NMPCIP - New Mexico Property and Casualty Insurance Producer

Question 21: During a storm, a ship's captain orders part of the cargo jettisoned to save the vessel and remaining cargo from a total loss. Maritime principle requires that this loss be shared proportionally among the vessel owner and cargo owners whose property was saved. Which ocean marine principle describes this arrangement?

particular average

implied warranty of seaworthiness

general average

protection and indemnity

Question 22: A claim arises under a coverage that the umbrella policy insures but for which the insured carries no underlying policy. Because no primary insurance stands beneath the umbrella for this exposure, the umbrella steps down to respond as primary coverage once any retention is satisfied. What is this feature called?

follow-form coverage

excess-only coverage

quota share coverage

drop-down coverage

Question 23: Shareholders of a corporation file suit against the board members personally, alleging that the directors breached their fiduciary duties in approving a merger that ultimately harmed the company's value. Which coverage is designed to protect the personal assets of corporate directors and officers against such allegations of wrongful management decisions?

directors and officers coverage

employment practices coverage

errors and omissions coverage

fidelity bond coverage

Question 24: A newly resurfaced highway passes final inspection and is accepted by the state transportation agency, yet the agency still wants protection against defective workmanship or materials that might surface after the project is finished. Which bond provides this post-completion protection for a stated period?

a bid bond

a maintenance bond

a payment bond

a public official bond

Question 25: A warehouse employee suffers a permanent injury that prevents him from ever lifting heavy loads again, so he needs retraining for a different type of position within the same general industry. Which category of workers compensation benefits funds this kind of vocational retraining?

disability income benefits

medical benefits

rehabilitation benefits

death benefits

Question 26: A factory worker injured on the job accepts medical care and wage replacement benefits through the workers compensation system rather than filing a negligence lawsuit against the employer in civil court. Which principle generally bars that worker from also suing the employer for the same injury?

the doctrine of comparative negligence

the doctrine of assumption of risk

the collateral source rule

the exclusive remedy doctrine

Question 27: A retail store keeps cash receipts in an on-site safe overnight, and a fire destroys the currency along with several negotiable bonds stored in that same safe. The crime policy section covering physical loss or destruction of currency, coins, and negotiable instruments is best described as which coverage?

money and securities coverage

employee dishonesty coverage

forgery or alteration coverage

a fiduciary bond

Question 28: An examinee is asked to contrast a three-party suretyship arrangement with a conventional two-party insurance contract, focusing on the surety's right to recover any amount it pays out on the principal's behalf after a default. Which statement correctly describes this key distinction between surety bonds and insurance?

the insurer expects reimbursement from the insured

the surety expects reimbursement from the principal

the surety assumes the loss permanently

the obligee indemnifies the surety fully

Question 29: A retailer's customer database is hacked, exposing thousands of credit card numbers, and the retailer faces costs for notifying affected customers, providing credit monitoring, and defending resulting regulatory investigations. Which coverage is specifically designed to address the first-party and third-party costs arising from this kind of data breach?

commercial crime coverage

directors and officers coverage

cyber liability coverage

general liability coverage

Question 30: An injured worker's spouse sues the employer directly for loss of companionship after a workplace accident, a claim that falls outside the statutory benefit schedule the law requires. Which part of the workers compensation and employers liability policy responds to that kind of third party suit against the employer?

Part One statutory benefits coverage

Part Three other states insurance

a separate general liability policy

Part Two employers liability coverage

Question 31: A homeowner carries a personal umbrella policy above her homeowners and auto liability limits, and a severe liability judgment exceeds those underlying limits after a serious accident at her home. Which of the following best describes how the umbrella policy responds once the underlying limits are exhausted?

it pays excess liability limits

it pays only first party losses

it replaces the underlying policies entirely

it pays before any underlying limit

Question 32: A homeowner with a flood insurance policy through the National Flood Insurance Program suffers water damage to finished walls and a home entertainment system in the basement, along with damage to the building's foundation. Which statement reflects how the policy treats damage to finished basement improvements and property stored there?

basement finishes and contents are fully covered

basement finishes and contents are largely excluded

only basement contents receive full payment

basement damage triggers a separate policy

Question 33: A large corporation buys an umbrella policy that also covers certain claims not insured by any underlying policy, and for those claims the corporation must first pay a stated dollar amount out of its own funds before the umbrella responds at all. What is this out-of-pocket amount called?

a deductible credit

an aggregate limit

a self-insured retention

a coinsurance penalty

Question 34: A sole proprietor who works alongside a few employees is generally not automatically counted as an employee under the workers compensation law, yet she wants statutory benefits available if she is hurt on the job. Which of the following must she typically do to obtain that coverage for herself?

wait for automatic statutory coverage

purchase a separate umbrella policy

rely on her employees' coverage

affirmatively elect to be included

Question 35: A community joins the National Flood Insurance Program before completing an engineering study of its flood hazard areas, allowing residents only limited coverage at subsidized rates. Once the community adopts floodplain management measures and a flood insurance rate map, higher coverage limits become available. Which two phases does this describe?

the emergency program to the regular program

the regular program to the emergency program

standard form versus write your own form

the waiting period to the effective date

Question 36: An employer with a poor safety record and high past losses cannot find any private insurer willing to voluntarily write its workers compensation coverage, so the employer must obtain coverage through a mechanism that guarantees availability regardless of that record. Which of the following names this mechanism?

a monopolistic state fund

the assigned risk plan

the experience modification factor

a reciprocal insurance exchange

Question 37: An employer switches crime insurers and later uncovers an embezzlement scheme that its bookkeeper actually began under the prior policy but that was not discovered until after the new policy took effect. Which policy trigger determines coverage based on when the dishonest act occurred rather than when it was discovered?

discovery form

occurrence form

loss sustained form

claims-made form

Question 38: A collector owns a valuable diamond ring worth far more than the modest sublimit her homeowners policy places on jewelry, and she wants coverage on an agreed value basis that travels with the ring wherever she takes it. Which of the following is designed to provide this broader protection?

the homeowners policy alone

a mobile home endorsement

an identity theft policy

a scheduled jewelry floater

Question 39: A homeowner purchases a flood insurance policy through a private insurance company's local agent, yet the policy is actually backed by the federal flood program, with the private insurer issuing the policy and adjusting claims under its own name. Which arrangement does this describe?

the Write Your Own program

a difference in conditions policy

a surplus lines placement

a reciprocal exchange arrangement

Question 40: A hacker gains unauthorized access to a company's computer system and electronically instructs the bank to transfer funds from the company's account to an account the hacker controls, with no employee knowingly authorizing that transfer. Which commercial crime coverage is specifically designed to respond to this type of loss?

employee dishonesty coverage

computer and funds transfer fraud coverage

forgery or alteration coverage

burglary coverage

NMPCIP New Mexico Property and Casualty Insurance Producer - Set 5 - Part 2

Question 25: A warehouse employee suffers a permanent injury that prevents him from ever lifting heavy loads again, so he needs retraining for a different type of position within the same general industry. Which category of workers compensation benefits funds this kind of vocational retraining?

Question 39: A homeowner purchases a flood insurance policy through a private insurance company's local agent, yet the policy is actually backed by the federal flood program, with the private insurer issuing the policy and adjusting claims under its own name. Which arrangement does this describe?

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