NJ Property/ Casualty Insurance Exam Set
ACTUAL QUESTIONS AND CORRECT
ANSWERS
Why was the commercial Insurance Deregulation Act Created? - CORRECT
ANSWERS✅✅To protect the public from the adverse effects of excessive, inadequate, &
unfair discriminatory rates & marketing practices
Which policies issued must follow the provisions of the Commercial Insurance Deregulation
Act? - CORRECT ANSWERS✅✅Commercial policies
When must rate amendments & policy forms be filed with the commissioner? - CORRECT
ANSWERS✅✅30 days before
What losses are excluded from flood insurance? - CORRECT ANSWERS✅✅-Landslides
-Sewer backup
-Windblown Rain
-Snow
-Sleet
Who administers the NFIP? - CORRECT ANSWERS✅✅Federal Insurance Administration
(FIA)
What does the NFIP stand for? - CORRECT ANSWERS✅✅National Flood Insurance
Program
Why was the National Flood insurance Program constructed? - CORRECT
ANSWERS✅✅to fill in gaps of flood coverage by the private sector
What are the 3 NFIP requirements for coverage? - CORRECT ANSWERS✅✅-community
land management & flood control programs must reduce flood losses in the future
,-Flood insurance required in specific flood prone areas as a condition for receiving loans
through/ backed by the federal government
-Property owners that fail to purchase flood insurance within 1 year after it is available will
not be eligible for full disaster relief funding. It will be reduced by an amount of insurance
that could have been purchased
What is the NFIP max coverage for a single family? - CORRECT ANSWERS✅✅Building
$250K, Contents $100K
What is the NFIP max coverage for other residential? - CORRECT ANSWERS✅✅Building
$250K, Contents $100K
What is the NFIP max coverage for small business? - CORRECT ANSWERS✅✅Building
$500K, Contents $500K
What is the NFIP max coverage for Other Non-Residential? - CORRECT
ANSWERS✅✅Building $500k, Contents $500K
What is the NFIP subsidized rate for a single family? - CORRECT ANSWERS✅✅Building
$35K, Contents $10K
What is the NFIP subsidized rate for Other Residential? - CORRECT
ANSWERS✅✅Building $100K , Contents $100K
What is the NFIP subsidized rate for small businesses? - CORRECT
ANSWERS✅✅Building $100K, Contents $100K
What is the NFIP subsidized rate for other non-residential? - CORRECT
ANSWERS✅✅Building $100K, Contents $100K
What is the wait period before flood insurance can be effective? - CORRECT
ANSWERS✅✅30 days, no binders issued
,What are the exceptions to the 30 day NFIP wait period? - CORRECT ANSWERS✅✅-1st
30 days after coverage, community enters standard or emergency program, coverage will
begin at 12:01 am the date after application and premium were mailed
-When an existing policy was assigned to a property purchaser
-At 12:01 am on the 5th day after an endorsement request & premium has been mailed for
existing policy
What was the Supreme Court's decision regarding the Paul v. Virginia case? - CORRECT
ANSWERS✅✅insurance was NOT interstate commerce and could not be regulated by the
federal govt.
Who heard the Paul v. Virginia case? - CORRECT ANSWERS✅✅Supreme Court
Who heard the US v Southeastern Underwriting Association case? - CORRECT
ANSWERS✅✅Supreme Court
What was the decision in the US v Southeastern Underwriting Association Case? -
CORRECT ANSWERS✅✅Insurance is interstate commerce and should be subject to
federal regulations (currently in effect today)
What is the McCarran-Ferguson Act? - CORRECT ANSWERS✅✅The federal govt won't
regulate insurance business as long as states perform an adequate job of managing their own
insurance industries.
When was the McCarran-Ferguson Act passed? - CORRECT ANSWERS✅✅March 9, 1945
To whom does the insurance commissioner have to provide a report? - CORRECT
ANSWERS✅✅Governor & Legislature
How often must the insurance Commissioner provide a report? - CORRECT
ANSWERS✅✅Annually
How long before a disciplinary hearing must the insurance commissioner notify interested
parties? - CORRECT ANSWERS✅✅10 days before
, What is the fine for failing to comply with a court-ordered subpoena? - CORRECT
ANSWERS✅✅$5000
If the commissioner decides one has violated the insurance code, what is the fine for
unintentional acts performed? - CORRECT ANSWERS✅✅$1000
If the commissioner decides one has violated the insurance code, what is the max fine? -
CORRECT ANSWERS✅✅1st offense: $5K, 2nd offense $10K, each additional $15K
If the insurance commissioner decides one has violated the insurance code, what is the fine
for violating a cease & desist? - CORRECT ANSWERS✅✅$5k each violation
If the insurance commissioner decides one has violated the insurance code, what is the fine
for unlawful acts with intentional & material thought? - CORRECT ANSWERS✅✅$5k
What is the fine for not contacting the dept with an address or name change within 30 days? -
CORRECT ANSWERS✅✅$250 max if over 60 days
What is the fine for if a license fee check is returned for insufficient funds? - CORRECT
ANSWERS✅✅$500
What is the fine for if you do not contact the department regarding a change in partners,
owners, officers, or directors? - CORRECT ANSWERS✅✅$250
What is the fine for not returning a license to a producer? - CORRECT ANSWERS✅✅$500
What is the fine for not maintaining an office address or employment contracts on file with
the department? - CORRECT ANSWERS✅✅$100 for each contract
What document is required before an insurance company may transact business in a state? -
CORRECT ANSWERS✅✅Certificate of Authority
ACTUAL QUESTIONS AND CORRECT
ANSWERS
Why was the commercial Insurance Deregulation Act Created? - CORRECT
ANSWERS✅✅To protect the public from the adverse effects of excessive, inadequate, &
unfair discriminatory rates & marketing practices
Which policies issued must follow the provisions of the Commercial Insurance Deregulation
Act? - CORRECT ANSWERS✅✅Commercial policies
When must rate amendments & policy forms be filed with the commissioner? - CORRECT
ANSWERS✅✅30 days before
What losses are excluded from flood insurance? - CORRECT ANSWERS✅✅-Landslides
-Sewer backup
-Windblown Rain
-Snow
-Sleet
Who administers the NFIP? - CORRECT ANSWERS✅✅Federal Insurance Administration
(FIA)
What does the NFIP stand for? - CORRECT ANSWERS✅✅National Flood Insurance
Program
Why was the National Flood insurance Program constructed? - CORRECT
ANSWERS✅✅to fill in gaps of flood coverage by the private sector
What are the 3 NFIP requirements for coverage? - CORRECT ANSWERS✅✅-community
land management & flood control programs must reduce flood losses in the future
,-Flood insurance required in specific flood prone areas as a condition for receiving loans
through/ backed by the federal government
-Property owners that fail to purchase flood insurance within 1 year after it is available will
not be eligible for full disaster relief funding. It will be reduced by an amount of insurance
that could have been purchased
What is the NFIP max coverage for a single family? - CORRECT ANSWERS✅✅Building
$250K, Contents $100K
What is the NFIP max coverage for other residential? - CORRECT ANSWERS✅✅Building
$250K, Contents $100K
What is the NFIP max coverage for small business? - CORRECT ANSWERS✅✅Building
$500K, Contents $500K
What is the NFIP max coverage for Other Non-Residential? - CORRECT
ANSWERS✅✅Building $500k, Contents $500K
What is the NFIP subsidized rate for a single family? - CORRECT ANSWERS✅✅Building
$35K, Contents $10K
What is the NFIP subsidized rate for Other Residential? - CORRECT
ANSWERS✅✅Building $100K , Contents $100K
What is the NFIP subsidized rate for small businesses? - CORRECT
ANSWERS✅✅Building $100K, Contents $100K
What is the NFIP subsidized rate for other non-residential? - CORRECT
ANSWERS✅✅Building $100K, Contents $100K
What is the wait period before flood insurance can be effective? - CORRECT
ANSWERS✅✅30 days, no binders issued
,What are the exceptions to the 30 day NFIP wait period? - CORRECT ANSWERS✅✅-1st
30 days after coverage, community enters standard or emergency program, coverage will
begin at 12:01 am the date after application and premium were mailed
-When an existing policy was assigned to a property purchaser
-At 12:01 am on the 5th day after an endorsement request & premium has been mailed for
existing policy
What was the Supreme Court's decision regarding the Paul v. Virginia case? - CORRECT
ANSWERS✅✅insurance was NOT interstate commerce and could not be regulated by the
federal govt.
Who heard the Paul v. Virginia case? - CORRECT ANSWERS✅✅Supreme Court
Who heard the US v Southeastern Underwriting Association case? - CORRECT
ANSWERS✅✅Supreme Court
What was the decision in the US v Southeastern Underwriting Association Case? -
CORRECT ANSWERS✅✅Insurance is interstate commerce and should be subject to
federal regulations (currently in effect today)
What is the McCarran-Ferguson Act? - CORRECT ANSWERS✅✅The federal govt won't
regulate insurance business as long as states perform an adequate job of managing their own
insurance industries.
When was the McCarran-Ferguson Act passed? - CORRECT ANSWERS✅✅March 9, 1945
To whom does the insurance commissioner have to provide a report? - CORRECT
ANSWERS✅✅Governor & Legislature
How often must the insurance Commissioner provide a report? - CORRECT
ANSWERS✅✅Annually
How long before a disciplinary hearing must the insurance commissioner notify interested
parties? - CORRECT ANSWERS✅✅10 days before
, What is the fine for failing to comply with a court-ordered subpoena? - CORRECT
ANSWERS✅✅$5000
If the commissioner decides one has violated the insurance code, what is the fine for
unintentional acts performed? - CORRECT ANSWERS✅✅$1000
If the commissioner decides one has violated the insurance code, what is the max fine? -
CORRECT ANSWERS✅✅1st offense: $5K, 2nd offense $10K, each additional $15K
If the insurance commissioner decides one has violated the insurance code, what is the fine
for violating a cease & desist? - CORRECT ANSWERS✅✅$5k each violation
If the insurance commissioner decides one has violated the insurance code, what is the fine
for unlawful acts with intentional & material thought? - CORRECT ANSWERS✅✅$5k
What is the fine for not contacting the dept with an address or name change within 30 days? -
CORRECT ANSWERS✅✅$250 max if over 60 days
What is the fine for if a license fee check is returned for insufficient funds? - CORRECT
ANSWERS✅✅$500
What is the fine for if you do not contact the department regarding a change in partners,
owners, officers, or directors? - CORRECT ANSWERS✅✅$250
What is the fine for not returning a license to a producer? - CORRECT ANSWERS✅✅$500
What is the fine for not maintaining an office address or employment contracts on file with
the department? - CORRECT ANSWERS✅✅$100 for each contract
What document is required before an insurance company may transact business in a state? -
CORRECT ANSWERS✅✅Certificate of Authority
