TEXAS ALL LINES ADJUSTER LAWS REGULATION

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REVIEW QUIZ EXAM QUESTIONS

Actual Qs and Ans Expert-Verified Explanation

This Exam contains:

-Guarantee passing score -55 Questions and Answers -format set of multiple-choice -Expert-Verified Explanation Question 1: An insurer may add a surcharge to a homeowners policy that is being renewed

if the:

• insurer suspects that its reserve is below minimum required limits;
• insured has filed two or more claims in the preceding policy year;
• insured is planning to alter the structure of the residence;
• insured informs the insurer that the policy will be replaced.

Answer:

• A surcharge of up to 10 percent may be added to any homeowners, fire or farm and ranch owners'

policy if the insured has filed two or more claims in the preceding policy year.Question 2: Which one of the following statements regarding workers' compensation insurance is not correct?

• All employers domiciled in Texas are required to obtain workers' compensation insurance

coverage for their employees;

• Workers' compensation's primary advantage for the injured employee is that it provides a

quick and certain means of compensation;

• Workers' compensation protects the employer from tort liability;
• Workers' compensation provides compensation to employees who are injured on the job,

without regard to fault or negligence on the part of either the employer or employee.

Answer:

• Texas is an elective state with respect to workers' compensation coverage. Employers may elect to

provide workers' compensation insurance but are not requried to do so. If they do not, they may be sued

by employees for work-related injuries and occupational diseases.Question 3: All of the following are qualifications of applicants for an adjuster license in Texas

except:

• is at least 25 yrs. of age;
• resides in this state or a state that permits a resident of this state to act as an adjuster in that

state;

• is trustworthy;
• has passed the required examination or presents evidence that the applicant has been

exempted from the examination.

Answer:

• Applicants must be at least 18 yrs. of age.

Question 4: An employer is relieved of its responsibility to provide benefits to an employee if the employee does not notify him or her of the injury unless...

• there is good cause for the employee's failure;
• the employer or employer's insurance;
• company does not contest the claim;
• a supervisor for the employer has knowledge of the injury;
• the employee did not realize that notification was required.

Answer:

• Employees are required to report injuries to employers and any occupational disease that they now

or could reasonably know was the result of an employment exposure. If there is just cause for the late notice or the carrier accepts the claim or a manager or supervisor was aware of the injury, the employer is not relieved of responsibility to pay benefits.Question 5: Which one of the following is not an injury that would be covered by workers' compensation?

• An accident occurs while an employee is driving a forklift from a truck to the warehouse;
• The injury occurs when an employee slips on a wet floor while changing clothes in the

employee locker room;

• Several workers are injured when the hydraulic lift that moves automobile parts collapses;
• An employee who returns from lunch intoxicated cuts his hand with an electric saw.

Answer:

• An insurance carrier is not liable for compensation if the employee's injury ws caused while the

employee was intoxicated.

Question 6: When an insurer assesses a surcharge on a fire or homeowners policy due to adverse loss experience, the surcharge may not exceed what amount of the total premium?

• 5 percent;
• 10 percent;
• 15 percent;
• There is no maximum on the amount

Answer:

• A surcharge of up to 10 percent may be added to any homeowners, fire or farm and ranch owner's

policy if the insured has filed two or more claims in the preceding year. The claims may not be for losses caused by natural causes or for claims that are filed but not paid by the insurer.Question 7: What is the time limit for a person to file a claim for death benefits after an employee's death?

• 7-days after the death of the employee;
• 30 days after the death of the employee;
• No later than the first anniversary of the death of the employee;
• No later than the second anniversary of the death of the employee

Answer:

• A person must file a claim for death benefits with the commission not later than the first anniversary

of the date of the employee's death.Question 8: Each of the following is a prohibited act when committed intentionally by an attorney or other legal representative of an injured worker except...

• failing to attend an arbitration proceeding;
• engaging in frivolous litigation;
• failing to notify a claimant of his or her rights under a workers' compensation policy;
• entering into a settlement agreement without the knowledge and consent of the injured

party.

Answer:

• Notification to an employee of benefits provided under workers' compensation is requried of

employers and insurance carriers, not attorneys or the injured worker's representatives.Question 9: A licensed adjuster must notify the commissioner if the adjuster changes the

location of the adjuster's place of business:

• Within 10 days;
• Within 20 days;
• Within 30 days;
• Notification must be made promptly

Answer:

• A licensed adjuster shall promptly notify the commissioner if the adjuster changes the location of the

adjuster's place of business.

Question 10: An insurer may cancel a commercial auto policy for any of the following reasons

except:

• fraud in obtaining the policy;
• failure to pay parking fines when due;
• an increase in the hazard insured against;
• inability of the insurer to renew a reinsurance agreement.

Answer:

• An insurer may cancel a commercial auto policy at any time for the following reasons: fraud in

obtaining the policy, failure to pay premiums when due, increase in hazard insured against, loss of a reinsurance agreement or insolvencyof the insurer.Question 11: In order to nonrenew a personal auto policy, an insurer must provide how many days advance notice to the policyholder?

A. 10;

B. 20;

C. 30;

• 45

Answer:

• The same rule for providing notice of cancellation applies to nonrenewal. A notice must be sent to the

insured no less than 30 days in advance of the nonrenewal date.Question 12: Which one of the following persons would be considered an employee under the laws of the state of Texas?

• An employee of an independent contractor engaged in construction work;
• A temporary employee;
• A person employed by a residential property owner;
• A person with no other health insurance

Answer:

• The term employee includes a temporary employee, a person other than an independent contractor

or the employee of an independent contractor who performs services to the insured and a trainee under the Texans Work program. The law applies to business risks, not residential employers.Question 13: When a workers compensation injury results in death of the employee, the employee's beneficiaries are entitled to...

• a lump sum of $100,000;
• a lifetime income equal to 70 percent of the employee's wages;
• 75 percent of the employee's average weekly wage;
• nothing because the employee is the only person entitled to benefits.

Answer:

• The death benefit provided under law is 75 percent of the employee's average weekly wage payable

to the employee's beneficiary.