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New York State Property and Casualty
Licensing Exam Questions and Answers
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Pro Rata Liability Clause is included in an insurance policy to deal with the problem of ✔✔Duplicate insurance policies The purpose of this clause is to illustrate the method to determine each insurer's liability in case of a loss. Each insurer pays its fair share determined by the percentage that the carrier's limit bears to the total coverage carried.
pro rata liability ✔✔If a loss occurs that is covered by more than 1 insurance policy that was purchased by the insured, then each policy pays a portion of the loss that is proportional to the amount of that policy over the total amount of all policies for the loss—each policy pays its pro rata share.
What is meant by Res Ipsa Loquitur? ✔✔Res ipsa loquitur means, roughly, "the thing speaks for itself." Courts developed the concept of Res Ipsa Loquitur to deal with cases in which the actual negligent act cannot be proved, but it is clear that the injury was caused by negligence.
What territories are covered by commercial auto insurance? ✔✔The coverage territory granted in commercial auto insurance is the United States, its territories and possessions, Puerto Rico and Canada.
What does automobile insurance Supplementary Payments refer to? ✔✔Payment of defense and other expenses by the insurance company beyond the limits of liability.. Any expense the insurance company wishes to incur in the processing of a claim is outside the limits of coverage. The insured is not penalized.
Medical Payments coverage under a Homeowner policy are available for expenses resulting from an injury to: ✔✔A residence employee.. This could be someone who mows the lawn. However, if a residence employee is covered under Workers Compensation Coverage then the Medical Payments Coverage would not apply. Coverage does not apply to the insured or member of the household. Roomers, boarders and tenants are not covered as well
what does Homeowners - Coverage C exclude? ✔✔The Homeowners forms exclude certain types of property. Pets are not covered for loss by an insured peril. The policy also excludes coverage for property that is more specifically insured. Property of tenants is also excluded.
George Wilson has a personal auto policy. What coverage that would apply when a deer leaps onto Mr. Wilson's car and causes extensive damage? ✔✔Comprehensive (other than collision). Contact with a bird or animal is considered to be an "other than collision" loss.
insurance producer ✔✔an insurance agent, insurance broker, reinsurance intermediary, excess lines broker, or any other person required to be licensed under the laws of this state to sell, solicit, or negotiate insurance
what is the purpose of licensing? ✔✔ensure that the producer meets educational and ethical standards required to fulfill producer's responsibilities to the insurer and the public
set out the requirements, procedures, and fees relating to the qualification, licensure, and appointment of insurance producers ✔✔licensing regulations
an insurance agent, insurance broker, reinsurance intermediary, excess lines broker, or any other person required to be licensed under the laws of this state to sell, solicit or negotiate insurance ✔✔insurance producer
any state, district, or territory of the united states in which an insurance producer maintains his/ her principal place of residence or principal place of business, and is licensed to act as an insurance producer ✔✔home state
the act of directly conferring with or offering advice to a purchaser or prospective purchaser of a particular insurance contract concerning any of the substantive benefits, terms or conditions of the contract, provided that the person engaged in the act either sells insurance or obtains insurance from licensed insurers, fraternal benefit societies or health maintenance organizations ✔✔negotiation
exchange a contract of insurance by any means, for money or its equivalent, on behalf of a licensed insurer, fraternal benefit society or health maintenance organization ✔✔sell
attempting to sell insurance or asking or urging a person to apply for a particular kind of insurance from a particular licensed insurer, fraternal benefit society or health maintenance organization ✔✔solicit
in order to qualify for an insurance license: ✔✔1. submit an application to the superintendent and declare that all statements are true, accurate and complete to the best of the applicants knowledge and belief
- resident of NY
- at least 18
- fulfill the pre- licensing education requirement of classroom work or equivalent in correspondence work or similar instruction (90 hours for Property/ Casualty agent or broker)
- pay the applicable fees
- pass the applicable examination for each line of authority
licensing examination exemptions (don't have to take the written examination) ✔✔1. ticket selling agent or representative (airline, bus, train, or sea) for one-time issuance of baggage or accident insurance
- any individual who's license has been revoked or suspended (at the discretion of the superintendent)
- an individual seeking to be a rep of a fraternal benefit society as its agent
- in connection with any certificate of appointment for an additional insurer, as long as it is under the same line of authority already licensed
a person authorized by an insurer, fraternal benefit society or health maintenance organization (HMO) to solicit, negotiate and obtain insurance, HMO or annuity contracts. REPRESENTS THE INSURER NOT THE INSURED ✔✔agent
any person, firm, association or corporation who solicits, negotiates, or obtains insurance for an insured (other than herself) in exchange for a commission. represents the insured no the insurer ✔✔broker
offer advice to the public about the benefits, advantages and disadvantages of insurance policies for a fee. ✔✔consultant
any person, firm, association or corporation, who, for commission, acts on behalf of an insurer in the work of investigating and adjusting claims ✔✔independent adjuster
any person, firm, association or corporation, who for commission, acts on behalf of the insured in negotiating a settlement of a claim for loss or damage to property ✔✔public adjuster
an individual who is a resident of another state, who is licensed or authorized to act as an agent or broker in the state of NY ✔✔non resident
a corporation, association, partnership, limited liability company, limited liability partnership, or other legal entity ✔✔business entity
who can get a temporary license ✔✔only be used to service existing business, not to solicit, negotiate, or procure new business. only can be used for a total of 90 days unless the superintendent allows it to be extended and therefore can only be extended until 15 months
when must an agent renew? ✔✔must file an application for renewal to the superintendent at least 60 days before the license expires. if it is late the applicant will have a $10 filing fee
continuing education rules ✔✔any residnent or non resident agent must complete 15 hours of instruction by an approved provider of continuing education every two years. this continuing education requirement applies to agents licensed all lines of property and casualty insurance
change of address ✔✔within 30 days
reporting of actions ✔✔either taken against them or another jurisdiction or another state must be reported within 30 days
has assets to meet its financial obligations ✔✔solvent
appointed by the governor and continues in office until the end of the governors term has very broad powers, both expressed and implied with the business of insurance,that extend to all financial service providers
establishes procedures that consumer-reporting agencies must follow in order to ensure that records are confidential, accurate, relevant, and properly used ✔✔Fair Credit Reporting Act
provides information on the consumer's character, reputation, and habits but the information is obtained through an investigation and interviews with associates, friends, and neighbors of the consumer ✔✔investigative consumer report
prohibited information on consumer reports ✔✔bankruptcies more than 10 years old, civil suits, records of arrest or convictions of crimes, or any other negative information that is more than 7 years old
the intentional misrepresentation or intentional concealment of a material fact used to induce another party to make or refrain from making a contract, or to deceive or cheat a party ✔✔fraud
federal law makes it illegal for any individual convicted of a crime involving dishonesty, breach of trust or violation of violent crime control and Law Enforcement Act of 1994 to work in the business of insurance affecting commerce unless what? ✔✔there is a written consent from an insurance regulatory official (1033 waiver)
no person, firm, association, corporation or joint stock company may conduct insurance business unless authorized by who? ✔✔certificate of authority
every license must contain ✔✔the name of the licensee home office address the state or country under whose laws it was organized the kinds of insurance business it will provide and term of license
transfers the risk of loss from an individual or business entity to an insurance company, which in turn spreads the costs of unexpected losses to many individuals ✔✔insurance
the uncertainty or chance of a loss occuring ✔✔risk
the money paid to the insurance company ✔✔premium
situations that can only result in a loss or no change ✔✔pure risk
involves the opportunity for either loss or gain (gambling) ✔✔speculative risk
conditions or situations that increase the probability of an insured loss occuring ✔✔hazards
the causes of loss insured against in an insurance policy ✔✔peril
the reduction, decrease, or disappearance of a value of the person or property insured in a policy, caused by a named peril ✔✔loss
