PPCI Pennsylvania Property and Casualty Insurance Exam - Set 1 - Part 3
Test your knowledge of technical writing concepts with these practice questions. Each question includes detailed explanations to help you understand the correct answers.
Question 41: An actuary explains to a room of new producers that an insurer can price homeowners coverage confidently because it insures hundreds of thousands of similar dwellings rather than a handful. Which underlying insurance principle is she describing to them?
Question 42: An insurer and a reinsurer sign a standing agreement under which the reinsurer automatically accepts a defined share of every commercial property risk the insurer writes in a given class of business. Which form of reinsurance does this arrangement represent?
Question 43: A policyholder receives an annual distribution from the company that issued her homeowners policy, and she is also entitled to vote for the company's board of directors at its yearly meeting. Which type of insurer issued this participating policy?
Question 44: A group of independent trucking companies forms an unincorporated organization in which each member exchanges insurance with the others and shares in assessments when losses run high. Who manages the day-to-day affairs of this type of insurer?
Question 45: An insurer incorporated under the laws of Canada writes commercial property coverage in Pennsylvania alongside a competitor that was incorporated in Ohio. From the viewpoint of the Pennsylvania Insurance Department, how is the Canadian company correctly classified for regulatory purposes?
Question 46: A Pennsylvania business is placed with an insurer that holds no certificate of authority from the Pennsylvania Insurance Department but appears on the Commonwealth's list of eligible surplus lines carriers. Which term correctly describes that insurer's status in Pennsylvania?
Question 47: A producer has no written authority to bind coverage, but she keeps company signs in her window, uses insurer letterhead and has bound risks for two years without correction. A customer reasonably believes she can bind. Which authority does this describe?
Question 48: An applicant completes an application for commercial property coverage, answers the underwriting questions honestly and pays the first premium. Which element of a legal contract do the applicant's statements and premium payment supply on his side of the agreement?
Question 49: An insured argues that ambiguous wording in his homeowners policy should be read in his favor because the insurer drafted every word and he had no opportunity to negotiate any of its terms. Which characteristic of insurance contracts supports that argument?
Question 50: An applicant for commercial property insurance never mentions that the building's sprinkler system was disconnected two years earlier, and the underwriter never thinks to ask about it. A fire follows. Which concept best describes the applicant's silence about that fact?
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