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Insurance > Property & Casualty AZ state laws > Flashcards

Property & Casualty AZ state laws Flashcards

1
Q

If an individual wants to transact business as an insurance producer, he/she must meet all of the following requirements, EXCEPT:

a. be at least 18 years old
b. apply for a license within 2 years of passing the licensing exam
c. pay all required fees
d. not commit any act that is grounds for denial

A

b. apply for a license within 2 years of passing the licensing exam

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2
Q

In order for a business entity to obtain a producer license, it must comply with which of the following requirements?

a. provide the name and address of the company’s clients
b. only disclose the names of the company’s CEO
c. ensure that all employees acting as producers are licensed as producers
d. designate a licensed compliance officer

A

c. ensure that all employees acting as producers are licensed as producers

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3
Q

Before granting a license, the Director may require which of the following?

a. fingerprints
b. proof of a college degree
c. verification of medical history
d. copy of tax returns

A

a. fingerprints

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4
Q

Within what time frame must a nonresident producer apply for a resident producer license upon moving to Arizona

a. 90 days
b. 60 days
c. 30 days
d. 10 days

A

a. 90 days

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5
Q

A resident licensee:

a. must hold a resident license in another state
b. is issued a license without examination
c. must have a residence or principal place of business in this state
d. cannot hold a nonresident license at the same time

A

c. must have a residence or principal place of business in this state

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6
Q

All of the following statements about obtaining a nonresident license are correct, except:

a. it is issued to a person whose home state is not Arizona
b. an examination is not required as long as the resident state is reciprocal
c. the applicant’s resident license must be valid and in good standing
d. the application fees are waived for nonresident licenses

A

d. the application fees are waived for nonresident licenses

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7
Q

A temporary license may be issued to a designated individual for all of the following reasons, except:

a. a resident license applicant is unable to pass the license exam
b. the disability of an individual licensed on behalf of a business entity
c. an insurance producer enters active service in the armed forces
d. the death of a licensed producer for the purpose of selling the business

A

a. a resident license applicant is unable to pass the license exam

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8
Q

Agents represent the ______ when transacting insurance.

A

insurer

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9
Q

Brokers represent the ______

A

insured

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10
Q

Any person who, for compensation, adjusts, investigates, or negotiates the settlement of claims on behalf of either insurer or the insured.

A

Adjuster

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11
Q

A producer that is licensed with a life line of authority

A

Life settlement broker

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12
Q

An insurance written by unauthorized insurers when coverage may not be written by authorized insurers.

A

Surplus lines brokers

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13
Q

Any person, firm, association or corporation that manages all or part of the insurance business of an insurer, including the management of a separate division, department or underwriting office

A

MGA

Managing General Agent

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14
Q

Which of the following statements regarding using an assumed business name is NOT correct

a. a producer may use an assumed name at any time
b. an assumed business name may not be misleading or deceptive
c. a trade name must be lawfully registered
d. the Director may deny the use of an assumed name

A

a.
in order to use an assumed name, the producer must notify the Director before it can be used because the Director may deny the use of the assumed name.

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15
Q

The Director may take any of the following disciplinary actions, EXCEPT:

a. suspend a license if the producer provided incorrect or incomplete information on a license application
b. order payment of fines of up to $2,500 if the licensee committed an intentional violation of insurance law
c. suspend a license for up to 2 years if the producer is convicted of a misdemeanor
d. suspend or revoke a license if the licensee forged a clients signature on an application

A

c.

The Director may only suspend a license for up to 12 months and may revoke a license for a felony conviction

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16
Q

When may an insurance company discriminate based on blindness

a. at the time of application or insurance
b. when cancelling insurance
c. when charging premium rates
d. never

A

d.

an insurer may not discriminate solely based on blindness or partial blindness

17
Q

A producer may share commissions with another producer:

a. as long as there is a contract between the producers
b. only if they are both licensed in the same line of insurance
c. only if they represent the same insurer
d. after permission is granted by the insured

A

b.
a producer may only share commissions with another producer if they are licensed in the same line. A contract is not required, they do not have to represent the same insurer and the insured does not grant permission.

18
Q

Which of the following is NOT a prohibited insurance practice?

a. giving a client a $5 gift card as a thank you for buying an insurance policy
b. denying insurance because a person is blind
c. charging a higher premium because of an applicant’s marital status
d. offering a client season’s tickets to the Dallas Cowboys in exchange for buying insurance

A

a.

providing merchandise or prizes valued in excess of $25 is prohibited

19
Q

Which of the following acts constitutes an unfair claims settlement practice?

a regularly denying claims when the insured is not liable

b. frequently denying claims based on facts and law
c. often settling claims for amounts higher than the claimant expects
d. routinely settling claims without conducting an investigation

A

d.
failing to adopt and use reasonable standards for the prompt investigation of claims is an unfair claims settlement practice when it is a regular business practice

20
Q

An insurer or producer may charge fees for services not customarily provided if they file the fee with the Director and meet the following conditions, except:

a. the services are in addition to those normally performed for insureds
b. the specific services and their related charges are disclosed in writing to the insured
c. the service charges are reasonable with respect to the cost of the service performed
d. the services required the producer to spend more time than usual explaining coverages

A

d.

this is service customarily provided

21
Q

Which statement about insurance information and privacy protection is TRUE?

a. personal information may be given to a third party at any time
b. personal information may be disclosed over the telephone at any time
c. an insurer may not investigate criminal or fraudulent activity
d. an insurer must provide written privacy protection disclosures

A

d.

insurers must provide all disclosures about privacy protections in writing

22
Q

Telephone solicitation calls under the Telemarketing Sales Rules can be made:

a. between the hours of 8am and 5pm in the time zone of the solicitor
b. before 8am and after 9pm in the time zone of the customer
c. between 8am and 9pm in the time zone of the customer
d. between 8am and 9pm in the time zone of the solicitor

A

c.

the Telemarketing Sales Rules limit the solicitation hours to between 8am and 9pm in the time zone of the customer

23
Q

Which of the following acts is a violation of the CAN-SPAM Act?

a. sending a commercial email to 100 insurance prospects with a phony email address and sender name
b. sending a personal email to 100 people using a phony email address
c. using one’s own personal computer to send multiple emails that contain false information
d. using one’s work computer to send a nasty email to a commercial client

A

a.
using materially false header information in multiple commercial electronic mail messages and intentionally initiating the transmission of such messages is a violation of the CAN-SPAM Act

24
Q

Which of the following violates the Gramm-Leach-Bliley Act?

a. allowing customers to opt-out of the sharing of their nonpublic personal information
b. refusing to disclose a customer’s nonpublic personal information to non-affiliated third parties
c. disclosing a customer’s nonpublic personal information without consent
d. providing an annual disclosure notice

A

c.
unless permitted to do so by law, financial institutions may not share nonpublic personal information without a customer’s consent

25
Q

Which of the following is true about insurable interest?

a. it is a substantial economic interest in property free from loss
b. it is required in order to insure property
c. a person can have a substantial but non-economic interest in the property
d. the insurance contract is not enforceable without a valid insurable interest

A

c.
insurable interest means any actual, lawful, and substantial economic interest in the safety or preservation of the subject of the insurance free from loss, destruction or financial damage or impairment

26
Q

The funding for the Arizona Property and Casualty Insurance Guaranty Association comes from which of the following

a. assessment of policyholders
b. state legislature
c. director of insurance
d. assessment of members

A

d.
the funding for the Arizona Property and Casualty Insurance Guaranty Association comes from the assessment of member companies

27
Q

A personal property policy that has been in effect for _____ days or more can be cancelled for nonpayment of premium

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

A

b.
a personal property policy that has been in effect for 60 days or more can be cancelled for nonpayment of premium, and the insurer must give the insured 10 days’ notice

28
Q

For auto insurance, a ___-day written notice of cancellation or nonrenewal must be provided to the insured

a. 7
b. 10
c. 14
d. 30

A

b.

a 10-day written notice of cancellation or nonrenewal to the insured must be provided

29
Q

A binder cannot be effective beyond the policy issue date or _____ days, whichever is shorter.

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

A

c.
binders can be made orally or in writing and cannot be effective beyond policy issue or 90 days, whichever is shorter
???
AD banker webinar says 60

30
Q

Which of the following is true about the Dwelling Policy Special Provisions - Arizona endorsement?

a. the insurer has 60 days to pay a covered property loss
b. the insurer can subrogate against the person who caused domestic violence
c. fire department service charges are covered
d. intentional loss to property applies to a loss caused by domestic violence

A

b.
an insured receiving payment for a loss caused by domestic violence cannot waive the insurer’s right to subrogation against the perpetrator of the violence

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