IA&B Questions and Answers
1. All of the following are requirements to be licensed in PA Except:
a. Complete a four-week pre licensing course
b. pass the appropriate exam
c. Apply for a license with the insurance dept. and pay the appropriate fee
d. Have your fingerprints taken and submitted.: a
2. All of the following statements are correct except:
a. an applicant has up to one year to be licensed after successfully passing the exam
b. the max limit for a temp license is 180 days
c. an insurance agency does not need a license if they are a corp.
d. A producer must be licensed to sell solicit or negotiate contracts of insur- ance: c
3. Which statement is false?
a. a resident producer must both live and work in PA
b. The max limit for a temp license is 180 days
c. An insurance company's license is called a certificate of authority
d. A producer must be licensed to sell, solicit, or negotiate contracts of insurance: a
4. Which time period is incorrect?
a. 30 days to report a change of address
b. 30 days to report criminal conduct of being charged
c. 60 days to reinstate a lapsed license retroactively
d. Four years to complete 24hr of continuing education: d
5. Possible insurance dept penalites for insurance law violations include all the following except
a. fines
b. revoking of a license
c. insurance requirements of CE hours
d. Issuance of an order to cease and desist: c
6. All of the following are general duties and powers of the insurance commis- sioner except
a. Prosecute the ind. in a court of law
b. Collect fees
c. Investigate complaints
d. Regulate rates: a
7. Rate regulatory law requires rates to be all of the following except
, IA&B Questions and Answers
a. Not excessive
b. Equal for all policy holders
, IA&B Questions and Answers
c. Adequate
d. Not unfairly discriminatory: b
8. The Johnsons Insure their 200k home for 200k under an HO-3. When their home, auto, and detached garage
are destroyed in a fire the damages are as follows: Home: 200k, Detached Garage: 15k, Car: 12k, Personal
Property: 85k, additional living expenses: 35k. Disregarding deductible, how much will their company pay?:
335k, the auto is excluded, they did not exceed the garage limit (20k) or the personal property limit (100k) or the living
expenses limit (60k)
9. Which homeowners form should a condominium owner purchase?: HO-2
10.What action might be taken by an insurance company if a building has been vacant for more than 60
Days?: Coverage will likely be cancelled.
11.In a Commercial Package Policy which includes Commercial Property Coverage, What is excluded?:
Falling Objects (Broad Form Peril)
12.Which Commercial GL coverage will pay without regard to negligence?: -
Medical Payments
13.Standard amount of coverage a - dwelling provided by the HO-6 unit owners policy?: 1k (higher
limits are available but must be requested)
14.Business Auto Policy, what coverage can replace Other Than Collision coverage at the discretion of the
policy owner?: Specified Causes of Loss coverage - (Named Peril)
15.What is a DP-2 policy?: A property insurance that covers rental properties for 18 named perils
16.In the event of that the building and business personal property coverage is continued after vacancy, which
peril is still covered?: Riot (Vandalism, theft, and water damage are lost)
17. What is another way of describing the structure of a mutual insurance com- pany?: Participating (can
pay dividends to policy owners); Stock = non-participating
18.Businessowners policy covers loss of income for up to:: 12 months follow- ing the direct physical loss.
19.The limits of liability are found in which part of a Casualty policy?: Decla- rations
20.With regard to property insurance, consideration is the: Payment of premi- um by the insured in return for the
promise to pay covered claims
21.How transportation expenses coverage on a personal auto policy will respond when an insured rents a
car while on vacation and the vehicle is subject to a total loss event?: There is a 48 hour waiting period
22.Boat injures a swimmer at the lake. The homeowners policy:: Will pay for the injuries if Jackie's sailboat is less
than 26 ft in length (or less than 25hp)
, IA&B Questions and Answers
23.Car taken to local garage for brake install. After work is done, test-drive done by garage mechanic. Crash
occurs, what coverage is primary?: The repair shops garage keepers liability policy
24.Insurance term refers to continuous or repeated exposure to conditions that may result in bodily injury or
property damage which is neither expected nor intended?: An occurrence
25.How is an insurance binder best described?: Temp, short-term evidence of coverage.
26.Med Pay claim submittal timeframe limit: 1. Personal lines - 3 years
2. Commercial lines - 1 year
27.Building has a replacement cost value of 100k. He insures the building for 70k using the standard deductible.
The building sustains a covered loss valued at 8k ACV and at 12k replacement cost. How much does Daves
compa- ny pay?: 11k - Dave did not insure the building for 80% of its replacement cost. Therefore, his loss will be paid
on an ACV basiss. Sandard deductible is $500. Therefore 8k-$500 = 7.5k
28.Are BOPS written without a coinsurance requirement?: Yes
29.What is Part A of a personal auto policy?: Liability Coverage
30.What is Part B of a personal auto policy?: Medical Payments Coverage
31.What is Part C of a personal auto policy?: Un/underinsured motorist coverage
32.What is Part D of a personal auto policy?: Physical Damage Coverage
33.What is the calculation basis for coverage B - Business Personal Property under the business owner's policy?
a. replacement cost
b. functional equivalent
c. actual cash value
d. Agreed amount: A. Replacement Cost
34.How does the policyowner of a BOP assure that losses will be settled on a Replacement Cost basis?
a.) by purchasing a Replacement Cost endorsement
b.) by accepting an 80% coinsurance requirement
c.) by maintaining insurance of at least 80% of the Replacement Cost
d.) by purchasing the special form BOP: C.) By maintaining insurance of at least 80% of the Replacement Cost.
Reasoning: The BOP has no coinsurance requirement. It encourages policy owners to insure to value in the same way tha
homeowners do. if the coverage is at least 80% of the Replacement Cost, both buildings and business personal property
losses
1. All of the following are requirements to be licensed in PA Except:
a. Complete a four-week pre licensing course
b. pass the appropriate exam
c. Apply for a license with the insurance dept. and pay the appropriate fee
d. Have your fingerprints taken and submitted.: a
2. All of the following statements are correct except:
a. an applicant has up to one year to be licensed after successfully passing the exam
b. the max limit for a temp license is 180 days
c. an insurance agency does not need a license if they are a corp.
d. A producer must be licensed to sell solicit or negotiate contracts of insur- ance: c
3. Which statement is false?
a. a resident producer must both live and work in PA
b. The max limit for a temp license is 180 days
c. An insurance company's license is called a certificate of authority
d. A producer must be licensed to sell, solicit, or negotiate contracts of insurance: a
4. Which time period is incorrect?
a. 30 days to report a change of address
b. 30 days to report criminal conduct of being charged
c. 60 days to reinstate a lapsed license retroactively
d. Four years to complete 24hr of continuing education: d
5. Possible insurance dept penalites for insurance law violations include all the following except
a. fines
b. revoking of a license
c. insurance requirements of CE hours
d. Issuance of an order to cease and desist: c
6. All of the following are general duties and powers of the insurance commis- sioner except
a. Prosecute the ind. in a court of law
b. Collect fees
c. Investigate complaints
d. Regulate rates: a
7. Rate regulatory law requires rates to be all of the following except
, IA&B Questions and Answers
a. Not excessive
b. Equal for all policy holders
, IA&B Questions and Answers
c. Adequate
d. Not unfairly discriminatory: b
8. The Johnsons Insure their 200k home for 200k under an HO-3. When their home, auto, and detached garage
are destroyed in a fire the damages are as follows: Home: 200k, Detached Garage: 15k, Car: 12k, Personal
Property: 85k, additional living expenses: 35k. Disregarding deductible, how much will their company pay?:
335k, the auto is excluded, they did not exceed the garage limit (20k) or the personal property limit (100k) or the living
expenses limit (60k)
9. Which homeowners form should a condominium owner purchase?: HO-2
10.What action might be taken by an insurance company if a building has been vacant for more than 60
Days?: Coverage will likely be cancelled.
11.In a Commercial Package Policy which includes Commercial Property Coverage, What is excluded?:
Falling Objects (Broad Form Peril)
12.Which Commercial GL coverage will pay without regard to negligence?: -
Medical Payments
13.Standard amount of coverage a - dwelling provided by the HO-6 unit owners policy?: 1k (higher
limits are available but must be requested)
14.Business Auto Policy, what coverage can replace Other Than Collision coverage at the discretion of the
policy owner?: Specified Causes of Loss coverage - (Named Peril)
15.What is a DP-2 policy?: A property insurance that covers rental properties for 18 named perils
16.In the event of that the building and business personal property coverage is continued after vacancy, which
peril is still covered?: Riot (Vandalism, theft, and water damage are lost)
17. What is another way of describing the structure of a mutual insurance com- pany?: Participating (can
pay dividends to policy owners); Stock = non-participating
18.Businessowners policy covers loss of income for up to:: 12 months follow- ing the direct physical loss.
19.The limits of liability are found in which part of a Casualty policy?: Decla- rations
20.With regard to property insurance, consideration is the: Payment of premi- um by the insured in return for the
promise to pay covered claims
21.How transportation expenses coverage on a personal auto policy will respond when an insured rents a
car while on vacation and the vehicle is subject to a total loss event?: There is a 48 hour waiting period
22.Boat injures a swimmer at the lake. The homeowners policy:: Will pay for the injuries if Jackie's sailboat is less
than 26 ft in length (or less than 25hp)
, IA&B Questions and Answers
23.Car taken to local garage for brake install. After work is done, test-drive done by garage mechanic. Crash
occurs, what coverage is primary?: The repair shops garage keepers liability policy
24.Insurance term refers to continuous or repeated exposure to conditions that may result in bodily injury or
property damage which is neither expected nor intended?: An occurrence
25.How is an insurance binder best described?: Temp, short-term evidence of coverage.
26.Med Pay claim submittal timeframe limit: 1. Personal lines - 3 years
2. Commercial lines - 1 year
27.Building has a replacement cost value of 100k. He insures the building for 70k using the standard deductible.
The building sustains a covered loss valued at 8k ACV and at 12k replacement cost. How much does Daves
compa- ny pay?: 11k - Dave did not insure the building for 80% of its replacement cost. Therefore, his loss will be paid
on an ACV basiss. Sandard deductible is $500. Therefore 8k-$500 = 7.5k
28.Are BOPS written without a coinsurance requirement?: Yes
29.What is Part A of a personal auto policy?: Liability Coverage
30.What is Part B of a personal auto policy?: Medical Payments Coverage
31.What is Part C of a personal auto policy?: Un/underinsured motorist coverage
32.What is Part D of a personal auto policy?: Physical Damage Coverage
33.What is the calculation basis for coverage B - Business Personal Property under the business owner's policy?
a. replacement cost
b. functional equivalent
c. actual cash value
d. Agreed amount: A. Replacement Cost
34.How does the policyowner of a BOP assure that losses will be settled on a Replacement Cost basis?
a.) by purchasing a Replacement Cost endorsement
b.) by accepting an 80% coinsurance requirement
c.) by maintaining insurance of at least 80% of the Replacement Cost
d.) by purchasing the special form BOP: C.) By maintaining insurance of at least 80% of the Replacement Cost.
Reasoning: The BOP has no coinsurance requirement. It encourages policy owners to insure to value in the same way tha
homeowners do. if the coverage is at least 80% of the Replacement Cost, both buildings and business personal property
losses
