MICHIGAN SURPLUS LINES STUDY GUIDE 2025/2026
QUESTIONS AND ANSWERS GUARANTEE A+
✔✔Proximate cause is which of the following? - ✔✔B) an unbroken chain of events that
caused the loss
✔✔Which of the following are perils? - ✔✔A) Hurricane, hail and smoke
✔✔Policies pay for which of the following? - ✔✔A) Perils
✔✔Premium calculations are based on: - ✔✔C) the underwriters determination on the
amount of risk
✔✔A direct loss is which of the following? - ✔✔D) A reduction in value to the item itself
✔✔How many years is a license required of most licensees? - ✔✔C) for as long as they
are in the business of insurance
✔✔How many surplus lines licenses can one person hold? - ✔✔C) One per person per
type of license
✔✔Which of the following best describes a purchasing group? - ✔✔A) Similar
businesses whose purpose is to purchase insurance for the members
✔✔In order for someone to get a non-resident license, which of the following is true? -
✔✔C) They have to be licensed in their home state and meet their home state's
continuing education requirements
✔✔All of the following are unfair claims settlement practices EXCEPT: - ✔✔B) adopting
reasonable standard for the prompt investigation of claims arising under the insurer's
policies
✔✔What type of regulation does a Surplus Lines company get from the Texas
Department of Insurance? - ✔✔A) as an unauthorized carrier it is not subject to
regulation
✔✔Which of the following does not require a license? - ✔✔C) the customer who buys all
of their insurance from an exclusive agent
✔✔If a cease and desist order is issued, which of the following is true? - ✔✔A) it must
be sent by certified mail by the Texas Department of Insurance
✔✔Written exams are required of all of the following EXCEPT: - ✔✔A) Temporary or
Emergency licenses
, ✔✔Which of the following is true about insurance companies? - ✔✔B) they can be stock
or mutual and can be foreign or alien
✔✔John was convicted of a felony when he got involved in a money laundering
scheme. Which of the following can happen to John? - ✔✔B) his license can be revoked
after a hearing
✔✔Licenses can be renewed on which of the following time frames? - ✔✔D) every two
years after a 90 day notice of renewal
✔✔The Stamping Office board of directors is appointed by which of the following? -
✔✔B) appointed by the Insurance Commissioner
✔✔All of the following are true about surplus lines insurance carriers EXCEPT: - ✔✔D)
must submit to financial examinations every year and pay for the examination
✔✔If a surplus lines insurance company wanted to be fined, which of the following must
it do? - ✔✔B) it will allow unlicensed surplus lines agents to represent it
✔✔Surplus lines agents must pay the stamping fees to the stamping office by which of
the following? - ✔✔B) Monthly
✔✔A surplus lines agent can perform all of the following acts except: - ✔✔A)
Commingle Funds
✔✔Making any statement, or distributing literature, which is false, or maliciously critical
of or derogatory to the financial condition of an insurer and which is intended to injure
any person engaged in the insurance business, is an illegal practice known as: - ✔✔A)
Defamation
✔✔Which of the following is responsible for supplying a list of surplus lines companies
to a requestor? - ✔✔C) The insurance commissioner through the Texas department of
Insurance office
✔✔If an agent shares commission with an insurance buyer which of the following
definitions apply? - ✔✔D) Rebating
✔✔If a fraudulent auto claim was turned in by an insured, the company can do all of the
following EXCEPT: - ✔✔Pay the claim and then terminate the insured at renewal
✔✔The insurance commissioner can do all of the following EXCEPT: - ✔✔C) Issue
commissions to an agent
QUESTIONS AND ANSWERS GUARANTEE A+
✔✔Proximate cause is which of the following? - ✔✔B) an unbroken chain of events that
caused the loss
✔✔Which of the following are perils? - ✔✔A) Hurricane, hail and smoke
✔✔Policies pay for which of the following? - ✔✔A) Perils
✔✔Premium calculations are based on: - ✔✔C) the underwriters determination on the
amount of risk
✔✔A direct loss is which of the following? - ✔✔D) A reduction in value to the item itself
✔✔How many years is a license required of most licensees? - ✔✔C) for as long as they
are in the business of insurance
✔✔How many surplus lines licenses can one person hold? - ✔✔C) One per person per
type of license
✔✔Which of the following best describes a purchasing group? - ✔✔A) Similar
businesses whose purpose is to purchase insurance for the members
✔✔In order for someone to get a non-resident license, which of the following is true? -
✔✔C) They have to be licensed in their home state and meet their home state's
continuing education requirements
✔✔All of the following are unfair claims settlement practices EXCEPT: - ✔✔B) adopting
reasonable standard for the prompt investigation of claims arising under the insurer's
policies
✔✔What type of regulation does a Surplus Lines company get from the Texas
Department of Insurance? - ✔✔A) as an unauthorized carrier it is not subject to
regulation
✔✔Which of the following does not require a license? - ✔✔C) the customer who buys all
of their insurance from an exclusive agent
✔✔If a cease and desist order is issued, which of the following is true? - ✔✔A) it must
be sent by certified mail by the Texas Department of Insurance
✔✔Written exams are required of all of the following EXCEPT: - ✔✔A) Temporary or
Emergency licenses
, ✔✔Which of the following is true about insurance companies? - ✔✔B) they can be stock
or mutual and can be foreign or alien
✔✔John was convicted of a felony when he got involved in a money laundering
scheme. Which of the following can happen to John? - ✔✔B) his license can be revoked
after a hearing
✔✔Licenses can be renewed on which of the following time frames? - ✔✔D) every two
years after a 90 day notice of renewal
✔✔The Stamping Office board of directors is appointed by which of the following? -
✔✔B) appointed by the Insurance Commissioner
✔✔All of the following are true about surplus lines insurance carriers EXCEPT: - ✔✔D)
must submit to financial examinations every year and pay for the examination
✔✔If a surplus lines insurance company wanted to be fined, which of the following must
it do? - ✔✔B) it will allow unlicensed surplus lines agents to represent it
✔✔Surplus lines agents must pay the stamping fees to the stamping office by which of
the following? - ✔✔B) Monthly
✔✔A surplus lines agent can perform all of the following acts except: - ✔✔A)
Commingle Funds
✔✔Making any statement, or distributing literature, which is false, or maliciously critical
of or derogatory to the financial condition of an insurer and which is intended to injure
any person engaged in the insurance business, is an illegal practice known as: - ✔✔A)
Defamation
✔✔Which of the following is responsible for supplying a list of surplus lines companies
to a requestor? - ✔✔C) The insurance commissioner through the Texas department of
Insurance office
✔✔If an agent shares commission with an insurance buyer which of the following
definitions apply? - ✔✔D) Rebating
✔✔If a fraudulent auto claim was turned in by an insured, the company can do all of the
following EXCEPT: - ✔✔Pay the claim and then terminate the insured at renewal
✔✔The insurance commissioner can do all of the following EXCEPT: - ✔✔C) Issue
commissions to an agent
