Arkansas State Law Insurance Licensing – Chapter 15:
Exam Q&A (with Verified Answers) 2023
The Commissioner of insurance has all of the following duties and powers,
except:
a. The insurance Commissioner may update the insurance code (law) as
needed
b. The Commissioner regulates premium rates
c. The Commissioner may institute court proceedings to enforce the
Insurance Code
d. The Commissioner has the authority to make necessary rules and
regulations – correct answer ✅a. The insurance Commissioner may update
the insurance code (law) as needed
After a hearing before the Commissioner, Oscar’s insurance license was
suspended because:
a. He failed to respond to a written inquiry from the Commissioner within 30
days
b. His state income tax return was audited
c. He was subpoenaed to appear before the insurance commissioner of
another state
d. He was a accused of committing a misdemeanor – correct answer ✅a. He
failed to respond to a written inquiry from the Commissioner within 30 days
Arkansas State Law Insurance Licensing – Chapter 15:
Exam Q&A (with Verified Answers) 2023
According to Arkansas law, a resident insurance agent in the state of
Arkansas:
a. Must maintain client records for at least 1 year
b. Must be at least 20 years old
c. Must have a place of business in Arkansas
d. Must notify the Commissioner of a change of address within 30 days –
correct answer ✅c. Must have a place of business in Arkansas
The sale of surplus lines insurance is:
a. Done through surplus lines brokers working with eligible nonadmitted
insurers
b. Another name for insurance sold through unauthorized insurers
Arkansas State Law Insurance Licensing – Chapter 15:
Exam Q&A (with Verified Answers) 2023
c. Allowed when insurance is cheaper through a non-admitted carrier
d. Done through any agent with a property and casualty license – correct
answer ✅b. Another name for insurance sold through unauthorized insurers
What is the maximum financial penalty the Commissioner may impose upon
a licensee who knowingly engages in unfair trade practice violations within a
6-month period?
a. $5,000
b. $10,000
c. $1,000
d. $50,000 – correct answer ✅d. $50,000
ARKANSAS HEALTH INSURANCE EXAM Questions and
Answers (2023) (Verified Answers)
For a contract to be valid, it must: – correct answer ✅Contain an offer &
acceptance.
When does a nondisabled person first qualify for a Medicare Supplement
Policy? – correct answer ✅Age 65.
A life insurance company has transferred some of its risk to another insurer.
The insurer assuming the risk is called the: – correct answer ✅Reinsurer.
A common exclusion with vision plans is: – correct answer ✅Lasik Surgery
What are applicants’ statements concerning occupation, hobbies and
personal health history? – correct answer ✅Representation.
States that have “no loss, no gain” laws require a replacing policy to: –
correct answer ✅Pay for ongoing claims under the policy it replaces.
A rehabilitation benefit is intended to: – correct answer ✅Prepare the
insured to return to employment.
ARKANSAS HEALTH INSURANCE EXAM Questions and
Answers (2023) (Verified Answers)
Which of the following does coordination of benefits allows? – correct
answer ✅The secondary payor to reduce their benefit payments so no more
than 100% of the claim is paid.
An insurer may pay a commission in which of the following scenarios: –
correct answer ✅To a licensed producer who is appointed with the insurer.
In which of the following situations would the insurer be liable for a loss? –
correct answer ✅The insured suffered an injury during a bank robbery.
The Fair Credit and Reporting Act’s main purpose is to: – correct answer
✅Protect consumers with guidelines regarding credit reporting and
distribution.
J is a producer who has induced an insured through misrepresentation to
surrender an existing insurance policy. What is J guilty of? – correct answer
✅Twisting.
ARKANSAS HEALTH INSURANCE EXAM Questions and
Answers (2023) (Verified Answers)
What is implied authority defined as? – correct answer ✅Authority that is
not specifically given to an agent contract, but that an agent can reasonably
assume to carry out his/her duties.
A person who is a nonsmoker, average weight, excellent health would fall
into what risk classification: – correct answer ✅Preferred.
Which of the following is the period when the accumulated value in an
annuity is paid out? – correct answer ✅Annuitization phase.
Insurers claim settlement practices are regulated by the: – correct answer
✅State insurance departments.
The two major actions required for a policyholder to comply with the
Reinstatement Clause are: – correct answer ✅provide evidence of
insurability, pay past due premiums.
An insurer’s ability to make unpredictable payouts to policy owners is called:
- correct answer ✅Liquidity.
ARKANSAS HEALTH INSURANCE EXAM Questions and
Answers (2023) (Verified Answers)
Which of the following pertains to the analysis of an applicant’s personal
information and determining whether insurance should be issued or
declined? – correct answer ✅Underwriting
What does the Group Life underwriting risk selection process help protect
insurance companies from? – correct answer ✅Adverse Selection.
The Arkansas Life & Disability Insurance Guaranty Association assures
payment of benefits from insurance policies for insolvent insurers, and
covers all of the following insured policies, EXCEPT: – correct answer
✅Liability Insurance
Pat owns a 20-pay life policy with a paid-up dividend option. Which is true? –
correct answer ✅The policy may be paid up early by using policy dividends?
What would happen if a life insurance applicant is given a conditional receipt
from an insurance agent and then dies the next day? – correct answer
✅Claim will be paid if application is approved
Arkansas Property and Casualty License Exam Questions
Latest 2023 (Verified Answers)
What is Insurance? – correct answer ✅Transfers the risk of loss from
individual to insurance co.
What is Risk? – correct answer ✅Chance of loss occurring.
What are 3 types of Hazards? – correct answer ✅Physical, Moral, Morale
What is Peril? – correct answer ✅Causes of loss insured against.
What does Indemnify mean? – correct answer ✅Right for Reimbursement
but only to the extent of the loss. Cannot gain from loss.
Define Subrogation – correct answer ✅Right to seek damages from 3rd party
so that the insured cannot collect 2xs.
What is an accident? – correct answer ✅Sudden unplanned event resulting
in a loss.
Arkansas Property and Casualty License Exam Questions
Latest 2023 (Verified Answers)
What is an occurrence? – correct answer ✅Repeated action or event that
results in a loss.
What is a direct loss? – correct answer ✅Things physically loss. For ex. If a
fire burned down a house that would be a direct loss of the fire.
What is an indirect loss? – correct answer ✅A loss resulting from the direct
loss. For Ex. If a fire burned down a house and you had to rent a hotel room
the added expense of the hotel would be an indirect loss of the fire.
What is a vacancy? – correct answer ✅When someone has been absent and
no property is stored on the premises for 60 days consecutively.
What is unoccupied? – correct answer ✅When someone has been absent
from the premises for more than 60 consecutive days but still has property
stored there.
What type of insurance provides coverage for multiple classes of property at
one location? – correct answer ✅Blanket Insurance.
Arkansas Property and Casualty License Exam Questions
Latest 2023 (Verified Answers)
Explain the actual cash value method of valuation – correct answer
✅Current replacement cost-depreciation = ACV
When absolute liability is involved, does the injured party have to prove
negligence? – correct answer ✅No
If a product is unsafe, what kind of liability applies to the manufacturer. –
correct answer ✅Strict liability
What is the proximate cause? – correct answer ✅A reasonable cause or
reason why a loss occurred.
What type of policies may include insurance to value provision? – correct
answer ✅Coinsurance.
What is a certificate of insurance? – correct answer ✅Written evidence a
policy has been written and is in effect.
Arkansas Property and Casualty License Exam Questions
Latest 2023 (Verified Answers)
What information is included in a policy’s declarations? – correct answer
✅(who, What, Where, when, how much, why) Name, Address, Location
described, Amt of coverage and premiums and any supplemental
representations.
What are the four elements of an insurance contract? – correct answer ✅1.
Agreement (offer and acceptance)
- Consideration (the exchange of money for coverage)
- competent parties
- Legal purpose
What does Representation mean? – correct answer ✅Something that is
believed to be true to the best of one’s knowledge but is not guaranteed to
be true. Will not void the policy.
What does a Warranty mean? – correct answer ✅Something that is an
absolute truth. If found out to be false it could void the policy.