ARPCI - Arkansas Property and Casualty Insurance

Question 21: Arkansas's trade practices law generally prohibits rebating any part of a premium or commission to induce a client to purchase insurance, but the same statute carves out a defined, limited number of exceptions to that general prohibition. Which of the following correctly states how many exceptions the rebating prohibition contains?

Two exceptions

Ten exceptions

Six exceptions

No exceptions at all

Question 22: Arkansas's rebating rules carry an exception that permits a fee arrangement with a client whose insurance business is large enough, measured by the client's total annual premium volume across all lines. At what level of annual premiums does that exception apply?

Ten thousand dollars in annual premiums

One million dollars in annual premiums

Fifty thousand dollars in annual premiums

One hundred thousand dollars in annual premiums

Question 23: An insurer wants to offer a new value-added product or service to policyholders on a trial basis before committing to it permanently, and Arkansas law allows this limited pilot program under specific time constraints. Which of the following correctly states the maximum pilot duration and the Commissioner's objection window?

One year, with a twenty-one-day objection window

Two years, with a twenty-one-day objection window

One year, with a ten-day objection window

No time limit, no objection window

Question 24: The Commissioner schedules a hearing on an alleged trade practices violation and must give the accused party advance written notice of that hearing before it may actually proceed. Which of the following correctly states the minimum notice period Arkansas law requires before that trade practices hearing may be held?

Not fewer than thirty days

Not fewer than ten days

Not fewer than five days

No minimum notice period

Question 25: An insured reports a covered property loss to the insurer by telephone, and the insurer must send some form of written or recorded acknowledgment back to the insured within a specific window measured in working days rather than calendar days. Which of the following correctly states that acknowledgment window?

Fifteen calendar days

Thirty working days

Fifteen working days

Five working days

Question 26: A frame dwelling in rural Arkansas is destroyed beyond repair. The named insured wants to know which types of loss trigger payment of the full face amount under Arkansas's Valued Policy Law rather than an actual-value settlement. Which of the following correctly identifies those triggering perils?

Fire losses only

Flood or earthquake losses

Any peril the policy lists

Fire or natural disaster losses

Question 27: In a lawsuit arising from a two-vehicle collision, Arkansas applies its modified comparative fault rule to decide whether the injured claimant may recover damages at all. Under that rule, what must be true about the claimant's own percentage of fault for recovery to be allowed?

Strictly less than the defendant's fault

Equal to or less than half

No greater than the defendant's fault

Any amount less than complete fault

Question 28: A surplus lines broker wants to place a difficult commercial risk with a non-admitted insurer. Before doing so, Arkansas law requires the broker to satisfy a particular documented standard regarding the admitted market. Which of the following correctly names that standard?

A fixed three-declination requirement

The diligent effort standard

The best-efforts placement rule

A mandatory bidding process

Question 29: An admitted insurer offers to write a risk, but its quoted gross premium is substantially higher than what a non-admitted surplus lines insurer would charge for the identical coverage. Under Arkansas's surplus lines deemed-declination rule, at what premium difference does that admitted-market offer get treated as a declination?

Ten percent or more higher

Any amount higher whatsoever

Twenty percent or more higher

Fifty percent or more higher

Question 30: A newly licensed property insurer in Arkansas asks whether joining the state's rural risk underwriting plan is optional or required. The plan also extends its membership requirement to farmers' mutual aid associations. Which of the following correctly describes participation in this plan?

Membership is optional for insurers

Only mutual insurers must join

Only insurers above a size join

Membership is mandatory for all

Question 31: An insurer decides to cancel a homeowners policy mid-term because the premium was never paid. Arkansas law sets a shorter notice period for nonpayment cancellations than for cancellations on other grounds. Which of the following correctly states both notice periods and who must receive them?

Twenty days, or ten for nonpayment

Thirty days, or fifteen for nonpayment

Ten days, or twenty for nonpayment

Twenty days regardless of the reason

Question 32: An insurer decides not to renew a homeowners policy at the end of its term rather than cancelling it mid-term. Which of the following correctly states the minimum advance notice Arkansas law requires the insurer to give the insured before a homeowners nonrenewal takes effect?

Twenty days before expiration

Thirty days before expiration

Sixty days before expiration

Ten days before expiration

Question 33: A producer researching Arkansas insurance law looks for a statute that specifically dictates the required policy form and cancellation procedure for farmowners policies, the way separate statutes exist for homeowners and automobile policies. What does the producer find regarding farmowners policies?

A statute mirroring the homeowners rule

A statute mirroring the automobile rule

No dedicated policy-form statute exists

A statute unique to farmowners forms

Question 34: A new driver in Arkansas asks an agent about the minimum amount of liability insurance the law requires before registering a vehicle. Which of the following correctly states Arkansas's compulsory minimum limits for bodily injury per person, bodily injury per accident, and property damage?

Fifteen, thirty, ten thousand dollars

Fifty, one hundred, twenty-five thousand

Twenty-five, twenty-five, fifty thousand dollars

Twenty-five, fifty, twenty-five thousand dollars

Question 35: An insurer issues a new automobile liability policy in Arkansas and does not want to include uninsured-motorist bodily injury coverage on that policy. Which of the following correctly describes what the insurer must do to lawfully exclude that coverage from the policy?

Obtain a written rejection

Obtain an oral rejection only

Simply omit it from the quote

Charge a reduced premium instead

Question 36: A producer explains to a client that Arkansas treats uninsured-motorist property damage coverage the same way it treats uninsured-motorist bodily injury coverage for purposes of offering it on a new automobile policy. Which statement correctly reflects how that coverage must be handled?

It is bundled with liability only

It must be offered too

It is unavailable in Arkansas

It requires no offer at all

Question 37: An insured wants to purchase underinsured-motorist coverage on a new Arkansas automobile policy but has already rejected uninsured-motorist coverage in writing on that same policy application. Which of the following correctly describes whether the insurer may still issue the underinsured-motorist coverage requested?

Yes, the two are unrelated

Yes, with an added premium

No, UIM requires UM first

No, UIM is never available

Question 38: Arkansas requires an automobile insurer to offer first-party medical, disability, and death benefits on every new policy, separate from any liability or uninsured-motorist coverage. Which of the following correctly describes how an insured may decline this package of first-party benefits?

By a verbal request

Automatically upon nonpayment

By declining any one benefit

Only by written rejection

Question 39: A policyholder is injured in an accident that was entirely the fault of another driver. The policyholder's own automobile policy includes medical-payments coverage. Which of the following correctly describes when Arkansas requires that medical-payments coverage to respond to the claim?

Regardless of who was at fault

Only if the insured was at fault

Only after liability is fully litigated

Only if the other driver is uninsured

Question 40: An insured accepts the first-party medical benefit offered on an Arkansas automobile policy rather than rejecting it in writing. Which of the following correctly states the maximum benefit amount per person and the time period within which covered medical expenses must be incurred?

Ten thousand dollars within twelve months

Five thousand dollars within twenty-four months

Five thousand dollars within twelve months

Two thousand dollars within twenty-four months

ARPCI Arkansas Property and Casualty Insurance - Set 1 - Part 2