Which of the following is true about how the Insurance Commissioner gets into office?
A) Elected by the people
What is the main duty of the Insurance Commissioner?
A) Enforce insurance laws
The commissioner has the power to make rules and regulations as necessary for the proper enforcement of such laws, He or she does not set rates; insurance companies set their own rates. The commissioner does not write insurance laws, either.
All of the following are duties of the insurance commissioner EXCEPT:
C) Make rates
The insurance commissioner does not set rates; the insurance set their own rates.
All of the following are true regarding the insurance commissioner’s Market conduct Examination authority EXCEPT:
D) He or she may only examine admitted companies once every five years
The insurance commissioner may examine any person involved in insurance at any time, whenever he or she deems it is necessary. Market conduct examination of all licensed insurers must be held at minimum once every five years.
All of the following persons would be required to be licensed EXCEPT:
D) A clerical person that receives premiums but is not paid in any incentive for such receipt
Salaried agency or insurance company clerical staff personnel are not required to be licensed unless they solicit, negotiate, bind or sell insurance.
Producer licenses are good for what period of time before renewal is required?
A) Two (2) years
Initial individual licenses are renewable on the producer’s next birthday, plus one year, and every two years thereafter.
Upon passing one section of a combines (life and health or property and casualty) licensing examination, the second part must be passed immediately, or no later than within how many days?
A) Within 90 days of the first
If a candidate is taking a combined examination, i.e., Life and Health and fails the law part of the test, the candidate may retake the failed portion again within 90 days. If a candidate is taking a single authority examination i.e., Life only, and fails law, they are required to retake the entire single authority examination.
What minimum age is required for you to be licensed as an insurance producer in this state?
A) 18 years old
All of the following are required in order to hold a WA producer’s license EXCEPT:
A) Be licensed in another state
To become licensed as a WA insurance producer, an individual must be at least 18 years of age, complete the required preliminary training, pay nonrefundable licensing fees, be a trustworthy person of good character, and be a WA resident. Being licensed in any other state is not a requirement to obtain a license.
Pre-licensing training requirements for a major line of insurance, such as Life insurance, require how many hours of pre-licensing training?
A) 20 hours
The requirements to hold a nonresident producer license include all of the following EXCEPT:
A) Be a part-time resident of WA
Being a part-time resident of WA is NOT required to obtain a non-resident license.
Temporary licenses may be issued by the Commissioner under certain circumstances. How many days are these licensed valid?
B) 180 days
The Commissioner may issue temporary licenses without exam for up to 180 days (6 months) to the surviving spouse or next of kin of a producer who died.
Of the following persons, which one would be required to hold a producer’s license?
B) Person soliciting policies of insurance
Trainers or officers of insurers are not required to be licensed unless they solicit negotiate bind or sell insurance. Underwriters are not required to obtain a producer’s license. An individual may solicit, negotiate or sell insurance only when properly licensed for the line of business being transacted.
All of the following are requirements for obtaining a resident producer’s license EXCEPT:
D) Obtaining a bachelor’s degree
All of the following would be exempt from the producer licensing requirements EXCEPT:
A) A customer service representative who discusses policies
Customer service representatives who discuss policies must be licensed. Officers of insurers who do not receive commissions, agency supervisors whose actions do not include selling insurance, as well as underwriters are not required to obtain a producer’s license.
All of the following are true about the completion of pre-licensing training EXCEPT:
A) You must go to a lecture class
Going to a lectured class is not a requirement.
The continuing education requirement for WA is which of the following?
D) 24 hours per person, every two years
WA producers must earn 24 hours of continuing education (CE) credits every two years, three of which must be related to ethics.
Producers are required to keep records related to completion of continuing education for how many years?
A) Three (3) years
Continuing education records must be kept on file by producers for three years.
Which of the following correctly describes controlled business?
B) Any time more than 50% of the total premiums collected by a producer comes from themselves, their family, employer, or own business
It is unlawful to obtain a producer’s license “principally” for the purpose of writing controlled business, such as business written on yourself or your family members.
All of the following are valid reasons for denial, suspension or revocation of a producer’s license EXCEPT:
B) Selling 20% controlled business
Controlled business (selling to yourself, family members) is perfectly legal as long as it’s not the primary clientele.
Which of the following is correct regarding the Commissioner’s ability to revoke or suspend a producer’s license?
C) The Commissioner may revoke or refuse to renew a producer’s license immediately and without hearing, upon sentencing of the licensee for conviction of a felony by final judgment of any court of competent jurisdiction, if the facts giving rise to such conviction demonstrate the licensee to be untrustworthy to maintain any such license
All of the following are true about license denial, suspension or revocation EXCEPT:
C) You may still sell insurance on a suspended license for 180 days
Individuals are not allowed to sell insurance if their license application was denied. Same rule applied to producers whose licenses have been suspended or revoked.
Fiduciary responsibility apply in which of the following situations
B) Handling client premiums
Producers have a fiduciary responsibility when it comes to handling other’s money. Premiums received from clients and unearned premiums received from insurers must not be combined with producer’s personal funds
A producer is required to maintain a separate account for which of the following monies?
B) Client monies
Client monies, such as premiums, must be kept in a fiduciary capacity. A separate trust account must be maintained for client’s as well as insurance companies’ monies.
When are producer’s required to forward client premiums to the insurer?
B) Promptly
The entire premium received must be paid promptly to the insurer.
Allowable disbursements from a separate account include all of the following EXCEPT:
A) Claims Payments
Disbursements from a separate account are allowed for bank charges, payments of premiums, payments of return premiums, payments of commissions, or transfer of fiduciary funds. Monies in a separate account are not designated for claims payments.
Records related to the Premium Fund Trust Account must be kept for how long?
D) 5 years
Producers must maintain records and an appropriate accounting system for all premiums and return premiums received, and must make such records available for inspection by the Commissioner upon demand during the five years immediately after the date of the transaction.
In which of the following situations would you be allowed to split your commission with someone else?
A) If they are properly license at the time of the sale
Sharing commission with someone else is only allowed with persons properly licensed at the time of the sale.
All of the following would be considered unfair marketing practices EXCEPT:
A) Stating which section the payment or denial of a claim is based upon
Stating which section the payment or denial of a claim is based upon is a requirement insurers must comply with.
Which of the following properly describes a rebate?
B) Returning part of your commission to your client, as an inducement to buy
Returning part of your commission to your client, as an inducement to buy would be considered a rebate. Requiring an insured to buy insurance from you as a condition to a loan is known as coercion. Selling insurance primarily to yourself, your family and/or a business you own or work for is known as controlled business. Misrepresenting policy provisions or coverage at issue is one of the unfair trade practices.
All of the following are true regarding rebates EXCEPT:
B) Rebates are always allowed
Rebating is paying anything of value (such as a return of the commission) to a client as an inducement to purchase. Giving a client anything of value is only allowed if specifically stated in the policy. Dividends are not considered to be rebates since it is stated in the policy that the client might receive one.
Which of the following would not be considered a rebate under WA law?
C) Offering a good student discount on their auto insurance
It is perfectly legal to give an insured a discount on the premium. Common discounts include multi-policy discounts, good driver discounts, and good student discounts.
All of the following are correct regarding misrepresentation EXCEPT:
D) The fines for misrepresentation may not be more than $100
Misrepresentation includes guaranteeing dividends and misleading advertisements. The fines for misrepresentation may not be less than $10 nor more than $1,000.
Which of the following correctly defines defamation?
C) False or malicious statements made about an insurance company or producer, circulated to injure their reputation.
It is considered to be defamation for a producer to state or publish information that is false or maliciously critical that is designed to injure the reputation of an insurer or raise questions about the character of another producer.
All of the following are prohibited practices EXCEPT:
C) Denial of a claim after a reasonable investigation
Denial of claim after reasonable investigation would not be considered a prohibited practice as some claims may not be covered, such as one that occurred before the effective date of the policy.
What is the continuing education requirement for the state of WA?
C) 24 hours every two years
WA producers must earn 24 hours of CE credits every two years, three of which must be related to ethics.
How often is the insurance commissioner required to examine all domestic insurance companies?
A) Every five years
The Insurance Commissioners is require3d to examine all domestic insurance companies once every five years. This is known as market conduct examination and is done at the expense of the insurer being examined.
Which of the following is correct about the insurance Commissioner’s ability to levy fines for violation of insurance laws?
B) Fines shall be no less than $10 nor more than $1,000 and/or one year in prison in addition to any other penalty allowed by law
A person aggrieved by a written order of the Commissioner may demand a hearing. The hearing must be requested within how many days of receiving the order?
B) 90 days
A licensee has had their license temporarily suspended, and demanded a hearing with the Commissioner. The Commissioner must hold the hearing within how many days?
C) 30 days
If a hearing is requested by a licensee whose license has been suspended, Commissioner must hold the hearing within 30 days.
Which of the following is true regarding rate filings in the state of WA?
A) Rates must be approved prior to use
All policy forms and rates must be filed with the Insurance Commissioner. Prior approval before use is required. Life Insurance, disability insurance, reinsurance, aviation, title insurance, and ocean marine are exceptions to this rule – those do not have to file rates.
Which of the following accurately describes the certificate requirement for policy forms?
C) The CEO or an actuary of the insurer must certify that the policy form complies with the laws of the state of WA
All policy forms must contain a certification by either the CEO of the insurer or an actuary of the insurer attesting that the form complies with the laws of the state.
If an insurance company’s policy form contain a certification by the CEO, which of the following is true regarding those forms?
D) The forms may be used immediately after filing with the Insurance Commissioner
All policy forms must contain a certification by either the CEO of the insurer or an actuary of the insurer attesting that the form complies with the laws of the state. If such certification is found on a policy form, the form may be used immediately after filing with the commissioner.
All of the following are reasons why the insurance Commissioner may suspend, revoke, or refuse, to issue an insurance producer’s license EXCEPT:
D) If the licensee has been guilty of a misdemeanor
A producer’s license may be suspended or revoked for being convicted of a felony, but not for a misdemeanor.
Which of the following correctly describes the requirement for form and rate filing for malpractice insurance?
B) Forms and rates must be filed prior to use
Medical malpractice insurance forms and rates must be filed prior to use
Producers may receive compensation from:
D) Either insurers or from both
An insurance producer may be paid by a commission paid by the insurer, or a fee paid by the insured, or a combination of commission paid by the insurer and a fee paid by the insured from which an insurance producer may offset or reimburse the insured all or part of the fee.
Which of the following is a duty of the commissioner?
A) Making rules
The commissioner has the power to make necessary rules and regulations as essential for the proper enforcement of such laws. Insurers make their rates and write policy forms. The Commissioners does not write insurance laws; laws are passed by the legislature.
All of the following are true regarding Premium Trust Fund Accounts EXCEPT:
C) All premiums checks received by a producer must be deposited
If an applicant makes their initial premium check payable directly to the insurer the producer represents, it need not be deposited in the producer’s premium trust account.
All of the following are true when a producer receives a fee from an applicant as well as a commission from an insurer EXCEPT:
C) The receipt of a fee and a commission on the same transaction is unlawful
The receipt of a fee and a commission on the same transaction is permitted by law. A compensation disclosure form signed by the client must be collected if a producer receives an “excess fee,” which is a fee paid by the client in excess of the commission paid by the insurer.
Producers without any insurer appointments who represent clients only:
C) Must post a surety bond in favor of the residents of this state
A producer who represent clients without any appointments is considered to be engaged in “brokerage” and must post a surety bond in favor of the people of this state.
If an insurer revokes a producer’s appointment for cause, they must notify the Commissioner within ____ days.
A) 30
When an insurer revokes a producer’s appointment, they must notify the Commissioner within 30 days.
If an insurer revokes the appointment of an independent producer, they must give the producer ____ day’s advanced notice.
A) 120
When an insurer revokes the appointment of an independent producer they must give the producer 120 days’ advance notice.
Producers are not required to deliver a premium receipt to an insured when:
D) The payment is made by check payable to the insurer
In a case where a premium payment is made by a check payable to the insurer, producers are not required to deliver a premium receipt to an insured. When an applicant makes a premium check payable to the producer, the producer must deliver a signed premium receipt as soon as possible stating the name of the client, the insurer, the amount paid, and a description of the coverage purchased.
All of the following are true about the Commissioner EXCEPT:
D) Insurers may contribute to his or her election campaign
It is unlawful for an insurer to make contributions to a person who is campaigning to be elected Insurance Commissioners.
A producer who represents insureds without any appointments is required to post a bond in favor of the people of this state in the amount of $2,500 or 5% of premiums brokered in the prior calendar year, whichever is more, up to a maximum of:
D) $100,000
The amount of the surety bond that must be posted by an independent producer engaged in brokerage is at minimum $,2,500 or 5% of the premium brokered by the producer in the previous calendar year, whichever is greater, up to a maximum of a $100,000.
It is unlawful to induce a person to purchase insurance by offering any of the following EXCEPT:
C) Dividends, as stated in the policy
It is unlawful to induce a person to purchase insurance by offering anything of value that is not stated in the policy. This act is known as rebating. Dividends are not considered to be rebates since it is stated in the policy that the client might receive one.
The Commissioner may do which of the following?
D) Be a policyholder of an insurer
It is perfectly legal for an insurance Commissioner to buy an insurance policy (become a policy holder)
If the Commissioner notifies a licensee that a hearing will be held to suspend or revoke a producer’s license, the producer may instead request a hearing before:
B) An administrative law judge
A producers whose license is being suspended or revoked is entitled to a hearing held either by the Commissioner or an administrative law judge.
All of the following are true regarding independent insurance producers EXCEPT:
D) They cannot engage in brokerage
A producer who represents client without any appointments is considered to be engaged in brokerage and must post a surety bond in favor of the people of this state.
All of the following are prohibited under WA law EXCEPT:
A) Stating which section the payment or denial of a claim is based on