P&C2

Question 1

All of the following are unfair claims settlement practices except?
A) Failing to adopt and implement reasonable standards for settling claims
B) Failing to acknowledge pertinent communication pertaining to a claim.
C) Suggesting negotiations in settling the claim
D) Refusing to pay claims without conducting a reasonable investigation

Answer 1

C) Suggesting negotiations in the claim.

Question 2

Which of the following best describes the concept of company solvency?

Answer 2

Maintaining capital or surplus in excess of the required amount.

Question 3

Which of the following endorsements is used by individual business owners who use company vehicles for personal use rather than purchasing a personal vehicle.

Answer 3

Individual named insured

Question 4

Employment practices liability insurance (EPLI) would NOT cover claims arising from…

Answer 4

Deliberate Law Violation

Question 5

The part of the insurance contract that describes the covered perils, and the nature of coverage of the contractual agreement between the insurer and the insured is called the…

Answer 5

Insuring agreement

Question 6

Within how many days of requesting an Investigative Consumer Report must an insurer notify the consumer in writing that the report will be obtained?

Answer 6

3 days

Question 7

If an insured bakery is sued because its marketing states that products of another bakery may not be safe, which coverage of a commercial general liability will defend the suit?

Answer 7

Personal and advertising injury liability

Question 8

The Business Pursuits endorsement under Section II of a homeowners policy will cover all of the following EXCEPT
A) bodily injury to the insured
B) all business pursuits
C) business liability
D) insured's activities

Answer 8

Business liability

Question 9

Which of the following terms refers to other insurance that is written on the same risk, but not on the same coverage basis?

Answer 9

Noncurrency

Question 10

The BOP liability cover at will pay for necessary medical expenses of others incurred within what maximum time period?

Answer 10

1 year

Question 11

Bob was issued a temp insurance producers license 90 days ago. The license will expire in how many days?

Answer 11

90

Question 12

When a producer was reviewing a potential customer’s coverage written by another company, the producer made several remarks that were maliciously critical of that insurer. The producer could be found guilty of

Answer 12

Defamation

Question 13

Which of the following is NOT considered a residual market?
A) State Property and Casualty Guaranty Association
B) Joint Underwriting Association
C) FAIR Plan
D) Assigned risk auto plan

Answer 13

State Property and Casualty Guaranty Association

Question 14

In Oregon, how long does a producer have to notify the Director of a change in location or name?

Answer 14

30 days

Question 15

If a HO policy is cancelled because of unpaid premiums, how much notice should be provided?

Answer 15

10 days

Question 16

An insured purchases a Difference in Conditions policy. It may contain all of the following characteristics EXCEPT
A) Flood and earthquake coverage 
B) Exclusion for named perils
C) Low deductible
D) No coinsurance clause

Answer 16

C) Low Deductible

Question 17

All of the following are other coverages included in both the broad and special form dwelling policy EXCEPT
A) theft of personal property
B) collapse
C)breakage of glass
D) lawns trees shrubs and plants

Answer 17

Theft of personal property

Theft of personal property only can be included by endorsement

Question 18

An insured has a personal property replacement cost endorsement under her homeowners policy. If an expensive painting and an antique chair are stolen from the insured’s home, what will the insured receive on the claim under that endorsement?

Answer 18

Nothing

The personal property replacement cost endorsement excludes property such as art or antiques.

Question 19

Which of the following is NOT one of the available additional coverages in the builders risk form?
A. Fire department service charge
B. Pollutant cleanup
C. Vandalism
D. Debris removal

Answer 19

C. Vandalism

The 4 additional coverages offered by the builders risk form are debris removal, fire department service charge, pollutant cleanup and removal, and preservation of property.

Question 20

A restaurant is out of business for 3 days after Sally's automobile hits an electrical pole. The pole falls and hits the buildings, knocking out all electrical power supply. Which of the following is NOT covered under Sally's driver's auto policy?
A. Lost revenue from the restaurant
B. Damage to Sally's auto
C. Damage to the restaurant
D. Spoilage of foods kept in storage

Answer 20

A. Lost revenue from the restaurant.

The business will need a business income policy to provide this coverage.

Question 21

Assuming the insurer and the insured agree to the amount payable for a kiss covered under a dwelling policy, how soon after the insurer has received prof of loss must it make payment?

Answer 21

60 days

Question 22

When an employee benefit plan pays the premium for a fiduciary liability policy, what provision must be included in that policy?

Answer 22

Subrogation

Question 23

An insured intentionally did not disclose a material fact on an application for insurance. This would be considered

Answer 23

Concealment

Question 24

The Individual Named Insured endorsement under a Commercial Auto Policy provides coverage for which of the following?

Answer 24

The sole proprietor of the business and his/her family members.

Question 25

Sally did not want to worry about coinsurance in her new insurance policy, but wanted the insurance to represent a fair valuation for her property. What provision did Sally most likely use to do this?

Answer 25

Agreed Value

Agreed value is a property policy with a provision agreed upon by the insurer and insured as to the amount of insurance that represents a fair valuation for the property at eh time the insurance is written and suspends any coinsurance or other contribution clauses in the policy.

Question 26

Under which of the following circumstances would an insurer be allowed to cancel a dwelling policy midterm?
A. The insured reach his or her limit on the number of claims
B. The insured knowingly lied about he year the property was constructed.
C. The insured’s claims have exceeded the amount of coverage
D. The insured wants to make suspicious increases to his or her coverage

Answer 26

B. The insured knowingly lied about he year the property was constructed.

The only way an insurer can cancel a policy midterm is if there has been a misrepresentation of a material fact or if the risk has changed substantially from when if was first insured.

Question 27

Which of the following is NOT a characteristic of an incurable risk?

Answer 27

The loss must be catastrophic.

In order to be a pure risk, a loss must be due to chance, definite, measurable and predictable. But not catastrophic.

Question 28

Which federal act provides benefits to injured civilians who are employed by the federal government?

Answer 28

Federal Employees Compensation Act

Question 29

An insured has $5,000 of medical coverage on a PAP at the time of a covered accident. The insured and 2 passengers are injured. Medical treatment costs $7,000 for the insured, $4000 for the 1st passenger, and $8000 for the 3rd passenger. How much will the policy pay under the medical payments coverage?

Answer 29

$14,000

Question 30

An owner and operator of a commercial business has included a Business Income Coverage form with his CPP. When the business is severely damaged by fire, the business income coverage will will pay for

A)Sales value production less the cost of raw stock
B)Annual sales less the cost of merchandise
C)Loss of total annual sales
D)Net Income plus continuing expenses of the business

Answer 30

D)Net Income plus continuing expenses of the business

In the even of a covered loss, BIC will pay those profits that would have been realized if there had been no loss and the expenses of the business that continue, even though the business is not operating.

Question 31

How much is the premium for the dwelling under construction endorsement under the dwelling policy?

Answer 31

The average amount of insurance during construction

Question 32

Rita drops off her wedding gown at Vicky’s Dry Cleaners for the final pressing. The store’s press breaks, so Vicky takes Rita’s dress to her other store across town. On the way to the other store, Vicky is held at gunpoint unti lshe gives the man the wedding dress. What crime coverage form would pay for the loss of the gown in this situation?

Answer 32

Extortion - commercial entities

Extortion - commercial entities provides payment, up to the limits of coverage, made in response to threats of bodily harm directed against the insured, its employees, directors or those persons’ relatives who are captured or allegedly captured. The extortion mus occur away from the premises.

Question 33

Which of the following is NOT true regarding the Oregon Workers Compensation Fun Insurance Plan
A. Failure to comply with the Plan may result in revocation of the insurer’s certificate of authority
B. It applies to the State Accident Insurance Fund Corporation and its agents
C. Participation in the Plan is voluntary
D. It was developed to create equitable apportionment among worker’s compensation insurers.

Answer 33

C. Participation in the Plan is voluntary

All insurers authorized to transact workers’ compensation insurance must participate in the Plan. Failure to comply with the Plan is grounds for revocation of the insurer’s certificate of authority to transact worker’s compensation insurance.

Question 34

All of the following statements regarding a boatowners policy are true EXCEPT
A. Replacements for the boat listed in the Declarations are automatically covered, if the insured notifies the insurer within 60 days and pays the additional premium
B. Watercraft liability protects up to specified limits for claims against a “covered person” for damages due to bodily injury caused by a watercraft.
C. Physical damage coverage is provided on an ACV basis
D. Perils are insured on a open-peril basis, providing that the insurer will pay for direct and accidental loss to the property insured

Answer 34

A. Replacements for the boat listed in the Declarations are automatically covered, if the insured notifies the insurer within 60 days and pays the additional premium

Automatic coverage is provided on replacements for the boat listed in the Declarations provided the insured notifies the insurer within 45 days and pays any additional premium required.

Question 35

Producer A is prosecuted for a crime. He must notify the Director within what time frame after the initial pretrial hearing date?

Answer 35

No later than 30 days

Question 36

Which of the following would NOT be covered as an additional coverage in Section II of a homeowners policy
A. The broken leg of a guest who fell through a rotten set of steps
B. The insured’s reasonable expenses in helping investigate a claim
C. The insured dropped and broke the neighbor’s borrowed punch bowl
D. Cost of ambulance service for a friend hurt on premises

Answer 36

A. The broken leg of a guest who fell through a rotten set of steps

The insured is legally liable because the rotten steps had not been replaced; therefore, Coverage E - personal liability - applies.