Connecticut Property & Casualty Insurance License, Practice Exams

38a-841(a)(1) fixes the window in which a covered claim must arise. What is it?

1. Claims existing before the determination of insolvency only, any claim arising after that date being the responsibility of the liquidator out of the estate of the insolvent insurer rather than of the association.
2. Claims arising at any time while the policy remains in force, the association assuming the insolvent insurer's obligations for the whole of the unexpired term of every policy it had written before the order.
3. Claims existing before the determination of insolvency or entry of the liquidation order, and those arising within thirty days after it, or before the policy expires, is replaced or is cancelled if sooner. ✓
4. Claims existing before the determination of insolvency and those arising within ninety days after it, that period running whether or not the insured has replaced the policy or caused it to be cancelled in the meantime.

Why: 38a-841(a)(1) makes the association OBLIGATED TO THE EXTENT OF THE COVERED CLAIMS EXISTING PRIOR TO THE DETERMINATION OF INSOLVENCY OR THE ENTRY OF A FINAL ORDER OF LIQUIDATION ... AND ARISING WITHIN THIRTY DAYS AFTER THE DETERMINATION ... OR BEFORE THE POLICY EXPIRATION DATE IF LESS THAN THIRTY DAYS AFTER THE DETERMINATION ..., OR BEFORE THE INSURED REPLACES THE POLICY OR CAUSES ITS CANCELLATION IF THE INSURED DOES SO WITHIN THIRTY DAYS. Whichever comes first ends the window.

How does 38a-289 treat contracts of reinsurance?

1. They are deemed insurance contracts in every respect, so that the statutory requirements as to the form of insurance policies apply to them in the same way as to a direct contract of insurance.
2. They are not insurance contracts at all but contracts of indemnity between companies, and are therefore outside the commissioner's jurisdiction except as to the credit an insurer may take for them.
3. They are deemed insurance contracts only where the reinsurer is authorised to do business in this state, reinsurance placed with an unauthorised reinsurer being governed by the surplus lines provisions.
4. They are deemed insurance contracts, but the hazard under them is declared distinct in nature from the hazard originally insured, and form-of-policy law does not apply unless made specifically applicable. ✓

Why: 38a-289 provides that CONTRACTS FOR REINSURANCE SHALL BE DEEMED INSURANCE CONTRACTS, BUT THE HAZARD UNDER SUCH CONTRACTS IS DECLARED TO BE DISTINCT IN NATURE FROM THE HAZARD ORIGINALLY INSURED, and that NO PROVISION OF LAW RELATIVE TO THE FORM OF INSURANCE CONTRACTS OR POLICIES SHALL APPLY TO CONTRACTS OF REINSURANCE UNLESS MADE SPECIFICALLY APPLICABLE THERETO. The issuing company otherwise remains subject to its charter and the statutes so far as applicable.

Which three actions does 38a-976(1)(B) say are NOT adverse underwriting decisions?

1. The termination of an individual policy for non-payment of premium; a declination of coverage where the applicant withdraws the application; and the cancellation of a policy within the first sixty days.
2. The termination of an individual policy form on a class or state-wide basis; a declination solely because coverage is not available on that basis; and the rescission of a policy. ✓
3. The termination of a group policy on a class basis; a declination of coverage where the applicant fails to complete a medical examination; and the rescission of a policy during the contestable period.
4. The non-renewal of a policy at the end of its term; a declination of coverage based solely on a consumer report; and the rescission of a policy for material misrepresentation in the application.

Why: 38a-976(1)(B): notwithstanding subparagraph (A), the following shall not be considered adverse underwriting decisions: (i) the termination of an individual policy form on a class or state-wide basis; (ii) a declination of insurance coverage solely because such coverage is not available on a class or state-wide basis; or (iii) the rescission of a policy.

Which Dwelling Policy coverage reimburses the owner for lost rents when a rented dwelling becomes uninhabitable due to a covered loss?

1. Coverage D — Fair Rental Value ✓
2. Coverage B — Other Structures
3. Coverage E — Additional Living Expense
4. Coverage C — Personal Property

Why: Coverage D — Fair Rental Value pays the landlord for lost rental income when the rented premises cannot be used because of a covered peril.

What is the person's opportunity at a 38a-817(a) hearing, and who else may take part?

1. To be heard and show cause why the charges should be dismissed, no other person having any right to intervene in a proceeding between the commissioner and the respondent.
2. To submit written argument only, the commissioner deciding on the papers unless an oral hearing is directed on the respondent's application.
3. To be heard and to call witnesses, with intervention permitted only to a complainant whose complaint gave rise to the charges.
4. To be heard and show cause why a cease and desist order should not be made, with any person permitted upon good cause shown to intervene, appear and be heard. ✓

Why: 38a-817(a) gives the person AN OPPORTUNITY TO BE HEARD AND TO SHOW CAUSE WHY AN ORDER SHOULD NOT BE MADE BY THE COMMISSIONER REQUIRING SUCH PERSON TO CEASE AND DESIST FROM THE ACTS, METHODS OR PRACTICES SO COMPLAINED OF, and provides that UPON GOOD CAUSE SHOWN, THE COMMISSIONER SHALL PERMIT ANY PERSON TO INTERVENE, APPEAR AND BE HEARD AT SUCH HEARING BY COUNSEL OR IN PERSON. Intervention is open to any person on good cause, not only a complainant.

How do 38a-363(g) and 38a-363(h) define the USE of a motor vehicle and a PEDESTRIAN?

1. Use includes the loading or unloading of the vehicle and any repair, servicing or maintenance of it; a pedestrian is any person not occupying a motor vehicle, a person on a bicycle or in a horse-drawn carriage being an occupant of a vehicle rather than a pedestrian for this purpose.
2. Use means the operation of the vehicle upon a public highway and does not extend to loading or unloading, which is a commercial operation rather than a use of the vehicle; a pedestrian is any person on foot who is not entering into or alighting from a vehicle of any type at the time of the injury.
3. Use includes the loading or unloading of the vehicle; a pedestrian is any person not occupying a vehicle of any type whatever, so that a cyclist struck by a motor vehicle is an occupant of the cycle and is outside the definition of a pedestrian in this part of the statute.
4. Use includes the loading or unloading of the vehicle; a pedestrian is any person not occupying a vehicle of any type other than a vehicle designed to be drawn or driven by muscular power, so that a cyclist or a person in a hand-drawn cart is a pedestrian for these purposes. ✓

Why: 38a-363(g) provides that USE OF A MOTOR VEHICLE INCLUDES THE LOADING OR UNLOADING THEREOF. 38a-363(h) provides that PEDESTRIAN MEANS ANY PERSON NOT OCCUPYING A VEHICLE OF ANY TYPE OTHER THAN A VEHICLE DESIGNED TO BE DRAWN OR DRIVEN BY MUSCULAR POWER. The double negative matters: a cyclist or a person in a hand-drawn cart IS a pedestrian, because the vehicle occupied is one designed to be driven by muscular power. Read this with 38a-363(c), which defines OCCUPYING as TO BE IN OR UPON OR ENTERING INTO OR ALIGHTING FROM THE VEHICLE.

What remedies does 38a-995 give an individual, and what does 38a-995(e) say about any other remedy?

1. Damages and equitable relief for any violation of the privacy sections, with double damages where the violation was intentional; the section is in addition to any other remedy available to the individual at law or in equity.
2. Equitable relief for a failure to comply with 38a-983, 38a-984 or 38a-985, and damages capped at actual damages for a disclosure violating 38a-988; otherwise no remedy in law or equity for a violation of these sections. ✓
3. Equitable relief for any violation of the privacy sections, and damages only where the commissioner has first found a violation after a hearing; other remedies are preserved where the violation also breaches another statute.
4. Damages limited to actual damages for any violation of the privacy sections, together with costs and attorney's fees to the prevailing party; no equitable relief is available to an individual under the chapter.

Why: 38a-995(a): a person whose rights under 38a-983, 38a-984 or 38a-985 are violated may bring an action for equitable relief. 38a-995(b): an insurer, agent or insurance-support organization that discloses information in violation of 38a-988 is liable for damages, capped at the actual damages sustained. 38a-995(c): the court may award costs and reasonable attorney's fees to the prevailing party. 38a-995(e): except as specifically provided in the section, there shall be no remedy available to individuals, in law or in equity, for occurrences constituting a violation of the privacy sections.

What is underinsured motorist CONVERSION coverage under 38a-336a, and how does it relate to ordinary underinsured motorist coverage?

1. It is offered for an additional premium and sits on top of ordinary underinsured motorist coverage, so that an insured who buys it holds both coverages and may claim under each in turn up to their limits.
2. It is a mandatory coverage that every automobile liability policy must include, ordinary underinsured motorist coverage having been replaced by it for all policies issued or renewed in this state since its introduction.
3. It converts the insured's own collision coverage into underinsured motorist protection where the tortfeasor's limits are exhausted, the insured paying no additional premium for the conversion feature itself.
4. It is offered for an additional premium with limits in accordance with 38a-336, and its purchase is in lieu of ordinary underinsured motorist coverage under that section rather than in addition to that coverage. ✓

Why: 38a-336a(a) requires each insurer to OFFER, FOR AN ADDITIONAL PREMIUM, UNDERINSURED MOTORIST CONVERSION COVERAGE WITH LIMITS IN ACCORDANCE WITH SECTION 38a-336, and provides that THE PURCHASE OF SUCH UNDERINSURED MOTORIST CONVERSION COVERAGE SHALL BE IN LIEU OF UNDERINSURED MOTORIST COVERAGE PURSUANT TO SECTION 38a-336. It REPLACES ordinary UIM, it does not stack on top of it. The insurer must disclose its availability, cost and a description at the time of sale or issuance of each new policy.

Under the BACF, liability coverage for pollution caused by the discharge of fuel or fluids from a covered auto is:

1. Covered as a supplementary payment along with defense costs and bail bonds
2. Covered under physical damage as a specified cause of loss to the covered auto
3. Limited/excluded except for narrowly defined situations, often requiring a pollution endorsement ✓
4. Always fully covered, because fuel and fluids escaping from a covered auto are treated as an auto hazard rather than pollution

Why: The BACF contains a pollution exclusion with limited exceptions; broader pollution liability (e.g., for transporters) generally requires endorsement or separate coverage.

How is the association's board of directors constituted under 38a-840(a)?

1. Nine persons appointed by the Governor with the advice and consent of the General Assembly, of whom at least three must be representatives of the insurance-buying public rather than of member insurers.
2. Seven persons, four selected by member insurers and three appointed by the commissioner to represent policyholders, each serving a fixed term of three years and eligible for reappointment once.
3. Not less than five nor more than nine persons appointed directly by the commissioner from among the officers of member insurers, the member insurers themselves having no role in the selection of the board.
4. Not less than five nor more than nine persons, selected by member insurers subject to the approval of the commissioner, with terms established in the plan of operation. ✓

Why: 38a-840(a) provides that THE BOARD OF DIRECTORS ... SHALL CONSIST OF NOT LESS THAN FIVE NOR MORE THAN NINE PERSONS SERVING TERMS AS ESTABLISHED IN THE PLAN OF OPERATION UNDER SECTION 38a-842, and that THE MEMBERS OF THE BOARD OF DIRECTORS SHALL BE SELECTED BY MEMBER INSURERS SUBJECT TO THE APPROVAL OF THE COMMISSIONER. Vacancies are filled by a majority of the remaining members, again subject to approval.

A mutual insurer is owned by its:

1. Policyholders ✓
2. Reinsurers
3. Producers
4. Stockholders

Why: A mutual insurer is owned by its policyholders, who may receive policy dividends from divisible surplus.

Dividends paid to the policyholders of a mutual insurer are:

1. Not guaranteed and are a return of surplus ✓
2. Guaranteed each year by contract
3. Taxable as ordinary income to the insured
4. Paid only to the stockholders

Why: Mutual policy dividends are not guaranteed; they represent a return of unused premium and are generally not taxable.

Under TRIA, federal sharing of terrorism losses is triggered only for a 'certified act of terrorism,' which is certified by:

1. FEMA, through its disaster declaration process
2. The individual insurer, once its deductible is exhausted
3. The insurance commissioner of the state where the loss occurred
4. The Secretary of the Treasury (in consultation with other officials) ✓

Why: A terrorism event must be certified by the Secretary of the Treasury, in consultation with designated officials, before TRIA's loss-sharing applies.

38a-337 requires the commissioner to approve an apportionment plan. Who must subscribe to it, and who may appeal a ruling under it?

1. Only those carriers that write more than one per cent of the state's private passenger automobile premium must subscribe; appeals from the manager's rulings lie directly to the Superior Court under section 4-183.
2. All authorised carriers must subscribe, but only a carrier may appeal to the commissioner from a ruling of the manager or committee, an aggrieved applicant's remedy being a complaint to the Division of Consumer Affairs instead.
3. Carriers subscribe voluntarily, and any ruling of the manager or committee is final and binding on applicants and carriers alike unless the commissioner elects to review it on the commissioner's own motion.
4. All insurance carriers authorised to issue such policies must subscribe and participate; an applicant, an insured under the plan or an affected carrier may appeal to the commissioner from a ruling of the manager or committee. ✓

Why: 38a-337 requires the commissioner, after consultation with carriers, to APPROVE A REASONABLE PLAN OR PLANS FOR THE EQUITABLE APPORTIONMENT AMONG SUCH CARRIERS OF APPLICANTS ... WHO ARE IN GOOD FAITH ENTITLED TO BUT ARE UNABLE TO PROCURE SUCH POLICIES THROUGH ORDINARY METHODS, and provides that WHEN ANY SUCH PLAN HAS BEEN APPROVED, ALL SUCH INSURANCE CARRIERS SHALL SUBSCRIBE THERETO AND PARTICIPATE THEREIN, and that ANY APPLICANT ..., ANY PERSON INSURED UNDER ANY SUCH PLAN AND ANY INSURANCE CARRIER AFFECTED MAY APPEAL TO THE INSURANCE COMMISSIONER FROM ANY RULING OR DECISION OF THE MANAGER OR COMMITTEE. A further appeal lies under 4-183 with venue in New Britain.

In property insurance, the insured generally may NOT abandon damaged property to the insurer because:

1. Abandonment forfeits the insurer's right of subrogation
2. The insured, not the insurer, owns any salvage after payment
3. The abandonment clause prohibits forcing the insurer to take the property ✓
4. Abandoned property triggers a premium surcharge at the next renewal

Why: Most property policies state the insured cannot abandon property to the insurer; the insurer is not required to accept it.

A Named Non-Owner policy is appropriate for a person who:

1. Operates a livery or taxi service and needs liability coverage for the passengers carried for a fee
2. Wants comprehensive coverage only on a classic car kept in storage and never driven on public roads
3. Owns several commercial trucks and wants a single policy covering the entire fleet's liability exposure
4. Does not own an auto but regularly drives borrowed or rented vehicles and needs liability coverage ✓

Why: A named non-owner policy provides liability (and related) coverage to an individual who does not own a vehicle but drives others' or rented cars.

38a-305 gives fire insurance companies power to write a long list of additional risks, among them loss or damage by explosion. Which explosions does that grant of power carve out?

1. Explosions of steam boilers alone. Every other explosion may be insured against under the section whether or not fire ensues from it, explosion being a peril in its own right rather than an incident of the fire. ✓
2. Explosions of steam boilers and of every other pressure vessel, and then only where fire ensues from the explosion, in which event the company may insure the ensuing fire damage but not the explosion damage itself.
3. None. The section carves out no explosion, but permits a company to insure explosion loss only where fire ensues, so that the explosion is covered as an incident of the fire rather than as a peril in its own right.
4. Explosions caused by insurrection, riot, strikes, sabotage, war or usurped power, which may be written only under a separate certificate of authority for casualty lines issued to the company by the commissioner.

Why: 38a-305(a)(1) lets these companies insure AGAINST LOSS OR DAMAGE BY FIRE, LIGHTNING AND OTHER ELECTRICAL DISTURBANCES, WIND, TORNADO, CYCLONE, EARTHQUAKE, HAIL, FROST, SNOW, ICE, WEATHER OR CLIMATIC CONDITIONS ... AND BY EXPLOSIONS WHETHER FIRE ENSUES OR NOT, EXCEPT EXPLOSIONS OF STEAM BOILERS. The words WHETHER FIRE ENSUES OR NOT are the point: explosion is a peril in its own right under 38a-305, and the single exception is the steam boiler.

Workers' compensation wage-replacement (indemnity) benefits typically pay the worker:

1. Only the difference between the worker's wages and any unemployment compensation collected during the same weeks
2. One hundred percent of pre-injury gross wages, reported on a W-2 and fully subject to income tax
3. A flat statewide amount set by statute, the same for every worker
4. A percentage of average weekly wage, generally tax-free and subject to a maximum ✓

Why: Indemnity benefits usually replace a percentage (often around two-thirds) of the worker's average weekly wage, are generally tax-free, and are subject to statutory minimums and maximums.

For the purposes of 38a-10a, what makes a dispute large enough to mediate?

1. The claim as presented exceeds five thousand dollars, whatever the size of the gap between the parties, and the deductible is subtracted before that test is applied.
2. The difference between the parties' positions on actual cash value or amount of loss is five thousand dollars or more, though the parties may agree to mediate less. ✓
3. The difference between the parties' positions on the amount of loss exceeds the policy deductible by at least five thousand dollars, measured at the date of the first offer.
4. The difference between the parties' positions is ten thousand dollars or more, and the parties may not agree to mediate less.

Why: 38a-10a(a)(1) defines 'claim' as any dispute arising from the catastrophic event IN WHICH THE DIFFERENCE BETWEEN THE POSITION OF THE PARTIES FOR THE ACTUAL CASH VALUE OR THE AMOUNT OF LOSS IS FIVE THOUSAND DOLLARS OR MORE, NOTWITHSTANDING ANY APPLICABLE DEDUCTIBLE, EXCEPT THAT THE PARTIES MAY AGREE TO MEDIATE A DISPUTE INVOLVING A LESSER AMOUNT. The test is the GAP between the parties, the deductible is disregarded, and the threshold can be waived by agreement.

Personal Injury Protection (PIP), where applicable, typically covers:

1. Comprehensive damage to the insured's own vehicle from theft, fire, hail, or falling objects
2. Liability to third parties for bodily injury and property damage the insured causes
3. Property damage to another person's vehicle or fence caused by the insured
4. The insured's medical expenses, lost wages, and certain other economic losses regardless of fault ✓

Why: PIP, common in no-fault states, pays the insured's own medical, wage loss, and related economic benefits without regard to fault.

What does the Waiver provisions clause of the standard fire policy at 38a-307 provide?

1. No waiver of any provision is valid unless expressed in writing added to the policy, but a company that demands appraisal, or that examines the insured under oath or requires production of books of account, thereby waives any forfeiture of which it had knowledge at the time it made the demand.
2. No permission affecting the insurance exists unless granted in the policy, and no waiver is valid unless signed by an officer of the company at its home office, an agent or broker having no authority to waive any provision of the standard form or to grant any permission affecting it.
3. No permission affecting the insurance exists and no waiver of any provision is valid unless granted in the policy or expressed in writing added to it, and no provision, stipulation or forfeiture is waived by any requirement or proceeding on the part of the company relating to appraisal or to any examination provided for in the policy. ✓
4. No permission affecting the insurance exists and no waiver of any provision is valid unless expressed in writing added to the policy and filed with the Insurance Commissioner under 38a-311, which governs the approval of supplemental contracts and of extended coverage endorsements varying the perils covered by the standard fire insurance policy.

Why: The WAIVER PROVISIONS clause of the form in 38a-307 provides that NO PERMISSION AFFECTING THIS INSURANCE SHALL EXIST, OR WAIVER OF ANY PROVISION BE VALID, UNLESS GRANTED HEREIN OR EXPRESSED IN WRITING ADDED HERETO. NO PROVISION, STIPULATION OR FORFEITURE SHALL BE HELD TO BE WAIVED BY ANY REQUIREMENT OR PROCEEDING ON THE PART OF THIS COMPANY RELATING TO APPRAISAL OR TO ANY EXAMINATION PROVIDED FOR HEREIN. The second sentence is the practical one: investigating a claim does not waive a defence to it.

How is conversion coverage paid under 38a-336a(c)?

1. Up to the limits of the conversion coverage, after the limits of liability under all bodily injury liability bonds or policies applicable at the time of the accident have been exhausted. ✓
2. Up to the limits of the conversion coverage, reduced by the amounts the insured has recovered under all bodily injury liability bonds or policies applicable to the tortfeasor's liability for the collision.
3. Up to the limits of the conversion coverage, concurrently with the tortfeasor's liability insurer, each contributing rateably to the insured's damages in proportion to the limits each carries.
4. Up to the limits of the insured's own bodily injury liability coverage, whichever is the lower of that figure and the conversion coverage limits shown in the declarations of the policy.

Why: 38a-336a(b) provides that conversion coverage PROVIDES FOR THE PROTECTION OF PERSONS INSURED THEREUNDER WHO ARE LEGALLY ENTITLED TO RECOVER DAMAGES FROM OWNERS OR OPERATORS OF UNDERINSURED MOTOR VEHICLES, and 38a-336a(c) obliges each insurer TO PAY TO THE INSURED, UP TO THE LIMITS OF THE POLICY'S UNDERINSURED MOTORIST CONVERSION COVERAGE, AFTER THE LIMITS OF LIABILITY UNDER ALL BODILY INJURY LIABILITY BONDS OR INSURANCE POLICIES have been exhausted. That is the CONVERSION: the tortfeasor's payment does not reduce the coverage, it merely has to be exhausted first.

Which of these is one of the practices defined in 38a-816?

1. Failure to appoint a resident agent for service of process in this state.
2. Failure to file rates with the commissioner before they are used in this state.
3. Failure to maintain errors and omissions coverage in the amount fixed by regulation.
4. Failure to maintain complaint handling procedures. ✓

Why: 38a-816(7) defines FAILURE TO MAINTAIN COMPLAINT HANDLING PROCEDURES as an unfair method of competition or unfair and deceptive act or practice. The section also defines, among others, MISREPRESENTATIONS AND FALSE ADVERTISING OF INSURANCE POLICIES (1), FALSE INFORMATION AND ADVERTISING GENERALLY (2), DEFAMATION (3), BOYCOTT, COERCION AND INTIMIDATION (4), FALSE FINANCIAL STATEMENTS (5), UNFAIR CLAIM SETTLEMENT PRACTICES (6) and MISREPRESENTATION IN INSURANCE APPLICATIONS (8).

What must an insurer's disclosure under 38a-335a(c) cover, and to which claims does the section apply?

1. The limits of the private passenger automobile liability policy identified in the request only; umbrella and excess liability insurance need not be disclosed because it is not automobile insurance, and the section applies to requests made on any claim arising on or after October 1, 2009.
2. All private passenger automobile coverage the insurer provides to the insured, including any applicable umbrella or excess liability insurance issued by that insurer; the section applies to requests made on any claim arising on or after October 1, 2009. ✓
3. All private passenger automobile coverage the insurer provides to the insured, including umbrella or excess liability insurance issued by that insurer or by any other insurer of which the insurer has knowledge; the section applies to every pending claim whenever it arose, the disclosure being procedural rather than substantive.
4. All coverage of any kind the insurer provides to the insured, including homeowners and commercial liability policies that might respond to the collision, together with the loss and claim history of the insured under each of those policies for the three years preceding the collision.

Why: 38a-335a(c) provides that THE DISCLOSURE PROVIDED BY THE INSURER SHALL INDICATE ALL PRIVATE PASSENGER AUTOMOBILE COVERAGE PROVIDED BY THE INSURER TO THE INSURED, INCLUDING, BUT NOT LIMITED TO, ANY APPLICABLE UMBRELLA OR EXCESS LIABILITY INSURANCE ISSUED BY THE INSURER. 38a-335a(d) limits the section to REQUESTS FOR DISCLOSURE MADE ON ANY CLAIM ARISING ON OR AFTER OCTOBER 1, 2009. Only the disclosing insurer's own coverage is in scope, but its umbrella and excess layers are.

Several manufacturers in the same industry want to form an insurer they own to write their own liability coverage and operate across state lines. The most appropriate vehicle is a:

1. Beach plan
2. Risk purchasing group
3. Risk retention group ✓
4. FAIR Plan

Why: A risk retention group, owned by members in similar businesses, is designed to write its members' liability coverage and may operate across states once licensed in one.

A new NFIP flood policy generally does not take effect until how many days after the application and premium are submitted?

1. 10 days
2. 60 days
3. 30 days ✓
4. 15 days

Why: The NFIP imposes a standard 30-day waiting period before a new flood policy becomes effective, to discourage buying coverage only when a flood is imminent.

A loss in which the property is completely destroyed or damaged beyond economical repair is a:

1. Partial loss
2. Consequential loss
3. Total loss ✓
4. Salvage loss

Why: A total loss occurs when property is entirely destroyed or so damaged that repair is not economically feasible.

How does 38a-1(20) define an UNAUTHORIZED or NONADMITTED insurer?

1. An insurer that has not been granted a certificate of authority by the commissioner to transact the business of insurance in this state, or an insurer transacting business not authorized by a valid certificate. ✓
2. An insurer that has not been granted a certificate of authority by the commissioner to transact the business of insurance in this state; an insurer that holds a valid certificate is authorised for every line of insurance it writes here, the certificate being a general licence rather than a line-specific one.
3. An insurer chartered, organised or constituted under the laws of a jurisdiction outside the United States, which must place its Connecticut business through a licensed surplus lines broker under sections 38a-741 to 38a-744 rather than directly with the insured.
4. An insurer whose certificate of authority has been suspended or revoked by the commissioner under section 38a-41(c), an insurer that has never held a certificate being outside the definition because it has nothing that could be described as unauthorized or nonadmitted.

Why: 38a-1(20) provides that UNAUTHORIZED INSURER OR NONADMITTED INSURER MEANS AN INSURER THAT HAS NOT BEEN GRANTED A CERTIFICATE OF AUTHORITY BY THE COMMISSIONER TO TRANSACT THE BUSINESS OF INSURANCE IN THIS STATE OR AN INSURER TRANSACTING BUSINESS NOT AUTHORIZED BY A VALID CERTIFICATE. The second limb is the one candidates miss: a licensed insurer writing OUTSIDE the lines its certificate authorises is unauthorized as to that business. The third option describes an ALIEN insurer under 38a-1(2). Note also 38a-1(7), which defines a DOMESTIC SURPLUS LINES INSURER as ANY DOMESTIC INSURER THAT HAS BEEN AUTHORIZED BY THE COMMISSIONER TO WRITE SURPLUS LINES INSURANCE - authorised, and domestic.

At the closing of a loan secured by a one-to-four-family residential property, the lender is offered a written binder as evidence that hazard insurance has been procured. What does 38a-309(b) provide?

1. No person may refuse to accept a written binder issued by an insurer licensed here, or its duly authorised representative, as that evidence, and no person may require the borrower to furnish any receipt or other evidence that the premium on the policy has been paid for any period following the date of the closing of the loan.
2. No person may refuse to accept a written binder issued by an insurer licensed here, or its duly authorised representative, as that evidence; but the borrower may still be required to furnish a receipt showing the premium has been paid for twelve months after closing, or for less at the person's option. ✓
3. A lender may refuse to accept a written binder and require the policy itself, because a binder for temporary insurance may not exceed sixty days and a mortgage loan sold to the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation requires evidence of cover for a full year.
4. No person may refuse to accept a written binder issued by an insurer licensed here as that evidence, provided the binder is issued by the insurer itself rather than by a representative of it, and provided the borrower furnishes a receipt showing the annual premium has been paid in full for twelve months following the closing.

Why: 38a-309(b) provides that NOTWITHSTANDING THE PROVISIONS OF SUBSECTION (A), NO PERSON SHALL, AT THE TIME OF TITLE CLOSING FOR A LOAN SECURED BY A ONE-TO-FOUR-FAMILY RESIDENTIAL PROPERTY, REFUSE TO ACCEPT A WRITTEN BINDER ISSUED BY AN INSURER, OR A DULY AUTHORIZED REPRESENTATIVE OF AN INSURER, LICENSED TO DO BUSINESS IN THIS STATE, AS EVIDENCE THAT HAZARD INSURANCE HAS BEEN PROCURED FOR THE MORTGAGED PREMISES. The commissioner may require additional information so the binder meets Fannie Mae or Freddie Mac requirements, and NOTHING IN THIS SECTION SHALL BE CONSTRUED TO PROHIBIT A PERSON FROM REQUIRING THE BORROWER TO ALSO FURNISH A RECEIPT INDICATING THAT THE ANNUAL OR INSTALLMENT PREMIUM ... HAS BEEN PAID FOR TWELVE MONTHS FOLLOWING THE DATE OF CLOSING, OR FOR LESS THAN TWELVE MONTHS AT THE OPTION OF THE PERSON. A representative's binder counts, and the receipt may still be demanded.

Under a valued policy, the amount paid in the event of a total loss is:

1. The replacement cost of the property at the time of the loss
2. The amount stated (agreed) in the policy regardless of actual value ✓
3. The salvage value of whatever remains after the loss has occurred
4. The actual cash value at the time of loss, being replacement cost less depreciation

Why: A valued policy pays the agreed-upon amount stated in the policy upon total loss, common for fine art and antiques.

What is the evidentiary effect of a market conduct examiner's report under 38a-15(c), and what may it contain?

1. It is conclusive evidence of the facts stated in any proceeding brought by the state, and may include the examiner's opinions on the adequacy of the entity's market conduct.
2. It is presumptive evidence of the facts stated, and may comprise only facts appearing in the examined entity's records or ascertained from sworn testimony. ✓
3. It is admissible only if the examined entity has been given an opportunity to respond, and may include recommendations for corrective action.
4. It has no evidentiary effect until adopted by order of the commissioner, and may include any material the examiner considers relevant.

Why: 38a-15(c) requires each examiner to MAKE A FULL AND TRUE REPORT OF EACH MARKET CONDUCT EXAMINATION, WHICH SHALL COMPRISE ONLY FACTS APPEARING UPON THE BOOKS, PAPERS, RECORDS OR DOCUMENTS OF THE EXAMINED COMPANY, CENTER, ADMINISTRATOR OR SOCIETY OR ASCERTAINED FROM THE SWORN TESTIMONY OF ITS OFFICERS OR AGENTS OR OF OTHER PERSONS EXAMINED UNDER OATH CONCERNING ITS AFFAIRS, and provides that THE EXAMINER'S REPORT SHALL BE PRESUMPTIVE EVIDENCE OF THE FACTS THEREIN STATED in any action or proceeding in the name of the state against the entity. Presumptive, not conclusive - and facts only, not opinion.

How does the BOP commonly differ from a Commercial Package Policy for property valuation?

1. The BOP excludes business income entirely unless it is added by a separate endorsement carrying a scheduled limit
2. The BOP contains no liability coverage, only property
3. The BOP typically provides replacement cost and includes business income automatically ✓
4. The BOP values both building and contents at actual cash value

Why: A BOP typically provides replacement cost valuation and includes business income/extra expense automatically (often without a separate dollar limit), unlike a CPP which adds these separately.

38a-358(5) prohibits one further basis for declining, cancelling or not renewing private passenger nonfleet automobile insurance. What is it?

1. The fact that the applicant or named insured has been insured by the same insurer for fewer than three consecutive policy periods immediately preceding the decision complained of.
2. The fact that the applicant or the named insured has previously obtained insurance coverage through a residual market mechanism, which may not of itself be a basis for any of those actions. ✓
3. The fact that the applicant or named insured has made an inquiry about coverage under a policy without subsequently presenting a claim for payment under that policy to the insurer.
4. The fact that the applicant or named insured resides in a household with a person whose own application for private passenger automobile insurance has previously been declined by that insurer.

Why: 38a-358(5) prohibits a declination, cancellation or nonrenewal based ON THE FACT THAT THE APPLICANT OR NAMED INSURED PREVIOUSLY OBTAINED INSURANCE COVERAGE THROUGH A RESIDUAL MARKET MECHANISM. The policy behind it is plain: an insured should not be penalised in the voluntary market for having had to use the assigned risk plan, which is also why 38a-345 requires the insured to be told the plan exists.

Under the CGL Supplementary Payments, the insurer will pay up to how much per day for the insured's loss of earnings while attending a trial at the insurer's request?

1. $1,000
2. $100
3. $250 ✓
4. $500

Why: Supplementary Payments include up to $250 per day for the insured's actual loss of earnings due to attendance at hearings or trials at the insurer's request.

A restaurant's walk-in freezer fails due to compressor breakdown, spoiling $8,000 of food. Which coverage best responds?

1. Business income coverage for the sales lost while the freezer was down
2. Spoilage endorsement (and/or equipment breakdown) ✓
3. Ordinance or Law coverage to rebuild the freezer to current code
4. Products liability of the compressor's maker

Why: Spoilage coverage (or equipment breakdown) addresses loss to perishable stock caused by refrigeration/equipment breakdown.

An employee is injured while occupying a covered motor vehicle in the course of employment, and workers' compensation is available. What does 38a-336(f) provide?

1. Notwithstanding section 31-284(a), which makes workers' compensation the exclusive remedy, the employee is covered by the insured's otherwise applicable uninsured and underinsured motorist coverage, so the claim against the employer's automobile policy survives the exclusivity provision. ✓
2. The employee is covered by the insured's uninsured and underinsured motorist coverage only to the extent that the damages exceed the workers' compensation benefits paid or payable, the employer's compensation carrier having a lien on the balance to the extent of the benefits it has paid to the employee.
3. The employee is not covered by the insured's uninsured and underinsured motorist coverage, section 31-284(a) making workers' compensation the exclusive remedy of an employee injured in the course of employment against the employer and against any policy the employer has purchased.
4. The employee is covered by the insured's uninsured and underinsured motorist coverage provided the employer has elected in writing at the inception of the policy to extend the coverage to employees occupying covered vehicles in the course of their employment with the named insured.

Why: 38a-336(f) provides that NOTWITHSTANDING SUBSECTION (A) OF SECTION 31-284, AN EMPLOYEE OF A NAMED INSURED INJURED WHILE OCCUPYING A COVERED MOTOR VEHICLE IN THE COURSE OF EMPLOYMENT SHALL BE COVERED BY SUCH INSURED'S OTHERWISE APPLICABLE UNINSURED AND UNDERINSURED MOTORIST COVERAGE. Section 31-284(a) is the workers' compensation exclusive remedy provision; 38a-336(f) overrides it for this purpose, so the employee keeps the UM/UIM claim against the employer's automobile policy.

A reciprocal insurer is best described as:

1. An insurer owned and operated by the federal government to write perils private carriers avoid
2. A corporation owned by its stockholders, who elect the board of directors and receive dividends
3. An unincorporated group of subscribers who insure one another, managed by an attorney-in-fact ✓
4. A foreign insurer that writes only surplus lines business through resident surplus lines brokers

Why: A reciprocal or interinsurance exchange is an unincorporated association of subscribers who exchange insurance among themselves, administered by an attorney-in-fact.

A business wants the broadest possible liability protection covering owned, hired, and non-owned autos under one symbol. Which symbol accomplishes this?

1. Symbol 8, hired autos only
2. Symbol 2, owned autos only
3. Symbol 1 (Any Auto) ✓
4. Symbol 7, scheduled

Why: Symbol 1, "Any Auto," is the broadest designation, covering owned, hired, and non-owned autos for liability.

Homeowners Coverage C contains special limits of liability. The special limit on theft of jewelry, watches, and furs is commonly:

1. $2,500
2. $200
3. Unlimited
4. $1,000 to $1,500 ✓

Why: There is a special sublimit (commonly $1,500) for theft of jewelry, watches, and furs under Coverage C; higher amounts require scheduling.

An insured riding in someone else's car is injured. Both that car and the insured's own policy carry uninsured motorist coverage, and so do two other policies. In what order does 38a-336(d) rank them?

1. The coverage under which the injured person is a named insured is primary, the coverage on the occupied vehicle is secondary, and all other applicable policies are excess; recovery is limited to the sum of the primary and secondary limits, the excess policies contributing only above that sum.
2. All applicable policies contribute rateably from the first dollar in the proportion that the limits of each bear to the total of all the limits available, there being no primary or excess layer among uninsured motorist coverages written on a single accident in this state.
3. The coverage on the occupied vehicle is primary, the coverage under which the injured person is a named insured is secondary, and all other applicable policies are excess; recovery is limited to the highest amount recoverable under any one of them. ✓
4. The coverage on the occupied vehicle is primary and every other policy is excess, the injured person's own policy having no application at all where the vehicle occupied at the time of the accident carries uninsured and underinsured motorist coverage of its own.

Why: 38a-336(d) provides that IF A PERSON INSURED FOR UNINSURED AND UNDERINSURED MOTORIST COVERAGE IS AN OCCUPANT OF A NONOWNED VEHICLE COVERED BY A POLICY ALSO PROVIDING UNINSURED AND UNDERINSURED MOTORIST COVERAGE, THE COVERAGE OF THE OCCUPIED VEHICLE SHALL BE PRIMARY AND ANY COVERAGE FOR WHICH SUCH PERSON IS A NAMED INSURED SHALL BE SECONDARY. ALL OTHER APPLICABLE POLICIES SHALL BE EXCESS. THE TOTAL AMOUNT OF UNINSURED AND UNDERINSURED MOTORIST COVERAGE RECOVERABLE IS LIMITED TO THE HIGHEST AMOUNT RECOVERABLE UNDER THE PRIMARY POLICY, THE SECONDARY POLICY OR ANY ONE OF THE EXCESS POLICIES. Apportionment matters only among the excess policies, and then IN ACCORDANCE WITH THE PROPORTION THAT THE LIMITS OF EACH EXCESS POLICY BEAR TO THE TOTAL LIMITS OF THE EXCESS POLICIES.

38a-8(d) lets the commissioner engage attorneys, actuaries and accountants who are not on the department's staff. Who bears the cost?

1. The Insurance Fund, out of the assessments levied on all licensed insurers to meet the department's operating expenses for the year in which the work is done.
2. The department's own appropriation, on the ground that outside experts engaged this way exercise delegated regulatory authority and cannot be paid by the regulated party.
3. The domestic, alien or foreign insurer whose analysis, licence application or holding company transaction the experts are engaged to assist with. ✓
4. The cost is divided equally between the department and the insurer under a schedule the commissioner adopts by regulation.

Why: 38a-8(d) provides that AT THE EXPENSE OF A DOMESTIC, ALIEN OR FOREIGN INSURER, THE COMMISSIONER MAY ENGAGE THE SERVICES OF ATTORNEYS, ACTUARIES, ACCOUNTANTS AND OTHER EXPERTS NOT OTHERWISE PART OF THE COMMISSIONER'S STAFF as may be necessary to assist in the financial analysis of the insurer, the review of its licence applications, and the review of holding company transactions involving a domestic insurer. The insurer pays. The same user-pays principle appears at 38a-14(c)(1) for examinations.

38a-41(d) and (e) forbid the issue of a licence to two kinds of company. Which?

1. A foreign insurance company owned or financially controlled by another state of the United States, or an alien company owned or financially controlled by a foreign nation; and a company insuring the separate risks of the employees of an employer that controls it, above a twenty-five per cent threshold of premiums or of commissions.
2. A foreign insurance company owned or financially controlled by another state of the United States, or an alien company owned or financially controlled by a foreign nation or any state or province of one; and a company insuring the separate risks of the employees of an employer that controls it, above a ten per cent threshold. ✓
3. A domestic insurance company owned or financially controlled by this state; and a company insuring the separate risks of the employees of an employer that controls it, whatever proportion of the insurer's premiums or commissions that business represents, because such an arrangement is controlled business under 38a-782(b).
4. A foreign insurance company owned or financially controlled by another state of the United States, or an alien company owned or financially controlled by a foreign nation or any state or province of one; and any company controlled by its own policyholders, which may be organised only as a mutual insurer or a reciprocal.

Why: 38a-41(d) provides that NO LICENSE TO DO AN INSURANCE BUSINESS WITHIN THIS STATE SHALL BE ISSUED TO A FOREIGN INSURANCE COMPANY OWNED OR FINANCIALLY CONTROLLED BY ANOTHER STATE OF THE UNITED STATES OR TO AN ALIEN INSURANCE COMPANY OWNED OR FINANCIALLY CONTROLLED BY A FOREIGN NATION OR ANY STATE OR PROVINCE THEREOF. 38a-41(e) bars a licence to any company insuring the separate risks of the employees of a controlling employer WHERE THE PREMIUMS WRITTEN ANNUALLY BY THE INSURER ON THE SEPARATE RISKS OF SUCH EMPLOYEES EXCEED OR WILL EXCEED TEN PER CENT OF THE TOTAL PREMIUMS WHICH THE INSURER WRITES OR WILL WRITE ANNUALLY OR WHERE THE COMMISSIONS PAYABLE, IF ANY, ON PREMIUMS COVERING THE RISKS OF SUCH EMPLOYEES ... EXCEED OR WILL EXCEED TEN PER CENT OF THE TOTAL COMMISSIONS TO AGENTS. Either ten per cent test bars the licence. A mutual insurer, controlled by its members, is expressly contemplated by 38a-1(15), so the fourth option cannot be right.

Which best describes "non-owned autos" in commercial auto?

1. New and used autos held in a dealer's showroom inventory for sale, which Symbol 9 picks up while they sit on the display lot
2. Rental cars the named insured hires under short-term agreements while its own fleet units are in the shop being repaired
3. Autos used in the business but not owned, leased, or borrowed by the named insured — typically employees' own vehicles ✓
4. Autos titled to the named insured but assigned to a single employee for that employee's exclusive use during the workweek

Why: Non-owned autos (Symbol 9) are vehicles not owned/hired by the insured but used in its business, most often employees' personal autos.

A producer who recommends a product the client does not need solely to earn a larger commission has most clearly breached the duty of:

1. Suitability and fair dealing ✓
2. Salvage and abandonment rights
3. Coinsurance and loss sharing
4. Subrogation and recovery rights

Why: Recommending unsuitable products for the producer's own gain violates the ethical duties of suitability and fair dealing owed to the client.

What event triggers the mediation programme the Insurance Department may establish under Conn. Gen. Stat. 38a-10a(a)(1)?

1. A catastrophic event for which the Governor has declared a state of emergency. ✓
2. A single loss event causing insured damage the commissioner estimates to exceed one hundred million dollars statewide.
3. A declaration by the commissioner that claim volumes have overwhelmed the ordinary complaint process.
4. A federal disaster declaration covering any part of this state.

Why: 38a-10a(a)(1) permits the department to establish a mediation programme for an open claim for loss or damage to personal or real property arising under the listed policies AS A RESULT OF A CATASTROPHIC EVENT FOR WHICH THE GOVERNOR HAS DECLARED A STATE OF EMERGENCY. It is the GOVERNOR'S declaration that engages the section - not a federal declaration and not the commissioner's own finding.

A contract to insure stolen merchandise so it can be resold would be unenforceable due to lack of which element?

1. Competent parties
2. Legal purpose ✓
3. Offer and acceptance
4. Consideration

Why: A contract must have a legal purpose; insuring an illegal activity violates that requirement and is void.

A company holds a licence to do insurance business in this state under 38a-41. When does the licence expire, how is it renewed, and what may follow from not using it?

1. It expires on the thirty-first day of December succeeding the date of its issuance and may be renewed only on a fresh application supported by the evidence the original application required; failure to exercise the authority to write a particular line for two consecutive calendar years revokes that authority automatically.
2. It expires on the first day of May succeeding the date of its issuance and may be renewed without any formalities except as the commissioner requires; failure to exercise the authority to write a particular line for five consecutive calendar years may be sufficient cause to revoke the authority to write those lines of business.
3. It remains in effect until suspended, revoked or not renewed by the commissioner for cause under subsection (c), there being no fixed expiry date for a company licence in this state; failure to write a particular line for two consecutive calendar years may be sufficient cause to revoke the authority to write it.
4. It expires on the first day of May succeeding the date of its issuance and may be renewed without any formalities except as the commissioner requires; failure to exercise the authority to write a particular line for two consecutive calendar years may be sufficient cause to revoke the authority to write those lines. ✓

Why: 38a-41(a) provides that EACH SUCH LICENSE SHALL EXPIRE ON THE FIRST DAY OF MAY SUCCEEDING THE DATE OF ITS ISSUANCE, BUT MAY BE RENEWED WITHOUT ANY FORMALITIES EXCEPT AS REQUIRED BY THE COMMISSIONER, and that FAILURE OF A LICENSED COMPANY TO EXERCISE ITS AUTHORITY TO WRITE A PARTICULAR LINE OR LINES OF BUSINESS IN THIS STATE FOR TWO CONSECUTIVE CALENDAR YEARS MAY CONSTITUTE SUFFICIENT CAUSE FOR REVOCATION OF THE COMPANY'S AUTHORITY TO WRITE THOSE LINES OF BUSINESS. MAY CONSTITUTE SUFFICIENT CAUSE - it is a ground for revocation, not an automatic one. 38a-41(b) requires the commissioner to adopt regulations specifying what an applicant for a licence or a renewal must submit.

Who may request information from an insurer about a motor vehicle loss or a fraudulent claim under 38a-356, and may the insurer volunteer it?

1. Any authorised employee of the Department of Emergency Services and Public Protection, the Department of Motor Vehicles or a local police department may request it in writing, and an insurance company may on its own initiative provide and disclose information relating to fraud or potential fraud to those persons. ✓
2. Any authorised employee of the Department of Emergency Services and Public Protection, the Department of Motor Vehicles or a local police department may request it in writing, but an insurance company may not volunteer information, the section permitting disclosure only in answer to a written request from one of those authorised employees.
3. Only the Insurance Commissioner or the commissioner's designee may request it, a police department having to apply to the commissioner, and an insurance company may on its own initiative provide and disclose information relating to fraud or potential fraud to the commissioner but to nobody else.
4. Any law enforcement officer or any central reporting bureau may request it orally or in writing, and an insurance company may on its own initiative provide and disclose any information it holds about the insured to any person who satisfies the company that the information is sought for a legitimate purpose.

Why: 38a-356(a) provides that ANY AUTHORIZED EMPLOYEE OF THE DEPARTMENT OF EMERGENCY SERVICES AND PUBLIC PROTECTION, DEPARTMENT OF MOTOR VEHICLES OR A LOCAL POLICE DEPARTMENT MAY IN WRITING REQUEST ANY INSURANCE COMPANY TO RELEASE ... INFORMATION RELATIVE TO ANY INVESTIGATION IT HAS MADE CONCERNING A MOTOR VEHICLE'S LOSS OR POTENTIAL LOSS OR ANY INFORMATION RELATING TO FRAUD OR POTENTIAL FRAUD, and that ANY INSURANCE COMPANY, ON ITS OWN INITIATIVE, MAY PROVIDE AND DISCLOSE INFORMATION RELATING TO FRAUD OR POTENTIAL FRAUD TO SUCH AUTHORIZED PERSONS. Under 38a-356(b) the company SHALL furnish the information when requested, must let the commissioner or a court-ordered person inspect the records, and may itself ask the employee for information about the departmental investigation; fraud information may be passed to any central reporting bureau and law enforcement agency.

Two classes of business get longer notice periods under 38a-323 than the ordinary rules give. What are they?

1. Premium billing on a liability policy where a municipality is the named insured must be at least ninety days in advance, and refusal to renew a professional liability policy must be on at least sixty days' advance notice, which is the same period the section requires for an ordinary refusal to renew any other policy.
2. Premium billing on a liability policy where a municipality is the named insured must be at least sixty days in advance instead of the usual thirty, and refusal to renew a professional liability policy must be on at least ninety days' advance notice rather than the ordinary sixty. ✓
3. Premium billing on any commercial risk policy must be at least sixty days in advance, and refusal to renew a policy on which the annual premium exceeded fifty thousand dollars in the preceding policy period must be on at least ninety days' advance notice to the named insured.
4. Premium billing on a workers' compensation policy must be at least sixty days in advance, and refusal to renew a professional liability policy must be on at least ninety days' advance notice, a workers' compensation policy being otherwise outside the premium billing subsection altogether.

Why: 38a-323(d) provides that NOTWITHSTANDING THE PROVISIONS OF SUBSECTION (B), THE ADVANCE NOTICE PERIOD FOR ANY PREMIUM BILLING NOTICE SHALL BE AT LEAST SIXTY DAYS FOR ANY LIABILITY INSURANCE POLICY WHEREIN A MUNICIPALITY IS THE NAMED INSURED. 38a-323(e) provides that NOTWITHSTANDING THE PROVISIONS OF SUBDIVISION (1) OF SUBSECTION (A), THE ADVANCE NOTICE PERIOD FOR ANY REFUSAL TO RENEW ANY PROFESSIONAL LIABILITY POLICY SHALL BE AT LEAST NINETY DAYS, against the ordinary sixty days for nonrenewal. The fourth option is wrong on its first limb but right on its second: a workers' compensation policy is expressly outside 38a-323(b).

A Connecticut-insured vehicle is driven in another state whose compulsory insurance law requires higher limits than the policy carries. What does 38a-335(c) require the policy to provide?

1. That the limits and kinds of coverage are as set out in that other law in addition to those otherwise provided by the policy, so that the insured has the benefit of both, reduced by any other valid and collectible insurance and with no duplicate payment for the same element of loss to any person.
2. That the insured must purchase a separate certificate of financial responsibility in any jurisdiction whose requirements exceed the limits of the policy, the insurer being obliged only to arrange for the issuance of that certificate on the request of the named insured and at the named insured's expense.
3. That the limits and kinds of coverage are as set out in that other law in lieu of those otherwise provided, but only to the extent that law requires and only as to operation in that jurisdiction, reduced by other valid and collectible insurance, with no duplicate payment for the same element of loss. ✓
4. That the limits are as set out in that other law in lieu of those otherwise provided, and that the higher limits apply to the whole policy for the remainder of the policy period once the vehicle has been operated in that jurisdiction, subject to payment of the appropriate additional premium.

Why: 38a-335(c) is the out-of-state or conform-to-law provision. Where another state's, territory's, possession's or Canadian province's financial responsibility or compulsory insurance law REQUIRE INSURANCE ... AND SUCH INSURANCE REQUIREMENTS ARE GREATER THAN THE INSURANCE PROVIDED BY THE POLICY, THE LIMITS OF THE COMPANY'S LIABILITY AND THE KINDS OF COVERAGE AFFORDED BY THE POLICY SHALL BE AS SET FORTH IN SUCH LAW, IN LIEU OF THE INSURANCE OTHERWISE PROVIDED BY THE POLICY, BUT ONLY TO THE EXTENT REQUIRED BY SUCH LAW AND ONLY WITH RESPECT TO THE OPERATION OR USE OF THE MOTOR VEHICLE IN SUCH STATE, TERRITORY, POSSESSION OR PROVINCE. The coverage is REDUCED TO THE EXTENT THAT THERE IS OTHER VALID AND COLLECTIBLE INSURANCE, and IN NO EVENT SHALL ANY PERSON BE ENTITLED TO RECEIVE DUPLICATE PAYMENTS FOR THE SAME ELEMENT OF LOSS.

A commercial risk policy that has been in effect for more than sixty days is cancelled. Which grounds attract only TEN days' advance notice under 38a-324(a), and what is the period in every other case?

1. Nonpayment of premium alone; in all other cases, sixty days, except that a material increase in the hazard insured against, physical changes in the property increasing the hazard and a substantial loss of reinsurance affecting the line each attract thirty days' advance notice rather than sixty.
2. Nonpayment of premium, a material increase in the hazard insured against, physical changes in the property which increase the hazard, and a substantial loss of reinsurance by the insurer affecting the particular line of insurance; in all other cases, forty-five days, as for a motor vehicle policy under 38a-343.
3. Nonpayment of premium and discovery of fraud or material misrepresentation by the insured; in all other cases, sixty days, except that the period for any policy on which the annual premium exceeded fifty thousand dollars in the preceding year is ninety days whatever the ground of cancellation may be.
4. Nonpayment of premium, conviction of a crime arising out of acts increasing the hazard, discovery of fraud or material misrepresentation, discovery of a wilful or reckless act or omission increasing the hazard, and a determination by the commissioner that continuation would violate the law; in all other cases, sixty days. ✓

Why: 38a-324(a) sets three tiers. TEN DAYS for nonpayment of premium, with the insured able to AVOID THE EFFECT OF THE CANCELLATION BY PAYMENT IN FULL AT ANY TIME PRIOR TO THE EFFECTIVE DATE; and ten days again where the basis is CONVICTION OF A CRIME ARISING OUT OF ACTS INCREASING THE HAZARD INSURED AGAINST, DISCOVERY OF FRAUD OR MATERIAL MISREPRESENTATION BY THE INSURED IN OBTAINING THE POLICY OR IN PERFECTING ANY CLAIM THEREUNDER, DISCOVERY OF ANY WILFUL OR RECKLESS ACT OR OMISSION BY THE INSURED INCREASING THE HAZARD INSURED AGAINST OR A DETERMINATION BY THE COMMISSIONER THAT CONTINUATION OF THE POLICY WOULD VIOLATE OR PLACE THE INSURER IN VIOLATION OF THE LAW. IN ALL OTHER CASES, AT LEAST SIXTY DAYS' ADVANCE NOTICE SHALL BE GIVEN - which catches physical changes, a material increase in the hazard and loss of reinsurance. The advance notice for a PROFESSIONAL LIABILITY POLICY, as defined in 38a-393, is AT LEAST NINETY DAYS.

An SR-22 is best described as:

1. A title document the state issues when a vehicle changes owners
2. A certificate filed with the state by the insurer verifying that an at-risk driver carries required liability coverage ✓
3. A no-fault accident report the driver must file with the motor vehicle department within 10 days of any crash causing injury
4. A high-risk auto liability policy sold through the state's assigned risk plan

Why: An SR-22 is a financial responsibility certificate the insurer files to confirm a high-risk driver maintains the state's required liability insurance.

38a-702f(f) deals with a licensee's failure to report a change of information. What follows a failure to report a change of legal name or address in time?

1. The licence is automatically suspended until the change has been reported and a reinstatement fee paid.
2. The commissioner may refuse to renew the licence at its next expiry, but no penalty may be imposed.
3. The commissioner shall impose a penalty pursuant to section 38a-774, having determined the failure on investigation. ✓
4. The licensee commits an infraction punishable by a fine of not more than two hundred fifty dollars.

Why: 38a-702f(f): licensees shall inform the commissioner of any change of licensee information as required under section 38a-771, and if, upon investigation, the commissioner determines that a licensee has failed to timely inform the commissioner of a change in legal name or address, the commissioner SHALL impose a penalty pursuant to section 38a-774.

A key distinction between the Jones Act and the LHWCA is that:

1. Both require the injured worker to prove employer negligence before any benefit is payable, so neither one operates as a no-fault system
2. The Jones Act covers seamen on a fault (negligence) basis, while LHWCA covers maritime/dock workers on a no-fault basis ✓
3. Both operate as pure no-fault compensation programs, paying scheduled benefits without any regard to who actually caused the injury
4. The Jones Act pays seamen no-fault scheduled benefits, while the LHWCA requires dock workers to prove that their employer was negligent

Why: The Jones Act lets seamen sue for negligence (fault-based), whereas the LHWCA is a no-fault compensation system for longshore and harbor workers who are not seamen.

A bond guaranteeing that the contractor will pay subcontractors, laborers, and material suppliers is a:

1. Maintenance bond
2. Performance bond
3. Payment bond ✓
4. Bid bond

Why: A payment bond guarantees that subcontractors and suppliers will be paid, protecting against liens.

An insured who leaves a car unlocked with keys inside because insurance will cover it demonstrates:

1. A legal hazard
2. A morale hazard ✓
3. A physical hazard
4. A moral hazard

Why: A morale hazard arises from carelessness or indifference to loss because insurance exists, increasing the likelihood of loss.

Identity theft / identity fraud expense coverage on a Homeowners policy generally provides:

1. Liability protection for the insured against the debts the thief ran up in their name
2. Reimbursement only for physical property such as a wallet, cards and documents taken in the theft
3. Expenses to restore the insured's identity and credit after fraud ✓
4. Earthquake protection for the dwelling

Why: The identity theft endorsement reimburses expenses (such as legal fees, lost wages, and notary costs) incurred to restore the insured's identity and credit standing.

When converting from an occurrence form to a claims-made form, 'prior acts' coverage refers to:

1. Only the tail bought when a claims-made policy is cancelled or nonrenewed
2. Coverage for occurrences that took place before the policy's inception but on or after the retroactive date ✓
3. Coverage for claims already made against the insured before the new policy incepted, provided the insured reports them to the new carrier within 60 days
4. Doubling the aggregate limit for the first year after conversion

Why: Prior acts (nose) coverage, established by setting the retroactive date earlier, covers occurrences before inception but on/after that date.

Compared with a loss payable clause, a standard mortgage clause gives the mortgagee:

1. No rights of its own, so it must sue the insured to collect
2. Independent rights, including payment even if the insured's own claim is denied for certain acts ✓
3. The same derivative rights a loss payee has, so denial of the insured's claim also bars payment
4. Only the right to take salvage after the insurer pays

Why: A standard (union) mortgage clause grants the mortgagee independent rights, so it may still be paid even if the insured's claim is voided by certain acts.

The Requirements in case loss occurs clause of 38a-307 sets a deadline for the proof of loss. What is it?

1. Within thirty days after the loss, unless the time is extended in writing by the company or by a representative of the company authorised in writing to grant such an extension.
2. Within sixty days after the loss, unless the time is extended in writing by the company, the insured rendering a proof of loss signed and sworn to by the insured. ✓
3. Within sixty days after the company requests a proof of loss in writing, no obligation arising until such a request has been made and received by the insured.
4. Within ninety days after the loss, that period running concurrently with the insured's duty to protect the property from further damage and to prepare an inventory.

Why: The REQUIREMENTS IN CASE LOSS OCCURS clause of the standard form at 38a-307 requires the insured to GIVE IMMEDIATE WRITTEN NOTICE TO THIS COMPANY OF ANY LOSS, PROTECT THE PROPERTY FROM FURTHER DAMAGE, FORTHWITH SEPARATE THE DAMAGED AND UNDAMAGED PERSONAL PROPERTY, PUT IT IN THE BEST POSSIBLE ORDER, FURNISH A COMPLETE INVENTORY ...; AND WITHIN SIXTY DAYS AFTER THE LOSS, UNLESS SUCH TIME IS EXTENDED IN WRITING BY THIS COMPANY, THE INSURED SHALL RENDER TO THIS COMPANY A PROOF OF LOSS, SIGNED AND SWORN TO BY THE INSURED. Sixty days from the LOSS, and the extension must be written.

Experience rating in workers' compensation works by comparing an individual employer's actual losses to:

1. The employer's payroll growth over the past three policy years
2. A benefit schedule published each year by the U.S. Labor Department
3. The expected (average) losses for employers in the same classifications ✓
4. The losses of employers in unrelated industries

Why: Experience rating compares an employer's actual loss experience to the average expected losses for similar employers, producing a credit or debit modification.

What exemption does 38a-848 give the association, and what does it NOT cover?

1. Exemption from all state and municipal taxes of every kind, including real and personal property taxes on premises the association owns and occupies for its own purposes.
2. Exemption from the premium tax only, all other state and municipal taxes and fees applying to the association in the same way as to any member insurer writing business here.
3. Exemption from the payment of all fees and all taxes levied by the state or by any of its political subdivisions, but not from the payment of real or personal property taxes. ✓
4. Exemption from all fees and taxes levied by the state, municipal taxation being a matter for each municipality to determine by ordinance under the general statutes relating to exemptions.

Why: 38a-848 provides that SAID ASSOCIATION SHALL BE EXEMPT FROM PAYMENT OF ALL FEES AND ALL TAXES LEVIED BY THE STATE OR ANY OF ITS SUBDIVISIONS PROVIDED IT SHALL NOT BE EXEMPT FROM THE PAYMENT OF REAL OR PERSONAL PROPERTY TAXES. The proviso is the whole point of the section: the exemption is broad but property taxes are carved out of it.

What is the primary purpose of a coinsurance clause in commercial property insurance?

1. To set the deductible as a fixed percentage of the building limit shown in the declarations
2. To encourage insureds to carry insurance close to the property's full value ✓
3. To exclude windstorm and earthquake from the causes of loss form
4. To require the insurer to share each loss with its reinsurers under a quota share treaty

Why: Coinsurance encourages insureds to insure to value; if they underinsure below the required percentage, the loss payment is reduced proportionally.

A producer's licence has been nonrenewed for failure to comply with the continuing education requirements. What do R.C.S.A. 38a-782a-14(b) and (c) provide about reinstatement?

1. Such a producer may apply for reinstatement at once, the outstanding hours being added to the requirement for the biennium next following reinstatement of the producer's licence.
2. Only a resident producer must complete the outstanding requirements before applying; a nonresident may rely on compliance with the home state's requirements for the same period.
3. Such a producer may apply for reinstatement on completing half the outstanding hours, the balance being carried into the biennium next following the reinstatement of the licence.
4. No such producer, resident or nonresident, may apply for reinstatement unless the requirements for the period are complete; and completing them does not reduce the next biennium's requirement. ✓

Why: R.C.S.A. 38a-782a-14(b): no resident or nonresident producer whose licence has been nonrenewed for failure to comply shall apply for reinstatement unless the producer has successfully completed the continuing education requirements for the period. 38a-782a-14(c): completion and reinstatement shall not reduce the producer's requirements for the biennium next following the reinstatement.

How do 38a-1(8), (18) and (21) define FOREIGN COUNTRY, STATE and UNITED STATES?

1. A foreign country is any jurisdiction outside the fifty states; a state is any of the fifty states of the United States; the United States means the United States of America and the District of Columbia, but not its territories, possessions or the Commonwealth of Puerto Rico.
2. A foreign country is any jurisdiction not in a state, district or territory of the United States; a state is any state, district or territory of it; the United States means the USA, its territories and possessions, Puerto Rico and the District of Columbia. ✓
3. A foreign country is any jurisdiction whose insurance supervisor is not a member of the NAIC; a state is any state or district of the United States; the United States means the United States of America together with any jurisdiction subject to its laws.
4. A foreign country is any jurisdiction other than this state; a state is any state, district or territory of the United States, including this state; the United States means the United States of America, its territories and the Commonwealth of Puerto Rico.

Why: 38a-1(8): foreign country means any jurisdiction not in any state, district or territory of the United States. 38a-1(18): state means any state, district, or territory of the United States. 38a-1(21): United States means the United States of America, its territories and possessions, the Commonwealth of Puerto Rico and the District of Columbia.

How is the governing committee of the automobile residual market plan composed under 38a-329(a)(3)?

1. Ten voting members appointed by the commissioner, of whom five represent participating carriers, three represent licensed producers and two represent consumers insured through the plan at the date of appointment.
2. Nine voting members selected under the plan of operation, of whom seven represent participating carriers and two are appointed by the commissioner to represent the interests of applicants assigned to the plan.
3. Ten voting members: eight representatives of participating insurance carriers, one of the Professional Insurance Agents of Connecticut and one of the Independent Insurance Agents Association of Connecticut. ✓
4. Ten voting members: six representatives of participating insurance carriers, two representatives of producer associations and two members appointed by the Governor to represent the public interest in the plan.

Why: 38a-329(a)(3) requires the plan to PROVIDE FOR A GOVERNING COMMITTEE COMPOSED OF TEN VOTING MEMBERS, SELECTED IN ACCORDANCE WITH THE PLAN OF OPERATION, TO OPERATE SUCH PLAN, PROVIDED EIGHT MEMBERS SHALL BE REPRESENTATIVES OF INSURANCE CARRIERS PARTICIPATING IN THE PLAN AND ONE MEMBER EACH SHALL BE REPRESENTATIVES OF THE PROFESSIONAL INSURANCE AGENTS OF CONNECTICUT AND THE INDEPENDENT INSURANCE AGENTS ASSOCIATION OF CONNECTICUT. Eight plus one plus one.

A contractor's CGL would NOT cover which of the following because of the 'your work' exclusion?

1. Medical payments under Coverage C for a visitor hurt on the job site
2. The cost to repair the contractor's own defective workmanship on the completed project ✓
3. Property damage to a neighboring building when the contractor's crane collapses
4. Bodily injury to a passerby struck by debris that fell from the contractor's scaffolding on the site

Why: The 'your work' exclusion bars coverage for damage to the insured's own completed work; the CGL is not a warranty of workmanship.

The policy provision that states the insurer's promise to pay covered losses is the:

1. Conditions
2. Insuring agreement ✓
3. Definitions
4. Declarations

Why: The insuring agreement is the insurer's core promise describing what coverage is provided in exchange for premium.

A homeowner's water heater bursts and water damages flooring. Under HO-3, this sudden and accidental discharge of water is:

1. Generally a covered named peril (accidental discharge or overflow of water) ✓
2. Covered only under Section ii liability if a guest is injured by the accidental discharge of water
3. Subject to a $500 sublimit that applies to all plumbing-related losses
4. Excluded as flood damage, since the exclusion applies to any water that escapes onto floors

Why: Sudden and accidental discharge or overflow of water from a plumbing system is a covered broad-form peril; gradual seepage and flood are excluded.

38a-686(a) sets the basic standards for personal risk insurance rates. What are they, and when is a rate excessive?

1. Rates may not be excessive, inadequate or unfairly discriminatory. A rate is excessive whenever it is unreasonably high for the insurance provided, whether the market is competitive or not, the state of the market bearing only on whether a rate is inadequate and so a threat to the solvency of the insurer using it.
2. Rates may not be excessive, inadequate or unfairly discriminatory. A rate in a competitive market is not excessive; a rate in a noncompetitive market, including one for insurance provided under sections 38a-328, 38a-329 and 38a-670, is excessive if it is unreasonably high for the insurance provided. ✓
3. Rates must be adequate, reasonable and not unfairly discriminatory. A rate is excessive if it produces an underwriting profit greater than the margin allowed in the insurer's filing, and a rate in a residual market plan established under section 38a-329 is deemed excessive if it exceeds the voluntary market rate for the same risk.
4. Rates may not be excessive, inadequate or unfairly discriminatory. A rate in a competitive market is excessive only if the commissioner first finds, after a hearing on the record, that a reasonable degree of competition does not exist in the market for the kind of insurance to which the rate applies.

Why: 38a-686(a) provides that RATES SHALL NOT BE EXCESSIVE, INADEQUATE OR UNFAIRLY DISCRIMINATORY, that A RATE IN A COMPETITIVE MARKET IS NOT EXCESSIVE, and that A RATE IN A NONCOMPETITIVE MARKET INCLUDING A RATE FOR INSURANCE PROVIDED PURSUANT TO SECTIONS 38a-328, 38a-329 AND 38a-670 IS EXCESSIVE IF IT IS UNREASONABLY HIGH FOR THE INSURANCE PROVIDED. 38a-686(a)(2) then makes a rate inadequate only where it is UNREASONABLY LOW FOR THE INSURANCE PROVIDED and either continued use WOULD ENDANGER SOLVENCY OF THE INSURER or its use HAS, OR, IF CONTINUED WILL HAVE, THE EFFECT OF DESTROYING COMPETITION OR CREATING A MONOPOLY. Note that the residual market plan in 38a-329 is expressly a NONCOMPETITIVE market for this purpose.

Which is an example of a direct loss?

1. Fire damage to the structure of a building ✓
2. Loss of rental income after a fire
3. Extra expense to operate at a temporary location
4. Spoiled food after a power outage

Why: Direct loss is immediate physical damage to property; the fire damage to the structure is direct, while income/expense impacts are indirect.

When a worker dies from a compensable injury, workers' compensation typically provides:

1. Death/survivor benefits to dependents plus a burial allowance ✓
2. Only reimbursement of medical bills
3. A lump sum equal to lifetime earnings to the estate
4. Nothing, because death ends the claim

Why: Death benefits provide income (survivor) benefits to the deceased worker's dependents and a statutory burial/funeral allowance.

Which of the following is NOT one of the four elements required to prove a negligent act?

1. Intent to cause harm ✓
2. A breach of that duty
3. Proximate cause
4. A legal duty owed

Why: Negligence requires duty, breach, proximate cause, and damages. Intent is not required—an intentional act is a different category (an intentional tort).

Under the PAP, a non-owned auto driven by the insured (e.g., a borrowed car) is covered for physical damage:

1. At the broadest level of coverage applying to any covered auto on the policy ✓
2. Only under Part A liability, since Part D reaches only scheduled autos
3. Only if the borrowed auto is added to the Declarations before the insured takes custody of it
4. Never, because Part D applies only to autos the insured owns

Why: Part D extends to a non-owned auto in the insured's custody, providing the broadest physical damage coverage that applies to any one auto shown on the policy.

What does 38a-323(f) require of a surplus lines insurer, and what follows if it fails?

1. It must comply with the section to be eligible to write surplus lines risks, must give premium billing notices at least thirty days in advance as any other insurer must, and on failure the insured gets renewal for a term of not less than one year with the privilege of pro-rata cancellation within sixty days.
2. It is exempt from the section altogether, surplus lines business being placed with insurers not authorised in this state; the broker who placed the risk must instead give the insured at least sixty days' notice of nonrenewal and is liable to the insured for a failure to give it.
3. It must comply with the section to be eligible to write surplus lines risks, must give premium billing notices at least sixty days in advance, and on failure the insured gets a ninety-day extension at the lower of the current or previous rate, unless notice came after the renewal date. ✓
4. It must comply with the section to be eligible to write surplus lines risks and must give premium billing notices at least ninety days in advance, and on failure the insured gets an extension of the policy for sixty days after the renewal or anniversary date at the previous year's rate.

Why: 38a-323(f)(1) makes compliance with the section a condition of a surplus lines insurer's eligibility to write risks under 38a-741 to 38a-744 and 38a-794. 38a-323(f)(2) provides that NOTWITHSTANDING THE PROVISIONS OF SUBSECTION (B), PREMIUM BILLING NOTICES SHALL BE PROVIDED BY ANY SURPLUS LINES INSURER TO THE INSURED AT LEAST SIXTY DAYS IN ADVANCE OF THE RENEWAL OR ANNIVERSARY DATE. 38a-323(f)(3) gives the insured AN EXTENSION OF THE POLICY FOR A PERIOD OF NINETY DAYS AFTER THE RENEWAL OR ANNIVERSARY DATE, EXCEPT THAT IF THE SURPLUS LINES INSURER FAILS TO PROVIDE THE REQUIRED NOTICE ON OR BEFORE THE RENEWAL OR ANNIVERSARY DATE, THE PROVISIONS OF SUBSECTION (C) SHALL APPLY, and sets the premium for the extension at THE CURRENT RATE OR THE PREVIOUS RATE, WHICHEVER IS LOWER.

From whom may the association recover the amount of a covered claim it has paid on their behalf, under 38a-844(d)?

1. An affiliate of the insolvent insurer, and an insured whose net worth on the date the covered claim was paid exceeded ten million dollars, in each case where their liability obligations to others were satisfied by the payment; a municipality and the Second Injury Fund are treated as insureds for this purpose like any other.
2. An affiliate of the insolvent insurer, and an insured whose net worth on the thirty-first of December of the year next preceding the insolvency exceeded fifty million dollars, in each case where their liability obligations to others were satisfied by the payment; a municipality and the Second Injury Fund are not such insureds. ✓
3. Any insured whose liability obligations to other persons were satisfied in whole or in part by the payment, whatever that insured's net worth, the association standing in the position of the insolvent insurer and being entitled to recover from the person whose liability it discharged by the payment of the claim.
4. An affiliate of the insolvent insurer only. The act gives no right of recovery against an insured whatever that insured's net worth, because 38a-844(a) provides that the association has no cause of action against any insured of the insolvent insurer for any sums it has paid out to that insured.

Why: 38a-844(d)(1) gives the association THE RIGHT TO RECOVER FROM THE FOLLOWING PERSONS THE AMOUNT OF ANY COVERED CLAIM PAID ON BEHALF OF SUCH PERSON: (A) ANY PERSON WHO IS AN AFFILIATE OF THE INSOLVENT INSURER AND WHOSE LIABILITY OBLIGATIONS TO OTHER PERSONS ARE SATISFIED IN WHOLE OR IN PART BY PAYMENTS MADE UNDER THIS CHAPTER; AND (B) ANY INSURED WHOSE NET WORTH ON DECEMBER THIRTY-FIRST OF THE YEAR NEXT PRECEDING THE DATE THE INSURER BECOMES AN INSOLVENT INSURER EXCEEDS FIFTY MILLION DOLLARS AND WHOSE LIABILITY OBLIGATIONS TO OTHER PERSONS ARE SATISFIED IN WHOLE OR IN PART BY PAYMENTS MADE UNDER SAID SECTIONS. FOR PURPOSES OF THIS SUBDIVISION, INSURED DOES NOT INCLUDE A MUNICIPALITY, AS DEFINED IN SECTION 7-148, OR THE SECOND INJURY FUND, ESTABLISHED IN SECTION 31-354. 38a-844(d)(2) adds a narrow exception for certain 501(c)(3) nonprofit corporations serving the elderly. The high-net-worth recovery is a statutory exception to the general rule in 38a-844(a) that the association has no cause of action against an insured of the insolvent insurer.

An automobile liability policy provides for binding arbitration of uninsured motorist claims. What does 38a-336(c) require of that provision?

1. It must include a provision for final determination of insurance coverage in the arbitration proceeding, and the proceeding is conducted by a single arbitrator if the amount in demand is forty thousand dollars or less and by a panel of three arbitrators if it is more. ✓
2. It must include a provision for final determination of insurance coverage in the arbitration proceeding, and the proceeding is conducted by a panel of three arbitrators in every case, the parties being free to agree in writing after the claim arises to submit it instead to a single arbitrator chosen by them.
3. It must reserve all questions of insurance coverage to the Superior Court, arbitration being confined to the amount of damages, and the proceeding is conducted by a single arbitrator if the amount in demand is forty thousand dollars or less and by a panel of three arbitrators if it is more.
4. It must include a provision for final determination of insurance coverage in the arbitration proceeding, and the proceeding is conducted by a single arbitrator selected by the Insurance Commissioner from a list maintained by the department, whatever the amount in demand may be.

Why: 38a-336(c) provides that each automobile liability policy issued on or after October 1, 1971, THAT CONTAINS A PROVISION FOR BINDING ARBITRATION SHALL INCLUDE A PROVISION FOR FINAL DETERMINATION OF INSURANCE COVERAGE IN SUCH ARBITRATION PROCEEDING, and that for a claim submitted on or after October 1, 1983, THE ARBITRATION PROCEEDING SHALL BE CONDUCTED BY A SINGLE ARBITRATOR IF THE AMOUNT IN DEMAND IS FORTY THOUSAND DOLLARS OR LESS OR BY A PANEL OF THREE ARBITRATORS IF THE AMOUNT IN DEMAND IS MORE THAN FORTY THOUSAND DOLLARS. Coverage as well as damages goes to the arbitrator, and forty thousand dollars exactly falls on the single-arbitrator side of the line.