PPCI - Pennsylvania Property and Casualty Insurance Exam

Question 21: A Pennsylvania producer decides that a client would be better served by a different carrier, so he moves the client's homeowners coverage to that carrier at renewal without telling the client. Which prohibited act does this conduct match?

Twisting a policy for commission

Failing to report an administrative action

Misappropriating premium funds

Transferring coverage without the insured's consent

Question 22: The Pennsylvania Insurance Department sends a producer three written inquiries about a consumer complaint over a two-month period, and the producer never answers any of them. What administrative fine does the licensing article authorize for that failure?

Up to one hundred dollars per day

Fifty dollars for each inquiry ignored

Five hundred dollars for the first refusal

Up to two thousand dollars per complaint

Question 23: A producer tells a homeowner that a policy covers water backing up through sewers when the form plainly excludes it, and the homeowner buys on that basis. Which unfair method of competition under the Unfair Insurance Practices Act does this describe?

Defamation

Misrepresentation

Rebating

Boycott

Question 24: A producer tells prospects across her territory that a competing insurer is nearly insolvent and will not be able to pay claims, knowing the statement is false. Which practice defined in the Unfair Insurance Practices Act does this conduct match?

Defamation

Twisting

Unfair discrimination

False financial statement

Question 25: Several Pennsylvania insurers agree among themselves to stop accepting applications from a particular independent agency until that agency drops a competing carrier from its list. Which unfair method of competition defined in the Act does this coordinated conduct represent?

Unfair discrimination among insureds

Improper claims settlement practice

Boycott, coercion or intimidation

Misappropriation of funds

Question 26: To win a large commercial account, a Pennsylvania producer offers to pay the first quarter's premium himself out of his own commission. The prospect accepts the offer and the policy is issued. What does Pennsylvania law say about this inducement?

It is allowed if fully disclosed

It is allowed for commercial risks only

It is allowed with insurer approval

It is prohibited as a rebate

Question 27: A producer shows a policyholder a misleading side-by-side comparison of her current policy and a competitor's product to persuade her to surrender the existing coverage and buy a replacement. Which long-standing Pennsylvania prohibition does this conduct violate?

The anti-defamation statute

The anti-twisting statute

The fiduciary funds statute

The complaint records statute

Question 28: An insurer occasionally underpays a claim by mistake, corrects the error when it is pointed out and has no pattern of doing so. Under the unfair claims settlement provisions of the Unfair Insurance Practices Act, what determines whether the conduct is actionable?

Whether it amounts to a business practice

Whether the insured filed a written complaint

Whether the underpayment exceeded a threshold

Whether the adjuster held a Pennsylvania license

Question 29: A Pennsylvania homeowner telephones her insurer on a Monday morning to report that a storm tore shingles off her roof over the weekend. Under the unfair claims settlement regulation, how quickly must the insurer acknowledge receipt of that notification of claim?

Within fifteen working days

Within twenty calendar days

Within ten working days

Within thirty calendar days

Question 30: A Pennsylvania insurer receives properly executed proofs of loss from a homeowner on a first-party fire claim and begins reviewing the file. Under the unfair claims settlement regulation, what must the insurer do next, and within what period?

Pay the claim within ten working days

Order an appraisal within fifteen calendar days

Complete its investigation within five working days

Accept or deny within fifteen working days

Question 31: A Pennsylvania insurer cannot finish investigating a complicated liability claim within the period the unfair claims settlement regulation contemplates. What must the insurer do to remain compliant while the investigation continues past that initial period and the file stays open?

Pay the undisputed portion within ten days

Send status letters every forty-five days

Refer the file to the Department

Obtain the claimant's written consent to delay

Question 32: A Pennsylvania insurer is preparing for a market conduct examination and asks how far back it must be able to produce its register of consumer complaints. What period does the Unfair Insurance Practices Act require the insurer to cover?

The preceding year

The preceding two years

The preceding seven years

The preceding four years

Question 33: A Pennsylvania insured knowingly submits a claim for a stolen boat that he had actually sold to a neighbor months earlier, intending to collect the proceeds. Under the Pennsylvania Crimes Code provision on insurance fraud, how is that offense graded?

A felony of the third degree

A misdemeanor of the first degree

A summary offense

A civil violation only

Question 34: A Pennsylvania insurer establishes a customer relationship with a new personal lines policyholder and later wants to share her nonpublic personal financial information with a nonaffiliated marketing firm. What does Pennsylvania's privacy regulation require before that sharing occurs?

A signed authorization at each renewal

Approval of the sharing by the Commissioner

Notice and a chance to opt out

A confidentiality agreement with the marketing firm

Question 35: A Pennsylvania homeowner's insurer is declared insolvent while her fire loss claim is still pending, so she turns to the Pennsylvania Property and Casualty Insurance Guaranty Association for help. What is the maximum the association may pay on her covered claim?

One hundred thousand dollars per claimant

Two hundred thousand dollars per claimant

Five hundred thousand dollars per claimant

Three hundred thousand dollars per claimant

Question 36: A Pennsylvania surplus lines licensee wants to place property coverage for a manufacturer with a nonadmitted insurer. Before that placement is proper, what must the licensee generally establish about the admitted market, apart from using an eligible surplus lines insurer?

That admitted insurers quoted higher premiums

That the Commissioner approved the placement

That a diligent search found nothing comparable

That the risk is located outside Pennsylvania

Question 37: A manufacturer installs a sprinkler system, buys insurance on the building, keeps a reserve for small losses and refuses to store flammable solvents on site. Which method of handling risk does the purchase of the insurance policy itself represent?

Transfer

Retention

Reduction

Avoidance

Question 38: An investor buys shares in a company hoping the price will rise, while a homeowner across town worries that a kitchen fire could destroy her house. Which term describes the homeowner's exposure and explains why an insurer will write it?

Speculative risk

Pure risk

Morale hazard

Retained risk

Question 39: An underwriter reviews three files: a building with worn electrical wiring, an insured who once burned a warehouse for the insurance money, and an insured who habitually leaves his shop unlocked overnight. Which hazard does the habitually unlocked shop illustrate?

Physical hazard

Moral hazard