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PROPERTY & CASUALTY TEST
(INDIANA SECTION) QUESTIONS
WITH ANSWERS (ALL AN SWERS
CORRECT)
Question : Insurance commissioner has the authority to..?
CORRECT ANSWER : enforce state insurance laws
Question : Department of Insurance has the power to..?
CORRECT ANSWER : Supervise the organization,
regulation, examination, rehabilitation, liquidation and conservation of all insurance companies doing business in the state
Question : Insurance laws have been written to protect
CORRECT ANSWER : the insuring public
Question : The commissioner has 3 main authorities
CORRECT ANSWER : 1. Executive Authority2.
Legislative Authority 3. Judicial Authority
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Question : Executive Authority
CORRECT ANSWER : to enforce state laws
Question : Legislative Authority
CORRECT ANSWER : to create Rules that explain or
clarify laws
Question : Judicial Authority
CORRECT ANSWER : to hold Administrative Hearings
Question : Who appoints the State Insurance
Commissioner
CORRECT ANSWER : state governor; can appoint and
also fire
Question : How is commissioner selected?
CORRECT ANSWER : Solely based off knowledge and
skill in insurance; no regard to his/her political beliefs
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Question : Commissioner must post bond, what amount?
CORRECT ANSWER : $50,000; this is to insure that
they will perform faithfully in his/her duties
Question : Commissioner authorized to join what group?
CORRECT ANSWER : National Association of
Insurance Commissioners (NAIC)
Question : Commissioner has 3 major responsibilities?
CORRECT ANSWER : 1. Assuring that insurance
Companies meet basic standards2. Assuring applicants meet requirements to be licensed, and maintain there licenses3. Assuring/Applicants, Producers and Companies adhere to both the producer Licensing Law/Unfair Competition Law
Question : Assuring that Companies Meet Basic
Standards
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CORRECT ANSWER: When customers purchase
insurance, they are purchasing a promise that their Insurance Company will pay for claims in future.Meaning they need to have strict financial standards in order to pay claims
Question : Companies classified in 3 different ways based
off of origin
CORRECT ANSWER : 1. Domestic (formed in Indiana
ex. Indiana Farmers)2. Foreign (Formed in another state/territory ex. New York Life)3. Alien (formed in another country ex. Lloyds of London)
Question : Company must be Admitted/Authorized to
conduct business in a state
CORRECT ANSWER : Domestic- Granted once they
meet state minimum requirements. Foreign/Alien must demonstrate that they already meet the requirements
Question : Once granted to conduct business in a certain
state, company will receive?