California Insurance Practice Test - Free 20 Questions

Question 1

Who is responsible for appointing an agent to act on behalf of an insurer?

Accepted Answer

The insurer

Answer

The agent

Answer

The Insurance Commissioner

Answer

The agent's manager

Question 2

What discount program did California Proposition 103 create for qualifying motorists?

Accepted Answer

Created the good driver discount policy

Answer

Established the California Earthquake Authority.

Answer

Eliminated the requirement for drivers to carry liability insurance.

Answer

Deregulated commercial property rates.

Question 3

An insurer that frequently engages in practices that are harmful to the public, even if those practices are not specifically defined as illegal, can be prosecuted under:

Accepted Answer

The Unfair Practices Act for general business misconduct.

Answer

Federal antitrust laws.

Answer

The NAIC Model Act.

Answer

Common law precedent only.

Question 4

An agent's license is considered inactive if:

Accepted Answer

The agent is not appointed by an insurer.

Answer

The agent has not met their CE requirements.

Answer

The agent is under investigation by the CDI.

Answer

The agent has not sold a policy in 90 days.

Question 5

An insurance solicitor is an individual authorized by whom to solicit applications for insurance?

Accepted Answer

A licensed insurance agent or broker

Answer

The CDI

Answer

A client

Answer

An insurance company

Question 6

An agent who misrepresents policy provisions or benefits to a client is guilty of an unfair trade practice. This could include:

Accepted Answer

Telling a client a policy has no exclusions when it does.

Answer

Providing a copy of the policy summary.

Answer

Explaining the suicide clause.

Answer

Recommending a higher coverage amount.

Question 7

In California, what is the primary purpose of the California Earthquake Authority (CEA)?

Accepted Answer

To provide residential earthquake insurance, typically as a separate policy offered by participating insurers.

Answer

To provide free health insurance to low-income residents.

Answer

To replace the state Workers Compensation fund.

Answer

To regulate the rates of commercial auto policies.

Question 8

If the Insurance Commissioner believes an agent has engaged in fraudulent activities, the Commissioner may:

Accepted Answer

All of the above.

Answer

Revoke the agent's license.

Answer

Suspend the agent's license immediately, pending a hearing.

Answer

Hold a hearing to investigate the matter.

Question 9

How often is the California Insurance Commissioner elected?

Accepted Answer

Every 4 years

Answer

Every 2 years

Answer

Every 6 years

Answer

Every 8 years

Question 10

A 'natural person' in the insurance code refers to:

Accepted Answer

A human being

Answer

A corporation

Answer

A trust

Answer

An environmentally-friendly agent

Free California California P&C Law & Ethics Practice Test

Question 1 of 10

Who is responsible for appointing an agent to act on behalf of an insurer?