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North Carolina Surplus Lines Insurance Exam with Verified Solutions, Exams of Insurance law

North Carolina Central University (NCCU)Insurance law

A comprehensive overview of north carolina surplus lines insurance, covering key concepts, definitions, and regulations. It includes a series of questions and answers related to the topic, offering insights into the workings of this specialized insurance market. Particularly useful for individuals seeking to understand the role of surplus lines insurance in north carolina and the requirements for obtaining a surplus lines license.

Typology: Exams

2024/2025

Available from 02/11/2025

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North Carolina Surplus Lines Insurance
Exam with verified solutions
2020 |!|Annual |!|Premium |!|Placed |!|in |!|NC |!|- |!|correct |!|answer |!|✔$18B
2020 |!|Annual |!|SL |!|Premium |!|Placed |!|in |!|NC |!|- |!|correct |!|answer |!|✔$1B
NC |!|SL |!|Taxes |!|Increase |!|from |!|2016 |!|to |!|2020 |!|- |!|correct |!|answer |!|✔$30M |!|to |!|$49M
Role |!|of |!|NC |!|DOI |!|- |!|correct |!|answer |!|✔Monitoring |!|performance |!|and |!|assuring |!|that |!|rules |!|and |!|
guidelines |!|are |!|followed |!|by |!|all |!|insurance |!|entities
Standard |!|/ |!|Admitted |!|Insurers |!|- |!|correct |!|answer |!|✔Licensed |!|and |!|issued |!|a |!|certificate |!|of |!|
authority |!|by |!|the |!|state |!|to |!|write |!|business |!|in |!|North |!|Carolina. |!|Participate |!|in |!|the |!|Guaranty |!|Fund.
|!|Writes |!|over |!|90% |!|of |!|insurance |!|in |!|the |!|state.
Non-Admitted |!|/ |!|Surplus |!|Lines |!|Insurers |!|- |!|correct |!|answer |!|✔NOT |!|licensed |!|by |!|the |!|state |!|but |!|
able |!|to |!|operate |!|under |!|certain |!|circumstances.
Characteristics |!|of |!|Surplus |!|Lines |!|Accounts |!|- |!|correct |!|answer |!|✔Unique, |!|Distressed, |!|High |!|Limits, |!|
Tailored |!|Coverage |!|Forms
Licensed |!|Intermediary |!|- |!|correct |!|answer |!|✔Surplus |!|Lines |!|Broker, |!|Managing |!|General |!|Agent, |!|
General |!|Agent, |!|Wholesaler, |!|Managing |!|General |!|Underwriter |!|- |!|someone |!|who |!|has |!|either |!|a |!|
resident |!|or |!|non-resident |!|license |!|in |!|NC
Statute |!|58-21-5: |!|Purpose |!|of |!|SL |!|- |!|correct |!|answer |!|✔Provide |!|access |!|to |!|financially |!|secure |!|SL |!|
insurers |!|with |!|overall |!|goal |!|to |!|protect |!|policyholders |!|and |!|members |!|of |!|the |!|public
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North Carolina Surplus Lines Insurance

Exam with verified solutions

2020 |!|Annual |!|Premium |!|Placed |!|in |!|NC |!|- |!|correct |!|answer |!| ✔ $18B 2020 |!|Annual |!|SL |!|Premium |!|Placed |!|in |!|NC |!|- |!|correct |!|answer |!| ✔ $1B NC |!|SL |!|Taxes |!|Increase |!|from |!| 2016 |!|to |!| 2020 |!|- |!|correct |!|answer |!| ✔ $30M |!|to |!|$49M Role |!|of |!|NC |!|DOI |!|- |!|correct |!|answer |!| ✔ Monitoring |!|performance |!|and |!|assuring |!|that |!|rules |!|and |!| guidelines |!|are |!|followed |!|by |!|all |!|insurance |!|entities Standard |!|/ |!|Admitted |!|Insurers |!|- |!|correct |!|answer |!| ✔ Licensed |!|and |!|issued |!|a |!|certificate |!|of |!| authority |!|by |!|the |!|state |!|to |!|write |!|business |!|in |!|North |!|Carolina. |!|Participate |!|in |!|the |!|Guaranty |!|Fund. |!|Writes |!|over |!|90% |!|of |!|insurance |!|in |!|the |!|state. Non-Admitted |!|/ |!|Surplus |!|Lines |!|Insurers |!|- |!|correct |!|answer |!| ✔ NOT |!|licensed |!|by |!|the |!|state |!|but |!| able |!|to |!|operate |!|under |!|certain |!|circumstances. Characteristics |!|of |!|Surplus |!|Lines |!|Accounts |!|- |!|correct |!|answer |!| ✔ Unique, |!|Distressed, |!|High |!|Limits, |!| Tailored |!|Coverage |!|Forms Licensed |!|Intermediary |!|- |!|correct |!|answer |!| ✔ Surplus |!|Lines |!|Broker, |!|Managing |!|General |!|Agent, |!| General |!|Agent, |!|Wholesaler, |!|Managing |!|General |!|Underwriter |!|- |!|someone |!|who |!|has |!|either |!|a |!| resident |!|or |!|non-resident |!|license |!|in |!|NC Statute |!|58-21-5: |!|Purpose |!|of |!|SL |!|- |!|correct |!|answer |!| ✔ Provide |!|access |!|to |!|financially |!|secure |!|SL |!| insurers |!|with |!|overall |!|goal |!|to |!|protect |!|policyholders |!|and |!|members |!|of |!|the |!|public

Domestic |!|Insurer |!|- |!|correct |!|answer |!| ✔ Domiciled |!|in |!|North |!|Carolina Foreign |!|Insurer |!|- |!|correct |!|answer |!| ✔ Domiciled |!|in |!|another |!|US |!|State Alien |!|Insurer |!|- |!|correct |!|answer |!| ✔ Domiciled |!|in |!|another |!|country |!|(i.e., |!|Lloyd's |!|Syndicates) Eligible |!|Surplus |!|Lines |!|Insurer |!|- |!|correct |!|answer |!| ✔ Alien, |!|domestic, |!|or |!|foreign |!|non-admitted |!| insurer |!|that |!|a |!|SL |!|licensee |!|can |!|place |!|business |!|with Export |!|- |!|correct |!|answer |!| ✔ Process |!|of |!|placing |!|an |!|account |!|with |!|a |!|non-admitted |!|carrier. |!|SL |!| Licensee |!|is |!|"exporting" |!|business |!|to |!|a |!|SL |!|insurer Salary |!|Protection |!|- |!|correct |!|answer |!| ✔ Type |!|of |!|coverage |!|that |!|covers |!|losses |!|from |!|cessation |!|of |!| earned |!|income |!|because |!|of |!|disability |!|from |!|sickness, |!|ailment, |!|or |!|body |!|injury. |!|Limits |!|the |!| amount |!|a |!|person |!|can |!|recover |!|from |!|all |!|services |!|(ie |!|Individual |!|Disability |!|Income) |!|to |!|75% |!|of |!| annual |!|salary Surplus |!|Lines |!|Insurance |!|- |!|correct |!|answer |!| ✔ Insurance |!|in |!|the |!|state |!|of |!|NC |!|permitted |!|to |!|be |!| placed |!|by |!|a |!|SL |!|licensee |!|with |!|an |!|eligible |!|non-admitted |!|insurer. |!|Does |!|NOT |!|include: |!| reinsurance, |!|commercial |!|aircraft, |!|wet |!|marine, |!|insurance |!|independently |!|procured, |!|life |!|/ |!| accident |!|/ |!|health, |!|annuities Home |!|State |!|- |!|correct |!|answer |!| ✔ State |!|that |!|receives |!|the |!|SL |!|taxes. |!|Means |!|either:

  1. |!|state |!|in |!|which |!|insured |!|maintains |!|place |!|of |!|business |!|/ |!|residence
  2. |!|if |!|100% |!|of |!|the |!|risk |!|is |!|located |!|out |!|of |!|state |!|where |!|business |!|is, |!|then |!|the |!|state |!|to |!|which |!| the |!|greatest |!|% |!|of |!|the |!|insured's |!|taxable |!|premium |!|is |!|allowed Requirements |!|for |!|SL |!|Placement |!|- |!|correct |!|answer |!| ✔ 1. |!|Producer |!|is |!|SL |!|Licensee
  3. |!|Insurer |!|is |!|an |!|eligible |!|SL |!|insurer
  4. |!|Insurer |!|is |!|authorized |!|to |!|write |!|type |!|of |!|business
  5. |!|Full |!|amount |!|/ |!|kind |!|of |!|insurance |!|cannot |!|be |!|secured |!|by |!|others |!|in |!|the |!|state |!|
  6. |!|Diligent |!|Search |!|Conducted

Reasons |!|Commissioner |!|may |!|withdrawal |!|eligibility |!|from |!|SL |!|Insurer |!|- |!|correct |!|answer |!| ✔ 1. |!| unsound |!|financial |!|condition

  1. |!|acted |!|in |!|an |!|untrustworthy |!|manner
  2. |!|failed |!|to |!|pay |!|losses |!|/ |!|manage |!|claims
  3. |!|violated |!|state |!|laws
  4. |!|or |!|no |!|longer |!|qualifies Duty |!|to |!|File |!|and |!|Retain |!|Reports |!|- |!|correct |!|answer |!| ✔ Licensee |!|shall |!|file |!|a |!|report |!|with |!|the |!| Commissioner |!|or |!|the |!|stamping |!|office |!|within |!| 30 |!|days What |!|font |!|should |!|the |!|SL |!|notice |!|on |!|the |!|policy |!|be? |!|- |!|correct |!|answer |!| ✔ 12 |!|point |!|type Bold |!|and |!|underlined |!|or |!|in |!|contrasting |!|colors Requirements |!|for |!|SL |!|License |!|- |!|correct |!|answer |!| ✔ 1. |!|Must |!|have |!|P&C |!|license
  5. |!|Pay |!|required |!|fees
  6. |!|Complete |!|& |!|submit |!|application
  7. |!|Pass |!|SL |!|exam SL |!|License |!|Fees |!|- |!|correct |!|answer |!| ✔ Initial |!|Cost |!|- |!| $50 |!| $44 |!|processing |!|/ |!|$34 |!|(renewal) $5 |!|- |!|NIPR License |!|Term |!|/ |!|Renewal |!|- |!|correct |!|answer |!| ✔ Licenses |!|are |!|good |!|for |!| 1 |!|year |!|and |!|must |!|be |!| renewed |!| 30 |!|days |!|in |!|advance. |!|If |!|license |!|lapses |!|and |!|is |!|not |!|reinstated |!|within |!| 2 |!|years, |!|then |!| agent |!|/ |!|broker |!|must |!|retake |!|test |!|/ |!|resubmit |!|application SL |!|Fees |!|for |!|Business |!|- |!|correct |!|answer |!| ✔ $144 |!|new |!|/ |!|$134 |!|renewal Penalty |!|for |!|no |!|SL |!|License |!|- |!|correct |!|answer |!| ✔ $1,000 |!|/ |!|other |!|penalties |!|by |!|law

How |!|long |!|must |!|SL |!|licensee |!|keep |!|records? |!|- |!|correct |!|answer |!| ✔ 5 |!|years |!|following |!|termination Records |!|to |!|be |!|kept |!|by |!|SL |!|licensee |!|- |!|correct |!|answer |!| ✔ 1. |!|policy, |!|certificates, |!|cover |!|notes

  1. |!|amount |!|of |!|insurance |!|/ |!|perils
  2. |!|gross |!|premium
  3. |!|any |!|return |!|premium
  4. |!|rate |!|of |!|premium |!|for |!|property
  5. |!|effective |!|date |!|/ |!|terms |!|
  6. |!|name |!|/ |!|address |!|of |!|insured
  7. |!|name |!|/ |!|address |!|of |!|insurer
  8. |!|taxes |!|/ |!|other |!|sums |!|collected
  9. |!|producing |!|broker |!|/ |!|the |!|application
  10. |!|copy |!|of |!|compliance |!|agreement NC |!|SL |!|Taxes |!|& |!|Fees |!|- |!|correct |!|answer |!| ✔ Tax |!|rate |!|for |!|SL |!|premiums |!|is |!|5% |!|+ |!|.4% |!|stamping |!|fee |!|from |!|NCSLA Are |!|brokers |!|fees |!|subject |!|to |!|SL |!|taxes? |!|- |!|correct |!|answer |!| ✔ No Are |!|insurance |!|company |!|imposed |!|fees |!|(inspection |!|fees) |!|subject |!|to |!|the |!|SL |!|taxes? |!|- |!|correct |!| answer |!| ✔ Yes When |!|are |!|SL |!|taxes |!|due? |!|- |!|correct |!|answer |!| ✔ Within |!| 30 |!|days |!|of |!|the |!|invoice |!|date |!|of |!|each |!| quarter |!|(1/1, |!|4/1, |!|7/1, |!|10/1) How |!|are |!|taxes |!|/ |!|fees |!|paid? |!|- |!|correct |!|answer |!| ✔ Via |!|ACH Reasons |!|insurance |!|commissioner |!|might |!|revoke |!|a |!|license: |!|- |!|correct |!|answer |!| ✔ 1. |!|Removal |!|of |!| documents