 30days
fire dept charge - 2.5k
Water damage - no flood
Glass
Fire exting - 5k
BOP Cov extensions
Newly acquired
Building - 30days 250k
Property 30 days 100k
Trees and detached signs
2.5k
1k per tree
Personal prop of others(not custoemrs) employee prop example
2.5k
Valuable papers and recorsd 10k
BOP Optional COv
Employee dishonesty
Equipment breakdown
Outdoor sign
Money & Securitiy
BOP Deductible
$500
Exclude PIP benefits from people who
Owned and operated an auto in NJ without PIP coverage
Yaht Policies provide physical damages and liability coverage. What is the liability section called
Protection and indemnity insurance
Property and Liability Guaranty Association
May not disclose fact that an insurer is a memeber of the assocation for the purpose eof solicting insurance
cover claims up to 300k, no fault auto 75k
Cover all claims before or within 90 days
Standard term of an NJ producer
2 years
PAIP risk, prop damage, rates
Every insurer that writes auto insruance in NJ must participate in PAIP.
Risks distributed =
PAIP provides property damage liability and PIP protection
Income contribution benefits under personal injury protection
$100
CAIP Applicants
must live in NJ and resigster in NJ
CAIP Liability
provides liability cov & Physical damage
2 excecptions for flood coverage
silo and grain storage
CAIP Eligibility
certify within 60 days of their application they tried to get insurance in volunter market
A producer license lapse may reinstate
12 months
Purpose of an Insruance Guaranty Association
Protect policyholders against inolvencies by insurer
Experience rating
Compares injury record of an individual risk with standard performance of an average risk of the same size and kind
Prelicensing exam hours
40 hours
Prelicensing exam per line hours
20
PIP provides what kind of benefits
Death Benefits
Medical exp
Income cont 100 a week
Ess serv 12 a day
Consequence of producer license revoked
May apply after 5 years
FAIR plan limit of property insured
1.5mm
Commissioner powers
Revoke license
Examine insurers
Cease and desist
Conduct investigations
Every insurer and rating org must file rates within days
30 days after they become effective
Binder coverage days
10 to 60
FAIR COVERAGE
Real prop in urban area
Tangible prop
Fair no coverage
auto
farm risks
vacant building
Physical deficient structures
Ceed to assumer
Reinsurance procedure
Temporary license issued by NJ
180 days 6 months
Paul V virgina
Attempt to regular an insurance company domiciled in anotehr state
Sale and issuance of insureance was the right of each state
Not an article of commerce but indemnity
Limited Insurance Rep
Person who authorized or solicit or effect insurance contracts involving a particular line of business that does not require same level of proressional
No exmeptions from tort liability if the insured has sustained
Permanent disability or injury
PIP pedestrains coverage
Injured by a car / struck by objects propelled by the car
Section II does not cover injuries HO
Injuries to the insured or to resident family members.
HO Section II covers
They cover personal liability of the insured and medical expenses of a person injured on the insured’s premises
WHen can producers share commisison
Only wiht another licensed producer, whether resident or non resident
Rebating
Giving policyholder something of value that is not inclued in the policy. - giving part of agents commision to the policyholder or paying premiums for hte policyholder
Example of self regulatory body that develops model law for individual states
National Assostaitno of Insruance COmmissioners
Aleatory
unequal values
