KENTUCKY ADJUSTER EXAM PREP:
2026/2027 UPDATED EDITION – KENTUCKY
REVISED STATUTES (KRS) CHAPTER 304 -
Complete Practice Assessment with
State-Specific Rationales
📜 SECTION 1: KENTUCKY INSURANCE LAWS & REGULATIONS – 22 Items
Q1 (Multiple Choice): Under Kentucky Revised Statutes (KRS) 304.9-420, which of the
following is a minimum requirement for an individual adjuster license in Kentucky?
A. Be at least 18 years old
B. Be a Kentucky resident for minimum 6 months
C. Hold a bachelor's degree in any field
D. Complete 40 hours of pre-licensing education
Correct Answer: A
Rationale: KRS 304.9-420 establishes three core requirements: (1) minimum age of 18,
(2) trustworthiness and competence, and (3) passing the required examination (unless
exempt via reciprocity). Residency (B) is not required—non-residents may obtain
,licenses. No degree (C) or specific pre-licensing hours (D) are mandated by statute,
though education is strongly recommended.
❌ B: Non-residents licensed through reciprocity; no residency waiting period.
❌ C: No educational degree requirement.
❌ D: Pre-licensing education not statutorily mandated; exam is the gatekeeper.
Cognitive Level: Knowledge | KRS Reference: 304.9-420 | Topic: Licensing Qualifications
Q2 (Multiple Choice): According to KRS 304.9-430, an applicant for a Kentucky adjuster
license who holds a valid adjuster license from Indiana—a state with which Kentucky
has a reciprocal agreement—is:
A. Required to take the Kentucky exam but may waive the pre-licensing course
B. Exempt from the Kentucky licensing examination
C. Required to complete 12 months of supervised adjusting before licensure
D. Limited to adjusting only Indiana-based claims
Correct Answer: B
Rationale: Reciprocity exemption is the cornerstone of KRS 304.9-430. Applicants
holding valid licenses from reciprocal states bypass examination requirements.
Kentucky maintains reciprocity with most states, including all neighboring states. The
license grants full adjusting authority, not geographic restrictions.
❌ A: Reciprocity exempts from exam entirely; no conditional waiver.
❌ C: No supervised practice requirement for reciprocal licensees.
,❌ D: Kentucky license permits adjusting any covered claim statewide.
Cognitive Level: Application | KRS Reference: 304.9-430 | Topic: Reciprocity
Q3 (SATA): Which of the following constitute prohibited practices under Kentucky's
Unfair Claims Settlement Practices Act (KRS 304.12-230)? (Select all that apply.)
A. Failing to acknowledge and act reasonably promptly upon communications with
respect to claims
B. Denying a claim without conducting a reasonable investigation
C. Offering a settlement that accurately reflects policy limits and damages
D. Compelling policyholders to institute litigation to recover amounts due by offering
substantially less than the amounts ultimately recovered in actions brought by such
insureds
E. Attempting to settle a claim for less than the amount a reasonable person would
believe the claimant was entitled to by reference to written or printed advertising
material accompanying or made part of an application
F. Providing timely written explanation of claim denials
Correct Answers: A, B, D, E
Rationale: KRS 304.12-230 enumerates 16 specific prohibited acts including: failure to
acknowledge communications promptly (A); denying without investigation (B);
"lowballing" offers that force litigation (D); and settling below reasonable expectations
set by advertising (E). Offering fair settlements (C) and providing explanations (F) are
required practices, not prohibited.
, Exam Tip: The statute creates affirmative duties; violations trigger administrative
penalties and potential bad faith liability.
Cognitive Level: Analysis | KRS Reference: 304.12-230 | Topic: Unfair Claims Practices
Q4 (True/False with Justification):
Statement: Under KRS 304.12-235 (Prompt Payment of Claims), an insurer must
acknowledge receipt of a claim within 15 working days and make a determination within
30 days of receipt of proof of loss.
Correct Answer: FALSE
Justification: KRS 304.12-235 establishes stricter timelines:
● Acknowledge receipt: 10 working days from notice of claim
● Accept/deny determination: 15 working days after receipt of proof of loss
(unless investigation delayed by factors beyond control)
● Payment: Within 30 days of settlement agreement
The statement inflates the acknowledgment timeline by 50% and conflates
determination with payment deadlines—critical errors for exam identification.
Cognitive Level: Analysis | KRS Reference: 304.12-235 | Topic: Prompt Payment
Timelines
Q5 (Multiple Choice): What is the statute of limitations for filing a lawsuit based on a
written insurance contract in Kentucky?
A. 5 years
B. 10 years
2026/2027 UPDATED EDITION – KENTUCKY
REVISED STATUTES (KRS) CHAPTER 304 -
Complete Practice Assessment with
State-Specific Rationales
📜 SECTION 1: KENTUCKY INSURANCE LAWS & REGULATIONS – 22 Items
Q1 (Multiple Choice): Under Kentucky Revised Statutes (KRS) 304.9-420, which of the
following is a minimum requirement for an individual adjuster license in Kentucky?
A. Be at least 18 years old
B. Be a Kentucky resident for minimum 6 months
C. Hold a bachelor's degree in any field
D. Complete 40 hours of pre-licensing education
Correct Answer: A
Rationale: KRS 304.9-420 establishes three core requirements: (1) minimum age of 18,
(2) trustworthiness and competence, and (3) passing the required examination (unless
exempt via reciprocity). Residency (B) is not required—non-residents may obtain
,licenses. No degree (C) or specific pre-licensing hours (D) are mandated by statute,
though education is strongly recommended.
❌ B: Non-residents licensed through reciprocity; no residency waiting period.
❌ C: No educational degree requirement.
❌ D: Pre-licensing education not statutorily mandated; exam is the gatekeeper.
Cognitive Level: Knowledge | KRS Reference: 304.9-420 | Topic: Licensing Qualifications
Q2 (Multiple Choice): According to KRS 304.9-430, an applicant for a Kentucky adjuster
license who holds a valid adjuster license from Indiana—a state with which Kentucky
has a reciprocal agreement—is:
A. Required to take the Kentucky exam but may waive the pre-licensing course
B. Exempt from the Kentucky licensing examination
C. Required to complete 12 months of supervised adjusting before licensure
D. Limited to adjusting only Indiana-based claims
Correct Answer: B
Rationale: Reciprocity exemption is the cornerstone of KRS 304.9-430. Applicants
holding valid licenses from reciprocal states bypass examination requirements.
Kentucky maintains reciprocity with most states, including all neighboring states. The
license grants full adjusting authority, not geographic restrictions.
❌ A: Reciprocity exempts from exam entirely; no conditional waiver.
❌ C: No supervised practice requirement for reciprocal licensees.
,❌ D: Kentucky license permits adjusting any covered claim statewide.
Cognitive Level: Application | KRS Reference: 304.9-430 | Topic: Reciprocity
Q3 (SATA): Which of the following constitute prohibited practices under Kentucky's
Unfair Claims Settlement Practices Act (KRS 304.12-230)? (Select all that apply.)
A. Failing to acknowledge and act reasonably promptly upon communications with
respect to claims
B. Denying a claim without conducting a reasonable investigation
C. Offering a settlement that accurately reflects policy limits and damages
D. Compelling policyholders to institute litigation to recover amounts due by offering
substantially less than the amounts ultimately recovered in actions brought by such
insureds
E. Attempting to settle a claim for less than the amount a reasonable person would
believe the claimant was entitled to by reference to written or printed advertising
material accompanying or made part of an application
F. Providing timely written explanation of claim denials
Correct Answers: A, B, D, E
Rationale: KRS 304.12-230 enumerates 16 specific prohibited acts including: failure to
acknowledge communications promptly (A); denying without investigation (B);
"lowballing" offers that force litigation (D); and settling below reasonable expectations
set by advertising (E). Offering fair settlements (C) and providing explanations (F) are
required practices, not prohibited.
, Exam Tip: The statute creates affirmative duties; violations trigger administrative
penalties and potential bad faith liability.
Cognitive Level: Analysis | KRS Reference: 304.12-230 | Topic: Unfair Claims Practices
Q4 (True/False with Justification):
Statement: Under KRS 304.12-235 (Prompt Payment of Claims), an insurer must
acknowledge receipt of a claim within 15 working days and make a determination within
30 days of receipt of proof of loss.
Correct Answer: FALSE
Justification: KRS 304.12-235 establishes stricter timelines:
● Acknowledge receipt: 10 working days from notice of claim
● Accept/deny determination: 15 working days after receipt of proof of loss
(unless investigation delayed by factors beyond control)
● Payment: Within 30 days of settlement agreement
The statement inflates the acknowledgment timeline by 50% and conflates
determination with payment deadlines—critical errors for exam identification.
Cognitive Level: Analysis | KRS Reference: 304.12-235 | Topic: Prompt Payment
Timelines
Q5 (Multiple Choice): What is the statute of limitations for filing a lawsuit based on a
written insurance contract in Kentucky?
A. 5 years
B. 10 years
