Insurance MCQ

Insurance companies can use certain policy forms as long as they are filed with the Commissioner 30 days prior to use. For this reason, Wisconsin is known as a A) use and file state B) no-filing state C) prior approval state D) file and use state Answer: d

Who are the members of the Wisconsin Insurance Plan (WIP)? A) All licensed resident agents. B) All authorized insurers. C) Unauthorized foreign insurers. D) Any authorized insurer who wishes to join. Answer: b

If a surplus lines agent writes a contract for surplus line insurance, the agent must do all of the following EXCEPT: A) send a copy of the surplus lines insurance proposal to the policyholder. B) maintain records on the amounts of surplus lines insurance and the perils covered. C) make certain that the insurer has been authorized by the Commissioner as a reliable insurer. D) keep a copy of all surplus lines insurance contracts obtained. Answer: c

In an insurance transaction, an agent represents the: A) Commissioner. B) Department of Insurance. C) insured. D) insurer. Answer: d

All of the following deductibles are available under WAIP for comprehensive and collision EXCEPT: A) $250.00 B) $50.00 C) $100.00 D) $500.00 Answer: b

ABC Insurer is only able to renew the Smith's family automobile insurance policy with much less favorable terms. Since the terms are less favorable, the insurer must mail or deliver to the policyholder notice of the new terms at least how may days before the expiration date? A) 30 B) 60 C) 20 D) 10 Answer: b

Which of the following persons would be covered by workers' compensation in Wisconsin? A) A fire fighter. B) An entertainer employed on a contractual basis. C) A domestic employee. D) A paper boy. Answer: b

In Wisconsin, policy rates are use and file. Policy forms A) are use and file B) need prior approval C) don't need filing D) are file and use Answer: d

In Wisconsin, how old must an individual be in order to obtain an insurance license? A) 14 B) 18 C) 21 D) 16 Answer: b

In Wisconsin, policy forms are file and use. Policy rates A) are use and file B) don't need filing C) are file and usneed prior approval Answer: a

An applicant makes an innocent mistake on an application for homeowners insurance. The insurer issues the policy based on information supplied by the applicant. What is the insurer's responsibility to the policyholder after it discovers the incorrect information? A) The insurer is still required to fulfill the terms of the policy. B) The policy is voided, but the insurer may issue a temporary policy until the applicant completes the application process again. C) The policy is null and void. D) The policy is valid, but the agent is responsible for any loss that the policyholder tries to replace. Answer: a

In the event the insured cancels a homeowners policy, how many days' notice must she give the insurer? A) None. B) 10 days. C) 30 days. D) 60 days. Answer: a

Which one of the following persons has to show evidence of financial responsibility? A) A person who wants temporary coverage. B) A minor. C) A person whose driver's license was revoked for nonpayment of a judgment against him because of an accident. D) Drivers under 21 who did not take a drivers education class. Answer: c

Which of the following statements regarding property and casualty insurance is NOT correct? A) Oral contracts and written binders are not allowed in Wisconsin. B) Restraint of competition is illegal. C) Restricting the choice of insurers is illegal. D) Extra charges are not allowed in Wisconsin. Answer: a

Rebating is an example of: A) unfair discrimination. B) intimidation. C) unfair inducement. D) twisting. Answer: c

For purposes of workers compensation, an employer is defined as all of the following EXCEPT: A) a contractor who elects to become an employer under the act. B) an employer who pays over $500 in wages per quarter and has less than three employees. C) a political municipality. D) a farmer who employs three workers. Answer: d

Jim Smith knowingly and willfully obtained personal information about an individual from an insurer under false pretenses, and because of this violation, he may be fined up to A) $25,000 or imprisoned for up to 9 months, or both. B) $10,000 or imprisoned for up to 3 months, or both. C) $50,000 or imprisoned for up to 12 months, or both. D) $100,000 or imprisoned for up to 9 months, or both. Answer: a

Which of the following is NOT a reason an insurer can cancel an automobile policy before the term expires? A) The premiums are not paid. B) The insured committed fraud. C) The terminating age for coverage has been reached. D) Its contract with the agent has ended. Answer: d

In Wisconsin, initial premium rates and rate changes for property and casualty insurance must be filed with the office of the Commissioner 30 days after they become effective. For the reason, Wisconsin is known as a A) use and file state. B) file and use state. C) no-filing state. D) prior approval state. Answer: a

Form SR-22 is used for what purpose? A) To certify to the Motor Vehicle Department that a driver has insurance coverage that at least meets the minimum limits required. B) To prove that an employer has a worker's compensation policy. C) To file a claim under worker's compensation. D) To submit for coverage under the WIP. Answer: a