MPCP - Minnesota Property and Casualty Producer Exam

Question 21: Before ordering a report from an outside agency about an applicant for commercial liability coverage, a producer must follow a federal statute governing consumer information used in the underwriting process. Which of the following federal laws imposes that requirement on insurers and producers?

The Fair Credit Reporting Act

The Gramm-Leach-Bliley Act

The Terrorism Risk Insurance Act

The Employee Retirement Income Security Act

Question 22: An adult signs up for a recreational hockey league, knowing that hard body checks and flying pucks are part of the game, and is injured during a league match. Which defense against a negligence claim fits these facts most closely?

Res ipsa loquitur

Assumption of risk

Comparative negligence between the players

Intervening cause during the match

Question 23: A workers compensation policy is written for a roofing contractor, and at the start of the policy period the insurer collects an amount based on the employer's estimated payroll for the coming year. Which of the following names that amount?

Earned premium

Experience modification factor

Deposit premium

Retrospective premium

Question 24: A property manager receives a certificate showing a vendor's liability limits and assumes the certificate itself extends coverage to the property manager as an additional insured. Which of the following correctly describes the actual legal effect of the certificate?

It adds the manager as an insured

It replaces the vendor's policy conditions

It guarantees the limits cannot change

It only evidences coverage, granting nothing

Question 25: A landscaping firm is bound for commercial liability coverage while the underwriter reviews the account. A customer is injured on Wednesday, and on Friday the insurer declines to issue the policy. Which of the following describes the coverage position for that injury?

The binder covers the loss despite declination

No coverage, because no policy was issued

Coverage applies only if premium was paid

Coverage is limited to first aid expenses

Question 26: After a warehouse forklift injures a delivery driver, the driver asks the warehouse's liability insurer for a settlement well above his documented medical costs and wage loss so that he comes out ahead financially. On what ground does the insurer resist that demand?

The contract is personal and nontransferable

Liability policies pay only the named insured

Insurance indemnifies rather than creating profit

The claimant lacks an insurable interest

Question 27: A pizza shop employee runs a stop sign while making a delivery and injures another motorist. The injured motorist sues the shop owner, whose only connection to the crash is control over the employee. Which type of liability does the owner face?

Vicarious liability

Absolute liability

Strict liability for a defective product

Assumed liability under a contract

Question 28: A general contractor demands written evidence that a subcontractor carries commercial general liability coverage before allowing work on the site. The subcontractor's producer sends a one page form verifying the coverage in force. Which of the following names that document?

Binder

Endorsement

Certificate of insurance

Application

Question 29: A guest is injured at an insured's rented property and may bring a liability claim. Before anything else, the policy directs the insured to inform the insurance company in writing, and to do so promptly. Which duty after a loss does that describe?

Give prompt written notice of the loss

Submit a sworn proof of loss

Protect the property from further damage

Assist the claimant with his own suit

Question 30: A commercial liability policy pays medical expenses for a customer injured on the insured's premises, but only up to a stated amount for any one person. A producer must explain how such a provision differs from an exclusion. Which explanation is accurate?

Both wipe out the coverage entirely

A limitation caps payment; exclusions deny coverage

A limitation removes the loss from coverage

Exclusions appear only on the declarations page

Question 31: An insured rear ends another car and reports the crash to his own company at once. The other driver's insurer then telephones him for a recorded statement. Considering the duties a liability policy actually imposes, which statement is BEST?

No duty runs to the other insurer

He must give that insurer a statement

He must notify the claimant in writing

His policy is void if he refuses

Question 32: A casualty insurer settles with its insured and asks the insured to sign a document that formally hands over the right to collect from the responsible party. Which of the following names the document normally used for that transfer?

A certificate of insurance

A release and subrogation assignment

A binder of coverage

An endorsement to the policy

Question 33: A newly written commercial policy is terminated on the very day it was to take effect, before any coverage was provided, and the entire premium is returned. Which term names a policy stopped on its effective date in that way?

Nonrenewal of the policy

Short rate cancellation

Expiration of the policy term

Flat cancellation

Question 34: A business auto insured wants to confirm exactly which vehicles the policy treats as covered autos for liability, since the choice is made by numerical symbols entered when the policy was issued. Where in the policy should the producer look?

In the exclusions

In the conditions

In the declarations

In the definitions

Question 35: A contractor's business auto coverage form responds to an accident involving a vehicle the contractor owns, and later to an accident involving a borrowed vehicle. Which of the following states how the form's other insurance condition treats each situation?

Excess for owned, primary for nonowned

Primary for owned, excess for nonowned

Pro rata for both types of auto

Equal shares for both types of auto

Question 36: A business auto insured disagrees with how his claim was handled and threatens to sue the insurer, although he has not complied with several terms the policy requires of him. Under the policy's conditions, what governs his ability to bring that suit?

He may sue at any time

Only the insurer may start suit

Compliance affects only the premium owed

He must first comply with policy terms

Question 37: A partnership buys a commercial liability policy, and the firm's full legal name is typed on the front page of the contract as the entity to which the policy is issued. Which term identifies the firm in that role?

Additional insured

Named insured

Insured by definition

Third-party claimant

Question 38: After paying its insured for damage caused by a negligent driver who carried no coverage, an insurer takes over the insured's legal right to recover from that driver. Which of the following policy conditions names that transfer of rights?

Assignment

Waiver

Subrogation

Salvage

Question 39: Two liability policies written by different companies both respond to the same bodily injury claim against a restaurant. A condition in each contract explains how reimbursement will be arranged between them. Which of the following names that policy condition?