PROPERTY & CASUALTY IL LAW, IL
CASUALTY INSURANCE PRACTICE
TEST QUESTIONS, CASUALTY
PRODUCER IL EXAM QUESTIONS,
PROPERTY AND CASUALTY ILLINOIS
LAW, PROPERTY/CASUALTY IL LAWS &
REGULATIONS
Question 1: What is the primary function and significance of the federal
McCarran-Ferguson Act?
A) It establishes a singular, mandatory federal insurance policy for all citizens.
B) Federal law that allows most insurance regulation to be done at the state level.
✔️✔️
C) It abolishes the authority of state governors to oversee local commercial trade.
D) It places all insurance company taxation under the exclusive control of the SEC.
Question 2: Which of the following accurately describes the regulatory powers
held by the "director" who oversees the Illinois Department of Insurance?
A) The power to rewrite state tax brackets and independently seize corporate real
estate.
B) Overseen by governor-appointed "director" who has the power to: Make
reasonable rules and regulations to enforce insurance laws. Conduct reasonable
investigations to determine violations of state insurance requirements. Issue
immediate cease-and-desist orders to halt illegal insurance practices. Issue
subpoenas in order to obtain insurance documents. Require individuals to testify
under oath about insurance matters. Issue, deny, suspend or revoke insurance
licenses for individuals and businesses ✔️✔️
C) The authority to bypass state courts to hand down criminal prison sentences
directly.
,D) The jurisdiction to regulate international trade agreements independent of
federal oversight.
Question 3: What are the legal ramifications and procedural rules associated with
enforcement actions taken by the DOI Director?
A) Violations result in automatic permanent imprisonment without the possibility
of a hearing.
B) Failure to comply with director orders can result in $2,000 to $20,000 in
additional fines. Guilty party can be forced to pay for independent investigations.
Cease-and-desist orders generally include the right to a hearing within 30 days.
Investigated parties must receive copies of reports before the public. ✔️✔️
C) Disobeying an order carries a flat $50 fine, and investigation reports are
immediately published online before the party is notified.
D) Hearings must be delayed for at least one full year, and the state must fully fund
all defense costs.
Question 4: Under what circumstances is an individual legally required to hold a
professional insurance Producer license?
A) Only when managing the physical maintenance of an insurance agency's office
building.
B) Producer license generally required when doing any of the following for
compensation: Selling insurance. Encouraging someone to buy insurance.
Negotiating terms of insurance. Giving insurance advice. ✔️✔️
C) Exclusively when purchasing a personal auto or homeowners policy for
themselves.
D) When working as an unpaid intern providing general administrative office
support.
• Acting without a license is Class A misdemeanor ($2,500 and 1 year in jail).
,Unlicensed Persons -ANSWER ✔️✔️• An insurer or producer cannot compensate an
unlicensed person for selling or negotiating insurance:
• Possible exception for a formerly licensed person who is receiving deferred
compensation and was licensed at time of transaction.
Who Doesn't Need a License? -ANSWER ✔️✔️An attorney giving legal advice
about insurance laws or an insurance contract.
• An accountant giving insurance-related advice as part of his or her job duties.
• A public adjuster giving insurance-related opinions or advice as part of his or her
job duties.
• Officers, directors or employees of insurance businesses who don't receive any
type of sales commission and whose jobs are managerial, executive, administrative
or clerical in nature and aren't related directly to sales.
• Certain people who have insurance-specific careers but don't receive any type of
sales compensation (such as insurance employees who evaluate insurance
applications, investigate claims or process insurance-related paperwork).
• Group benefit administrators who aren't compensated by an insurance business.
• Salaried, full-time risk managers who neither sell insurance nor receive
insurance-related compensation.
License Qualifications -ANSWER ✔️✔️• 18 or older.
• Pre-license education.
• State exam.
• Licensing fee.
• Good moral character.
• Might not be eligible if :
• Committed felony.
, • Fail to pay child support.
• Had a license revoked in another state.
What's on a License? -ANSWER ✔️✔️• Producer's name.
• License number.
• Date of issuance.
• Date of expiration.
• Address.
• Line of authority (Life, health, property, casualty, etc.).
Lines of Authority -ANSWER ✔️✔️• Each line generally requires 20 hours of
prelicense education and a state exam.
• Life.
• Accident and health.
• Property (Fire).
• Casualty.
Other Lines of Authority -ANSWER ✔️✔️• Slightly different requirements might
exist for the following less common lines of authority:
• Personal lines.
• Motor vehicle.
• Variable contracts.
• Limited lines.
CASUALTY INSURANCE PRACTICE
TEST QUESTIONS, CASUALTY
PRODUCER IL EXAM QUESTIONS,
PROPERTY AND CASUALTY ILLINOIS
LAW, PROPERTY/CASUALTY IL LAWS &
REGULATIONS
Question 1: What is the primary function and significance of the federal
McCarran-Ferguson Act?
A) It establishes a singular, mandatory federal insurance policy for all citizens.
B) Federal law that allows most insurance regulation to be done at the state level.
✔️✔️
C) It abolishes the authority of state governors to oversee local commercial trade.
D) It places all insurance company taxation under the exclusive control of the SEC.
Question 2: Which of the following accurately describes the regulatory powers
held by the "director" who oversees the Illinois Department of Insurance?
A) The power to rewrite state tax brackets and independently seize corporate real
estate.
B) Overseen by governor-appointed "director" who has the power to: Make
reasonable rules and regulations to enforce insurance laws. Conduct reasonable
investigations to determine violations of state insurance requirements. Issue
immediate cease-and-desist orders to halt illegal insurance practices. Issue
subpoenas in order to obtain insurance documents. Require individuals to testify
under oath about insurance matters. Issue, deny, suspend or revoke insurance
licenses for individuals and businesses ✔️✔️
C) The authority to bypass state courts to hand down criminal prison sentences
directly.
,D) The jurisdiction to regulate international trade agreements independent of
federal oversight.
Question 3: What are the legal ramifications and procedural rules associated with
enforcement actions taken by the DOI Director?
A) Violations result in automatic permanent imprisonment without the possibility
of a hearing.
B) Failure to comply with director orders can result in $2,000 to $20,000 in
additional fines. Guilty party can be forced to pay for independent investigations.
Cease-and-desist orders generally include the right to a hearing within 30 days.
Investigated parties must receive copies of reports before the public. ✔️✔️
C) Disobeying an order carries a flat $50 fine, and investigation reports are
immediately published online before the party is notified.
D) Hearings must be delayed for at least one full year, and the state must fully fund
all defense costs.
Question 4: Under what circumstances is an individual legally required to hold a
professional insurance Producer license?
A) Only when managing the physical maintenance of an insurance agency's office
building.
B) Producer license generally required when doing any of the following for
compensation: Selling insurance. Encouraging someone to buy insurance.
Negotiating terms of insurance. Giving insurance advice. ✔️✔️
C) Exclusively when purchasing a personal auto or homeowners policy for
themselves.
D) When working as an unpaid intern providing general administrative office
support.
• Acting without a license is Class A misdemeanor ($2,500 and 1 year in jail).
,Unlicensed Persons -ANSWER ✔️✔️• An insurer or producer cannot compensate an
unlicensed person for selling or negotiating insurance:
• Possible exception for a formerly licensed person who is receiving deferred
compensation and was licensed at time of transaction.
Who Doesn't Need a License? -ANSWER ✔️✔️An attorney giving legal advice
about insurance laws or an insurance contract.
• An accountant giving insurance-related advice as part of his or her job duties.
• A public adjuster giving insurance-related opinions or advice as part of his or her
job duties.
• Officers, directors or employees of insurance businesses who don't receive any
type of sales commission and whose jobs are managerial, executive, administrative
or clerical in nature and aren't related directly to sales.
• Certain people who have insurance-specific careers but don't receive any type of
sales compensation (such as insurance employees who evaluate insurance
applications, investigate claims or process insurance-related paperwork).
• Group benefit administrators who aren't compensated by an insurance business.
• Salaried, full-time risk managers who neither sell insurance nor receive
insurance-related compensation.
License Qualifications -ANSWER ✔️✔️• 18 or older.
• Pre-license education.
• State exam.
• Licensing fee.
• Good moral character.
• Might not be eligible if :
• Committed felony.
, • Fail to pay child support.
• Had a license revoked in another state.
What's on a License? -ANSWER ✔️✔️• Producer's name.
• License number.
• Date of issuance.
• Date of expiration.
• Address.
• Line of authority (Life, health, property, casualty, etc.).
Lines of Authority -ANSWER ✔️✔️• Each line generally requires 20 hours of
prelicense education and a state exam.
• Life.
• Accident and health.
• Property (Fire).
• Casualty.
Other Lines of Authority -ANSWER ✔️✔️• Slightly different requirements might
exist for the following less common lines of authority:
• Personal lines.
• Motor vehicle.
• Variable contracts.
• Limited lines.
