PENNSYLVANIA PROPERTY AND CASUALTY

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PENNSYLVANIA PROPERTY AND CASUALTY

LICENSING EXAM

EXAM WITH CORRECT SOLUTIONS.

Law of Large Numbers - correct answer- Recognizes that as the number of exposure units increases, the more likely it is to predict accurately the expected outcome.

What must an insurance producer do to apply for a nonresident license in Pennsylvania? - correct answer- Prove that their license is in good standing in their home state

Which best describes the responsibilities an agent owes when they sell a policy? - correct answer- To provide the agreed-upon insurance and to place coverage with a solvent insurer

Which of the following is not a prohibited marketing practice? - correct answer- Discrimination among risks

Which law, act, or regulation governs how insurers and their producers treat personal financial information from individuals?

• correct answer- Privacy of Consumer Financial Information

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Retention - correct answer- "do nothing" option; a person becomes personally responsible for the consequences of risk

Can an insurer change their assumed name? - correct answer- Yes, but they must notify the Commissioner before using the assumed name?

Contract of Adhesion - correct answer- "take-it-or-leave-it," drafted by one party; other party has no opportunity to negotiate terms and prices. Party must "adhere" to provisions as presented

Tad used unauthorized material to assist him on his examination for his insurance producer license. He justified this by saying the materials would be available to him in a real life situation. Which statement is true? - correct answer- Tad committed a prohibited act.

What is the maximum fine that may be imposed upon a producer for violating two of the Commissioner's orders? - correct answer- $20,000; A fine of up to $10,000 for each violation of an order issued by the commissioner.

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Admitted Insurer - correct answer- An insurance company authorized and licensed to transact business in a particular state.

Which of the following is not acting as an insurance producer? - correct answer- Brian, who is a VP at AllPro's human resources department and does not receive commissions

Edwin has decided not to retain the risk of home ownership himself. What method of risk does he choose when he

purchases homeowners insurance? - correct answer- Transfer:

the risk of loss is transferred from the insured to the insurance company in exchange for a premium payment

Alien Insurer - correct answer- Incorporated in a country other than the United States

What fine will the Commissioner impose for the practice of unfair methods of competition? - correct answer- Up to $5,000 for each violation (but not more than $50,000 in a 6 month period)

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Which of the following is not an unfair claims settlement practice if committed by an insurance company in Pennsylvania? - correct answer- Failing to promptly settle a claim for which liability is uncertain. (An insurer is not obligated to settle a claim for which it's not clearly liable)

Which of the following would NOT be considered misrepresentation of an insurance policy? - correct answer- Enthusiastically promoting an insurance product

Which of the following statements BEST describes the transfer of risk via an insurance contract? - correct answer- Not all risks are transferable via insurance contracts

Must the Commissioner conduct an examination of every foreign or alien insurer licensed in Pennsylvania? - correct answer- The Commissioner may choose to waive examinations under certain circumstances

Aleatory Contract - correct answer- One party may receive a benefit that is out of proportion to the consideration he or she paid for.

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