California Property and Casualty Insurance Exam Correct and Verified Answers Graded A

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California Property and Casualty Insurance Exam Correct and Verified Answers Graded A

• Who is able to place business through the California Automobile Assessed Risk

Program?• Correct Answer: Only agent/brokers licensed in fire and Casualty who have also been certified through CAARP

2. All of the following are duties of a Managing General Agent EXCEPT:

• A) Negotiating reinsurance on behalf of the insurer • B) Binding ceding insurance • C) Delivering policies to the insured • D) Managing a portion of the insurer's business

• Correct Answer: C) Delivering policies to the insured

• The managing General Agent negotiates and binds ceding Insurance on behalf of

whom?

• Correct Answer: The insurer

• Which of the following describes a contract of reinsurance?

• A) The first insurer issues insurance to compensate another insurer for losses on contracts issued by that second insurer • B) An agreement where the insured transfers their risk directly to a state fund • C) A policy that solely covers excess liability for commercial auto fleets • D) A temporary binder used until a primary policy is underwritten

• Correct Answer: A) The first insurer issues insurance to compensate another

insurer for losses on contracts issued by that second insurer

• All the following are requirements for determining an area that qualifies for Low

Cost Automobile Insurance EXCEPT:

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• A) The average household income of the area • B) The population density of the region • C) The number of auto accidents that occur within the country • D) The historical claim frequency in the zip code • Correct Answer: C) The number of auto accidents that occur within the country

• When can a person who sells real property require the use of a specific insurance

agent, broker or solicitor?

• Correct Answer: A buyer is always able to choose their own insurance

representative

• How many classes of insurance are defined under California Insurance Law,

including "miscellaneous" and "reserved"?

• Correct Answer: There are a total of 20 classes of insurance defined under

California Law, with many sub-classes.

• What is the procedure for refusing uninsured motorist coverage in a liability policy?

• Correct Answer: Prior to issuance or renewal, the insured may state in writing that they do not want the coverage

• All the following are authorized activities for the Limited Automobile Insurance

Agent EXCEPT if the agent:

• A) Transacts limited coverage auto insurance • B) Charges and collects a brokers fee for service • C) Collects premiums for an auto policy • D) Assists in completing standard applications

• Correct Answer: B) Charges and collects a brokers fee for service

• What is the required rate discount under a Good Driver Discount policy?

• Correct Answer: 20?low the rate the insured would have been otherwise

charged for the same coverage

• Can a lender, as a condition of making a loan, require that any insurance be placed

through a particular insurance agent or broker?

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• Correct Answer: The loan recipient may always select a particular agent or broker of their choosing

• All of the following apply to "Approved of Insurance Rates" EXCEPT:

• A) Rates must not be excessive • B) Rates must not be unfairly discriminatory • C) A commissioner shall notify the public of a rate change after it has been approved • D) Rates must be adequate to maintain solvency • Correct Answer: C) A commissioner shall notify the public of a rate change after it has been approved

• Who must be able to inspect records of insurance transactions made availability

by agent-brokers at any time?

• Correct Answer: The insurance commissioner

• All the following conditions must be met before a surplus lines broker may place

insurance with a nonadmitted insurer EXCEPT:

• A) A diligent search of admitted insurers must be conducted • B) That the rate for the places insurance must be the lowest option • C) The coverage cannot be placed for the sole purpose of a lower premium • D) The insurer must be on the List of Approved Surplus Lines Insurers (LASLI) • Correct Answer: B) That the rate for the places insurance must be the lowest option

• In conducting the business and affairs of the State Compensation Insurance Fund,

the president of the fund may do any of the following EXCEPT:

• A) Enter into contracts of workers' compensation insurance • B) Sell life insurance covering compensation benefits • C) Decline to insure a risk under specific conditions • D) Reinsure any risk or any part thereof

• Correct Answer: B) Sell life insurance covering compensation benefits

• Which is an ACCURATE statement regarding the List of Approved Surplus Lines

Insurers?

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• A) Eligible carriers do not need to file documents with the California Department of Insurance • B) Admitted insurers are automatically added to the list • C) Insurers must guarantee a 0% insolvency rate • D) Only domestic insurers can be added to the list

• Correct Answer: A) Eligible carriers do not need to file documents with the

California Department of Insurance

• A personal lines licensed is an agent-broker who is able to transact coverage for all

of the following EXCEPT:

• A) Personal automobiles • B) Residential property • C) Personal inland marine • D) Personal aircraft

• Correct Answer: D) Personal aircraft

• What is the maximum coverage allowed through the California Automobile

Assigned Risk Program for bodily injury and death?• Correct Answer: The max coverage per accident is limited to $30,000 of all persons as a result of any one accident

• What is the method used for placing business with the California Automobile

Assigned Risk Program?

• Correct Answer: The percentage of CAARP policies requires is equal to the

percentage of regular insurance policies the insurer has issued within the state

• How many days prior to policy expiration is an insurer requires to mail a non

renewal notice to the named insured?

• Correct Answer: 30 days

• All of the following are permissible reasons for a consumer reporting agency to

furnish motor vehicle, past claims, or credit reports EXCEPT:

• A) For underwriting a new insurance policy • B) To process an active insurance claim