NJ NEW JERSEY PROPERTY & CASUALTY INSURANCE EXAM QUESTIONS AND ANSWERS LATEST UPDATE

Question 1: All of the following are required for a person to obtain a resident producer's license EXCEPT:
a. completion of a prelicensing course of study
b. payment of the required licensing fees
c. at least one appointment by an insurer
d. being at least 18 years of age
Correct Answer: c. at least one appointment by an insurer

Question 2: An insurance company formed under the laws of another state is a/an
a. authorized insurer
b. domestic insurer
c. foreign insurer
d. alien insurer
Correct Answer: c. foreign insurer

Question 3: Which of the following statements regarding branch offices is correct?
a. branch offices must close when a licensed producer is not present
b. a branch office is another name for an agent's private office
c. a producer must give the state 30 days advance notice before opening a branch office
d. an unlicensed person may manage a branch office if the person does not sell insurance
Correct Answer: c. a producer must give the state 30 days advance notice before opening a branch office

Question 4: Exchanging an insurance policy in return for money collected on behalf of an insurer is the definition of
a. selling insurance
b. soliciting insurance
c. negotiating insurance
d. insurance-related conduct
Correct Answer: a. selling insurance

Question 5: Charles wants to obtain a property and casualty insurance producer's license. He can request a waiver of the prelicensing education requirement for all of the following reasons EXCEPT
a. he was previously licensed for the same line of insurance less than a year ago
b. Charles is a chartered property & casualty underwriter (CPCU)
c. Charles is an attorney
d. Charles has an associate in risk management (ARM) designation
Correct Answer: c. Charles is an attorney

Question 6: Which of the following is true if the Commissioner revokes a producer's license?
a. the revocation is permanent
b. revoked producer licenses are automatically reinstated after five years
c. a producer may apply for reinstatement through the same procedure used to reinstate a suspended license
d. to reinstate a revoked license, the applicant must provide an affidavit showing restitution and character improvement, among other things
Correct Answer: d. to reinstate a revoked license, the applicant must provide an affidavit showing restitution and character improvement, among other things

Question 7: For how long is a temporary work authority valid?
a. 30 days
b. 60 days
c. 90 days
d. 180 days
Correct Answer: b. 60 days

Question 8: How does the judicial branch regulate the insurance industry in New Jersey?
a. it creates the insurance code
b. it creates rules and regulations
c. it interpret and applies the code and regulations
d. it administers the law
Correct Answer: c. it interpret and applies the code and regulations

Question 9: Seth, an agent, decides he must protect himself from potential claims from policyholders, both legitimate and illegitimate. What are some methods by which he can protect himself in the event of such a claim?
a. hire a lawyer to be on the agency staff
b. document conversations with policyholders about insurance transactions and consider errors and omissions coverage
c. buy errors & omissions coverage because it will cover all claims
d. deal only with trustworthy clients
Correct Answer: b. document conversations with policyholders about insurance transactions and consider errors and omissions coverage

Question 10: Abstract Chemical Corp. cannot find an insurer in its home state that will provide a certain type of liability insurance that it needs. What is the best option for Abstract Chemical?
a. dissolve the business since it cannot continue without sufficient liability insurance
b. seek coverage through a nonadmitted insurer that can provide excess & surplus lines insurance
c. prepare to file for bankruptcy when a liability claim is made for which there is no coverage
d. seek coverage through a government-sponsored insurance program
Correct Answer: b. seek coverage through a nonadmitted insurer that can provide excess & surplus lines insurance

Question 11: Bonnie works for an insurance company where she assesses insurance policy applications to determine whether they should be accepted or rejected, a process known as
Correct Answer: underwriting

Question 12: The primary insurance regulatory activities of state insurance departments include all of the following EXCEPT:
a. insurer and producer licensing
b. investigating insurer solvency
c. arresting unethical producers
d. market conduct investigation
Correct Answer: c. arresting unethical producers