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Pearson Vue Property Insurance Exam
Practice Questions with Verified Answers
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Consist of 50 multichoice Questions with Answers
- In this state, a domestic insurer is defined as a company that: A. Operates in this state but is incorporated in another state B. operates in this state but is domiciled in another state C. is headquartered in this state D. is incorporated in this state Answer is incorporated in this state
- The Insurance Commissioner may issue a limited insurance representative license to an individual who wants to sell which of the following types of policies?
2 / A. Fire B. Automobile C. Mortgage Guaranty D. Health Answer Mortgage Guaranty
- Upon determining that a producer has violated the insurance law, the Insur- ance Commissioner is required to take which of the following actions? A. Place the licensee on probation immediately B. Publish notice of the violation C. Hold a hearing on the infraction D. Submit the infraction to the Department of Insurance for review Answer Hold a hearing on the infraction
- An insurer that intends to nonrenew a Homeowners policy MUST take which of the following actions? A. Obtain coverage for the policyholder from another insurer B. Obtain coverage for the policyholder under the FAIR Plan
4 / B. reduce coverage to develop a new premium that does not exceed the expiring policy's premium C. provide a renewal policy that matches the expiring policy's coverages and premium D. pay a $3,000 fine per violation to the Division of Insurance Answer provide a renewal policy that matches the expiring policy's coverages and premium
- Which of the following persons may assign a Standard Fire policy? A. A claims adjuster B. The Superintendent of Insurance C. The insured with the permission of the insurance company D. The insured only Answer The insured with the permission of the insurance company
- The Insurance Commissioner may suspend, revoke, or deny a producer's license for all of the following reasons EXCEPT: A. Untrue statements on the license application B. Conviction of a misdemeanor C. Incompetency D. Coverting funds
5 / Answer Conviction of a misdemeanor
- An insurer that generally fails to affirm or deny coverage of claims within a reasonable period of time after receiving Proof of Loss may be found guilty of: A. a breach of fiduciary responsibility B. an improper claims practice C. defamation D. misrepresentation Answer an improper claims practice
- After an insurance producer license is issued, a licensee MUST complete how many hours of approved continuing education courses every two years?
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C. 15
D. 7.
Answer 15 Prelicensing: 15 hrs Continuing education: 24 hrs in 24 mo
- Making false or misleading statements about dividends or shares of sur- plus previously paid on an insurance policy is known as: A. unfair discrimination B. rebating C. coercion D. misrepresentation Answer misrepresentation
- An insurer that permits different rate classifications for individuals of the same class and same hazard may be guilty of A. boycotting B. unfair discrimination C. misrepresentation D. defamation
8 / Answer unfair discrimination
- Which of the following situations is considered an insurance transaction? A. Two insurance companies share actuarial data
10 / B. Tools required to secure the property C. plastic sheeting and lumber D. the value of work, at the federal minimum wage, that a member of the household performs Answer Tools required to secure the property
- An incorporated insurer with capital divided into shares and owned by its shareholders is known as: A. a stock company B. a mutual company C. a fraternal benefit society D. an association group Answer a stock company
- After an insurer receives a satisfactory proof of loss from an insured on a fire loss, payment is due within a MAXIMUM of how many days? A. 5 B. 30 C. 60 D. 90 Answer 5
- To obtain coverage from this state's FAIR Plan, an applicant MUST
11 / A. show that a diligent search was made through established markets B. apply at least thirty days prior to the desired effective data of the coverage C. pay a premium surcharge based on the applicants past claims experience D. pay a premium surcharge based on the type of property to be insured Answer show that a diligent search was made through established markets FAIR plan source: Established markets
- An individual appointed by an insurer to solicit applications for a policy of insurance or to negotiate a policy on its behalf is known as: A. an adjuster B. a consultant C. an insurance broker D. an insurance producer Answer an insurance producer
- XYZ Insurance Company recently received its certificate of authority to sell property insurance in Illinois. XYZ is an Iowa insurer but will sell
13 / A. automobile insurance for high-risk drivers B. crime insurance for residents of high-risk neighborhoods C. property insurance on recreational vehicles for which such coverage is
14 / unavailable in the regular market D. Basic property insurance for which coverage is not available in the regular market Answer Basic property insurance for which coverage is not available in the regular market
- The insurance commissioner is empowered to: A. enforce state laws relating to insurance B. pass state laws relating to insurance C. write policy forms for mandatory insurance coverages D. set rates for mandatory insurance coverages Answer enforce state laws relating to insurance
- The Insurance Commissioner is: A. Appointed by the President of the NAIC B. Appointed by the Governor and confirmed by the State Senate C. Appointed by the State Senate and confirmed by the Governor D. Elected through public nominations Answer Appointed by the State Senate and confirmed by the Governor
- All of the following are powers and duties of the Commissioner, except:
16 / C. Engaged in an unfair trade practice D. Failed to pass the licensing examination Answer Failed to pass the licensing
17 / examination He's not an insurance producer so he can't be determined by commissioner
- An insurance producer license is at all times considered property of who/what? A. Your property B. The property of the insurance company under which you operate C. The property of the State of Colorado D. None of the above Answer The property of the State of Colorado
- If a producer is the subject of criminal prosecution in any jurisdiction, the producer must report to the Commissioner after the initial pretrial hearing date within: A. 60 days B. 12 months C. 10 days D. 30 days Answer 30 days
- How much is the penalty for a negligent violation per accident and max per year?
19 / A. Failed to pay child support B. Issued insufficient coverage to a customer through apparent authority C. Had a license suspended or revoked in another state D. Cheated on an insurance examination Answer Issued insufficient coverage to a customer through apparent authority (Explanation in book: Being convicted of a felony, misappropriating funds belonging to someone else, demonstrating a lack of trustworthiness or competence, or com- mitting an unfair trade practice are also grounds for license suspension, non-renewal or revocation)
- Concerning license suspension and revocation, the Commissioner can take all of the following actions, except: A. Notify the producer of any license suspension, revocation, or termination B. Notify the NAIC of any license suspension, revocation, or termination C. Notify the Attorney General or District Attorney of criminal violations of the insurance code D. Impose a civil penalty of $1,500 per violation, up to $10,000 per fine in addition to or in lieu of, license termination
20 / Answer Impose a civil penalty of $1,500 per violation, up to $10,000 per fine in addition to or in lieu of, license termination A civil penalty can be imposed not to exceed $3,000 per violation.
- The definition of a Colorado producer includes which of the following: A. a person who solicits or negotiates membership enrollments in a health care plan B. A nonresident licensed to sell or negotiate commercial property and casu- alty insurance policies in another state C. An insurer D. An employer, association, or trustee administering its own employee benefit program that uses insurance Answer a person who solicits or negotiates membership enrollments in a health care plan
- Each of the following are requirements for licensure, except: A. Residency in Colorado B. Residency in a state to which Colorado grants nonresident licenses C. Passing the state licensing examination D. Being at least 21 years of age Answer Being at least 21 years of age
