Prep Review: Indiana Property Caustly

The following types of Insurance are excluded from coverage under the Indiana Property & Casualty Guaranty Association:

1. Life Insurance

2. Ocean Marine Insurance

3. Title Insurance

4. Commercial Auto Insurance

Commerical Auto Insurance

If a first or third party's property claim does not exceed the policy limit, the Indiana Property & Casualty Guaranty Association is obligated to pay up to how much per any one occurrence?

300,000

If a claim has been received in paper form by an insurer and provides the appropriate proof of loss, how many days does the insurer have to pay the claim?

45 days

A surplus lines producer must file an affidavit to include all of the following except:

1. The name and home office address of the insurer whose policy is issued.

2. The gross premium charged in the policy or contract.

3. The name of the property & casualty producer referring the business to the surplus lines broker.

4. The description and location of the insured property and risk and the named of the insured.

the name of the property & casualty producer referring the business to the surplus lines broker

The surplus lines premium tax in Indiana is:

2.50%

What is the amount of the penalty assessed by the Commissioner of Insurance if a surplus lines broker does not remit the premium tax when due?

10% of the amount of premium tax due

Which of the following statements about Surplus Lines insurance is not true?

1. The Insurance Commissioner may order a surplus lines producer to cancel the policies issued by an unauthorized insurer if the insurer's financial condition warrants it.

2. A producer may place a risk with a surplus lines carrier instead of an authorized insurer in order to take advantage of a lower price.

3. A licensed surplus lines producer must keep a separate account per transaction for each unauthorized insurer.

4. Annually, surplus lines producers must by March 31st file the financial statement of each unauthorized insurer from whom they procured policies with the Department of Insurance

A producer may place a risk with a surplus lines carrier instead of an authorized insurer in order to take advatage of a lower price

Indiana's Financial Responsibility Law allows a vehicle owner to demonstrate compliance with the law in all the following ways except:

1. Securing a bond issued on behalf of the state of Indiana.

2. Purchasing a motor vehicle liability insurance policy.

3. Assign the state of Indiana lienholder status on personal funds that meet the minimum requirements under the law.

4. Posting a certificate of self-insurance

assign the state of Indiana lienholder status on personal funds that meet the minimum requirements under the law

Uninsured Motorist Coverage pays for bodily injury caused by all of the following at-fault drivers except:

1. A motor vehicle owner whose carrier has become insolvent.

2. A driver of a vehicle that meets the definition of a hit and run driver

3. A motor vehicle owner insured through an automobile insurance plan, fund or other entity from another state who is operating his or her vehicle in Indiana.

4. A motor vehicle owner not in compliance with Indiana's Financial Responsibility Law.

a motor vehicle owner insured through an autombile insurance plan, fund or other enity from another state who is operating his or her vehicle in Indiana

When a state wants to assist applicants who are unable to obtain property insurance in the voluntary market they participate in the Fair Access Insurance Requirement (FAIR plan). In Indiana, the FAIR plan is administered by:

Indiana Basic Property Insurance Underwriting Association

When a TNC driver is logged into a TNC's digital network, but NOT engaged in a pre-arranged ride their required level of insurance is

$625,000 per person for bodily injury/$1,250,000 per accident for bodily injury, and $125,000 per accident for property damage.

Property insurance limits under the FAIR plan will not exceed the following:

$250,000 for residential risk and $1,000,000 for commercial risk combined building and contents coverage.

Mine subsidence covers damage to home when mines collapse due to

unstable mine structures

Coverage for damage due to mine subsidence must be available as an additional form of first party property insurance to directly cover one or more structures located in:

In a county identified by the State Department of Natural Resources.

The restrictions placed upon insurers in cancelling and refusing to renew residential policies applies to

Dwelling policies

A notice of non-renewal of property insurance must include all of the following except:

1. State the insurer's intention not to renew the policy upon expiration of the current policy period.

2. Be provided to the named insured at least 30 days before the expiration date of the current policy.

3. Upon request of the named insured, be accompanied by a written explanation of the specific reasons for the non-renewal.

4. Be in writing

Be provided to the named insured at least 30 days before the expiration date of the current policy.

All of the following are excluded classes of employment under the Workers Compensation Act except:

1. Independent contractors as defined by the IRS.

2. Farm or agricultural employees.

3. Railroad employees

4. Employee of a state department or agency.

employee of a state department of agency

What is the waiting period before disability income benefits are paid?

7 days

Both temporary total and permanent total disability income benefits are based on what percentage of the employees average weekly wage?

66.67%

Under Workers Compensation, a funeral or burial expense will be paid that does not exceed:

$10,000

In situations where a compensable claim is presented by a minor, the Act allows for an aggregate lump sum payment as follows:

An amount not to exceed $100 to an employee or dependent under the age of 18 and if the amount of the payment exceeds $100, the payment must be made to a parent, guardian or trustee.

What is the purpose of the state's Second Injury Fund?

To encourage the employment of individuals with a pre existing medical condition that was a compensable injury.

The Second Injury Fund is administered by the:

State Workers Compensation Board

The Indiana Workers Compensation Assigned Risk Plan acts as an insurer of last resort for applicants unable to obtain coverage in the voluntary market. What is an essential requirement to qualify for coverage under this plan?

An employer must first be rejected by three workers compensation insurers voluntarily selling insurance in the state.

All of the following are acceptable reasons for cancelling commercial property insurance in effect for more than 90 days except:

1. There is a substantial change in the scale of the risk covered by the policy.

2. The insured has perpetrated a fraud or material misrepresentation upon the insurer.

3. The insured has failed to comply with reasonable safety recommendations.

4. An insured suffers two severe weather related claims in a three year period.

The insured has perpetrated a fraud or material misrepresentation upon the insurer.

In the case of a commercial property policy in effect more than 90 days, how many days advance notice of cancellation must be sent to the insured except for non-payment of premium and fraud and material misrepresentation?

45 days

How many days advance notice of cancellation must an insurer give to the insured for a commercial policy in effect less than 90 days?

10 days for non-payment of premium, 20 days for fraud or material misrepresentation and 30 days for any other reason.

A business entity acting as an insurance producer MUST:

designate at least one licensed producer to be responsible for the entity’s compliance with insurance laws and rules

A licensed business entity acting as an insurance producer MUST:

1. notify the Department of Insurance of any fictitious name used

2. report commissions to the Bureau of Insurance

3. complete continuing education requirements every 5 years

4. have been conducting business in Indiana for 3 years

notify the Department of Insurance of any fictitious name used

A producer inducing an insured to lapse, forfeit, or surrender insurance through misrepresentation is committing the illegal act of:

twisting

A producer inducing an insured to lapse, forfeit, or surrender insurance through misrepresentation is committing the illegal act of:

turning down a claim without providing the basis of denial

An example of an Unfair Claims Settlement Practice would be:

1. requesting a third-party arbitrator to resolve a disagreement

2. denying an insured’s claim without indicating the basis of denial

3. requiring the insured to give a statement under oath

4. paying a claim promptly after receiving proof of loss

denying an insured’s claim without indicating the basis of denial

An example of an Unfair Claims Settlement Practice would be:

1. requesting a third-party arbitrator to resolve a disagreement

2. requiring the insured to give a statement under oath

3. failing to effectuate prompt, fair, and equitable settlements of a claim

4. paying a claim promptly after receiving proof of loss

failing to effectuate prompt, fair, and equitable settlements of a claim

An example of an Unfair Claims Settlement Practice would be:

1. requesting a third-party arbitrator to resolve a disagreement

2. paying a claim promptly after receiving proof of loss

3. misrepresenting insurance policy provisions affecting a loss

4. requiring the insured to give a statement under oath

misrepresenting insurance policy provisions affecting a loss

An example of rebating would be:

1. Reducing the premiums across the board for a specific risk class

2. Offering temporary insurance coverage

3. A mutual insurance company paying dividends to its policyowners

4. Splitting commissions with a policyholder

Splitting commissions with a policyholder

An example of rebating would be:

1. using intimidation in order to restrain or monopolize the business of insurance

2. a mutual insurance company paying dividends to its policyowners

3. returning a portion of a premium as inducement to purchase insurance

4. reducing the premiums across the board for a specific risk class

returning a portion of a premium as inducement to purchase insurance

An example of rebating would be:

1. offering a client something of value not stated in the contract in exchange for their business

2. a mutual insurance company paying dividends to its policyowners

3. using intimidation in order to restrain or monopolize the business of insurance.

4. reducing the premiums across the board for a specific risk class

offering a client something of value not stated in the contract in exchange for their business

An example of unfair discrimination would be:

1. declining an insurance application because of involvement in a hazardous occupation

2. offering the same terms of coverage to different policyowners in the same risk classification

3. offering different terms of coverage for different policyowners having the same risk classification

4. issuing a policy at a substandard rate because of poor health

offering different terms of coverage for different policyowners having the same risk classification

An insurance company that has qualified and received a Certificate of Authority from the Department of Insurance to sell insurance in this state is considered to be a(n) ________ insurer.

admitted

An insurer distributes public brochures that contain a false statement regarding a competitor’s ability to pay claims. This act is considered an example of:

defamation

An insurer is NOT required to provide information on fraudulent claims if requested by

1. the Insurance Commissioner

2. the Attorney General

3. an insured

4. the Indiana Department of Insurance

an insured

At what point may a producer sell insurance for an insurer?

1. After completing a prelicensing course

2. After being properly appointed by the insurer

3. After taking the licensing exam

4. After meeting the insurer’s production requirements

After being properly appointed by the insurer

Defamation occurs when a producer makes a false statement intended to:

1. replace an existing insurance policy with another

2. malign another insurer

3. restrict fair trade

4. misrepresent the provisions of an insurance policy

malign another insurer

If a producer commits an act of coercion or intimidation, how would the producer’s insurance company be held responsible for this act?

1. If the insurer reduces the commission level of the producer

2. If the insurer only suspends the producer, not terminate

3. If the insurer does not make a public announcement of the act

4. If the insurer approves of the act

If the insurer approves of the act

In Indiana, the MAXIMUM fine that the Commissioner can impose on a producer or company who violates a cease and desist order is _____ per violation.

$25,000

In Indiana, what is the maximum percentage of controlled business a producer may produce over a twelve-month period?

25%

In Indiana, which of the following is considered an Unfair Competition Practice?

1. Coercion

2. Aleatory

3. Subrogation

4. Replacement

Coercion

J is a producer who has induced an insured through misrepresentation to surrender an existing insurance policy. What is J guilty of?

Twisting

P is a producer who is licensed in Indiana, but a resident of Michigan. In Indiana, P is considered to be a(n) ______ producer.

NONRESIDENT

The Commissioner is appointed by the

Governor

The Insurance Commissioner is authorized:

to enforce state laws relating to insurance

The Insurance Guaranty Association is:

1. an entity that assists in underwriting large insurance policies

2. administered by the Federal government

3. funded by admitted insurance companies through assessments

4. funded by the state government

funded by admitted insurance companies through assessments

What does a certificate of authority allow?

1. An insurance company to exceed coverage limits that the Guaranty Fund covers

2. An insurance company to conduct insurance business in Indiana

3. A resident producer to sell insurance contracts

4. A nonresident producer to conduct insurance business

An insurance company to conduct insurance business in Indiana

What does the Indiana Insurance Guaranty Association provide?

1. Underwriting services for high-risk insurance applicants

2. Claim payments of admitted, insolvent insurance companies

3. Enforcement for Indiana’s insurance regulations

4. Establishment of underwriting guidelines for admitted insurers

Claim payments of admitted, insolvent insurance companies

Which of the following actions does the Insurance Commissioner NOT have the power to conduct?

1. Promulgate rules and regulations

2. Issue subpoenas and administer oaths

3. Activate insurance companies’ financial reserves

4. Liquidate a failing insurance company

Activate insurance companies’ financial reserves

Which of the following is NOT a reason for the Commissioner to revoke a producer’s license?

1. Producer published malicious and false information toward another insurance company

2. Producer offered a client a return of commission in exchange for a sale

3. Producer is insolvent

4. Producer found guilty of twisting after a hearing

Producer is insolvent

Which of the following is NOT an unfair claim settlement practice?

1. Failing to accept or deny a claim within reasonable time after proof of loss is submitted

2. Failing to acknowledge and act promptly with respect to an insurance claim

3. Needing written documentation of claim

4. Compelling an insured to initiate a lawsuit by offering less on an insurance claim

Needing written documentation of claim

Which of the following permits an insurance company to transact business in Indiana?

certificate of authority

Which of the following provides funding for the Indiana Insurance Guaranty Association?

1. Member company assessments

2. NAIC

3. Revenue bonds

4. Department of Insurance

Member company assessments

Which of the following statements is correct about the Insurance Commissioner’s authority to examine the business records of a producer?

1. The Commissioner must examine them at least twice every five years

2. The Commissioner has no authority to examine them

3. The Commissioner may examine them whenever it’s deemed necessary

4. The Commissioner must examine them at least twice every three years

The commissioner may examine them whenever it’s deemed necessary

Which of these is an example of twisting?

1. A producer reduces the commission in order to sell a policy

2. A producer maliciously aligns another insurance company’s financial status

3. A producer misrepresents a policy to induce a policyowner to surrender an existing policy

4. A producer induces a policyowner with something of value to purchase a policy

A producer misrepresents a policy to induce a policyowner to surrender an existing policy