WASHINGTON LAWS AND RULES PERTINENT TO
INSURANCE EXAM QUESTIONS AND ANSWERS WITH
COMPLETE SOLUTIONS GRADED A++
Commissioner
The Commissioner of Insurance is the chief officer of the Washington Insurance Department. This is an
elected position serving a term of 4 years. The Commissioner also makes rules and regulations to help
carry out the provisions of the Washington insurance code.
Hearing
The Commissioner may hold a hearing whenever deemed necessary. All hearings must be held or
refused within 30 days after the Commissioner receives demand. The Commissioner must give notice of
the time and place of a hearing at least 10 days in advance.
Penalties
After the hearing, the Commissioner can impose a fine of up to $1,000 for each violation upon any
person who violates the Washington insurance code.
Cease and Desist
The Commissioner can issue a cease and desist order to anyone violating the Washington insurance
code.
,Rates and Forms
All insurance policy forms, applications, riders, or endorsements must be filed with and approved by the
Commissioner before they can be used.
Insurance
is a contract in which one party (the insurer) agrees, for a consideration (premiums), to pay the other
(the insured) a specified amount upon determinable contingencies.
Insurer
is anyone in the business of making insurance contracts other than a fraternal benefit society.
Premium
is consideration or payment for insurance coverage. Premiums are sometimes called assessments, policy
fees, or service fees.
Policy
is a written contract for insurance, including all clauses, riders, endorsements, and attached papers.
Insurance Producer
An individual who in any manner sells, solicits, or negotiates insurance on behalf of insurance companies
for compensation is an insurance producer.
Assumed Names
An insurance producer doing business under any name other than the producer's legal name shall notify
the Commissioner before using the assumed name.
Commissions
,No person shall pay or accept commissions to/from an unlicensed individual for the purpose of selling or
negotiating insurance business. Renewal or deferred commissions may be paid to a person who was
properly licensed at that time of the insurance sale.
Shared Commissions
A producer may legally share commissions only with another producer who is licensed in the same line
of insurance.
Protection of Public Interest
Insurers and agents are required to act in good faith, abstain from deception, and practice honesty and
equity in all insurance matters.
Premium Accountability
An insurance producer must report to the insurer the exam amount of consideration charged as
premium and the amount shall be shown in the contract and in the records of the producer.
Fiduciary Responsibility
Because the producer handles money of the insured and insurer, he/she has a fiduciary responsibility. A
fiduciary is someone in a position of trust. Any person who is appointed, or acts as, a producer for an
insurance company in Washington and receives or collects money from any source as an agent will be
held responsible in a fiduciary capacity for those funds.
Separate Account Requirement
All funds representing premiums or return premiums received by a producer shall be accounted for and
maintained in a separate account from all other business and personal funds.
Commingling
, A producer who has combined premiums collected with personal funds has engaged in commingling,
which is a prohibited act. An insurance producer who unlawfully appropriates insurance premiums for
their own use commits a theft.
Policy Delivery
Policies must be delivered within a reasonable period after they have been issued.
Solicitation and Sales Presentations
Producers must provide applicants and prospects with the approved NAIC Buyer's Guide. Producers must
also provide a Policy Summary to applicants.
Policy Summary
contains specific information on the provisions, benefits, and coverage of the policy applied for.
Domestic Insurance Company
A company that resides and is incorporated under the laws of the state in which its home office is
located.
Foreign Insurance Company
A company whose home office is located in another state. It is considered to be a foreign company in all
states except for its home office.
Alien Insurance Company
A company that is chartered and organized in any country other than the United States. It is considered
an alien company in all states.
Authorized Insurer
INSURANCE EXAM QUESTIONS AND ANSWERS WITH
COMPLETE SOLUTIONS GRADED A++
Commissioner
The Commissioner of Insurance is the chief officer of the Washington Insurance Department. This is an
elected position serving a term of 4 years. The Commissioner also makes rules and regulations to help
carry out the provisions of the Washington insurance code.
Hearing
The Commissioner may hold a hearing whenever deemed necessary. All hearings must be held or
refused within 30 days after the Commissioner receives demand. The Commissioner must give notice of
the time and place of a hearing at least 10 days in advance.
Penalties
After the hearing, the Commissioner can impose a fine of up to $1,000 for each violation upon any
person who violates the Washington insurance code.
Cease and Desist
The Commissioner can issue a cease and desist order to anyone violating the Washington insurance
code.
,Rates and Forms
All insurance policy forms, applications, riders, or endorsements must be filed with and approved by the
Commissioner before they can be used.
Insurance
is a contract in which one party (the insurer) agrees, for a consideration (premiums), to pay the other
(the insured) a specified amount upon determinable contingencies.
Insurer
is anyone in the business of making insurance contracts other than a fraternal benefit society.
Premium
is consideration or payment for insurance coverage. Premiums are sometimes called assessments, policy
fees, or service fees.
Policy
is a written contract for insurance, including all clauses, riders, endorsements, and attached papers.
Insurance Producer
An individual who in any manner sells, solicits, or negotiates insurance on behalf of insurance companies
for compensation is an insurance producer.
Assumed Names
An insurance producer doing business under any name other than the producer's legal name shall notify
the Commissioner before using the assumed name.
Commissions
,No person shall pay or accept commissions to/from an unlicensed individual for the purpose of selling or
negotiating insurance business. Renewal or deferred commissions may be paid to a person who was
properly licensed at that time of the insurance sale.
Shared Commissions
A producer may legally share commissions only with another producer who is licensed in the same line
of insurance.
Protection of Public Interest
Insurers and agents are required to act in good faith, abstain from deception, and practice honesty and
equity in all insurance matters.
Premium Accountability
An insurance producer must report to the insurer the exam amount of consideration charged as
premium and the amount shall be shown in the contract and in the records of the producer.
Fiduciary Responsibility
Because the producer handles money of the insured and insurer, he/she has a fiduciary responsibility. A
fiduciary is someone in a position of trust. Any person who is appointed, or acts as, a producer for an
insurance company in Washington and receives or collects money from any source as an agent will be
held responsible in a fiduciary capacity for those funds.
Separate Account Requirement
All funds representing premiums or return premiums received by a producer shall be accounted for and
maintained in a separate account from all other business and personal funds.
Commingling
, A producer who has combined premiums collected with personal funds has engaged in commingling,
which is a prohibited act. An insurance producer who unlawfully appropriates insurance premiums for
their own use commits a theft.
Policy Delivery
Policies must be delivered within a reasonable period after they have been issued.
Solicitation and Sales Presentations
Producers must provide applicants and prospects with the approved NAIC Buyer's Guide. Producers must
also provide a Policy Summary to applicants.
Policy Summary
contains specific information on the provisions, benefits, and coverage of the policy applied for.
Domestic Insurance Company
A company that resides and is incorporated under the laws of the state in which its home office is
located.
Foreign Insurance Company
A company whose home office is located in another state. It is considered to be a foreign company in all
states except for its home office.
Alien Insurance Company
A company that is chartered and organized in any country other than the United States. It is considered
an alien company in all states.
Authorized Insurer
