Delaware Property & Casualty Insurance License, Practice Exams

A surety bond fundamentally differs from insurance because:

1. It is written without underwriting, because the surety relies on the premium charged to fund expected defaults
2. It transfers the risk of loss from the principal to the surety, which absorbs each default the way an insurer absorbs a claim and spreads that cost across all bonded principals through its rates
3. It pays first-party property losses to the principal when the project is damaged before completion
4. It is a three-party guarantee in which the surety guarantees the principal's obligation to the obligee, and the principal must reimburse the surety for losses ✓

Why: Surety is a three-party credit guarantee; the surety expects no net loss because the principal indemnifies it, unlike insurance which transfers risk.

In ocean marine insurance, Hull coverage insures:

1. Lost freight charges
2. The vessel itself and its machinery ✓
3. Liability to third parties
4. The cargo being carried

Why: Hull insurance covers physical damage to the vessel, including its structure, machinery, and equipment.

A peril is best described as:

1. A condition that increases the chance of loss
2. The reduction in value of property
3. The legal obligation to pay for a loss
4. The cause of a possible loss, such as fire or theft ✓

Why: A peril is the direct cause of a loss, such as fire, windstorm, or theft. A hazard increases the likelihood of a peril causing loss.

Which of the following is one of the four required elements of a legally enforceable contract?

1. Aleatory exchange
2. Subrogation
3. Indemnification
4. Consideration ✓

Why: The required elements of a contract are offer and acceptance, consideration, competent parties, and legal purpose.

A legal doctrine that reduces a plaintiff's recovery in proportion to their own degree of fault is:

1. Contributory negligence
2. Res ipsa loquitur
3. Comparative negligence ✓
4. Strict liability

Why: Comparative negligence apportions damages according to each party's percentage of fault rather than barring recovery entirely.

Which of the following risks would be considered an ideally insurable risk?

1. An investor's losses on the stock market during a general downturn
2. Expected gradual wear and tear on a roof over its normal service life
3. Losses to civilian property from a nationwide war or act of foreign enemies
4. A homeowner's loss from a sudden, accidental kitchen fire ✓

Why: A sudden, accidental fire is fortuitous, definite, measurable, and not catastrophic to the insurer, meeting the criteria for an insurable risk.

PAP Part C provides protection when the insured is injured by:

1. A driver whose liability limits exceed the state's required minimums by a wide margin
2. The insured's own negligence in a single-car crash
3. An uninsured or underinsured motorist who is legally liable ✓
4. A defective part installed by the auto's manufacturer

Why: Part C — Uninsured/Underinsured Motorists coverage pays damages the insured is legally entitled to recover from an owner/operator of an uninsured or underinsured vehicle.

An employer says the injury was caused by the employee's own intoxication. Who must prove what, under 19 Del. C. s 2353(b)?

1. The burden of proof is on the employer. Where the injury results from the employee's own intoxication, deliberate and reckless indifference to danger, wilful intention to injure or kill, or wilful failure to use a safety appliance or perform a statutory duty, the employee recovers neither damages nor compensation. ✓
2. The burden of proof is on the employee to show that the injury did not result from any of the disqualifying causes, the chapter being a substitute for the common law action in which contributory negligence would have been a defence; an employee who cannot discharge it recovers nothing under the chapter.
3. The burden is on the employer, but only as to injury from intoxication; as to deliberate and reckless indifference to danger, wilful intention to injure and wilful failure to use a safety appliance, the employee must show the absence of the disqualifying conduct because those matters are peculiarly within the employee's own knowledge.
4. The burden of proof is on the employer, and if it is discharged the employee loses the right to compensation but keeps the right to sue the employer at law, the disqualification being framed so that a worker whose conduct takes the case outside the chapter is remitted to the common law remedy instead.

Why: 19 Del. C. s 2353(b) provides that IF ANY EMPLOYEE BE INJURED AS A RESULT OF THE EMPLOYEE'S OWN INTOXICATION, BECAUSE OF THE EMPLOYEE'S DELIBERATE AND RECKLESS INDIFFERENCE TO DANGER, BECAUSE OF THE EMPLOYEE'S WILFUL INTENTION TO BRING ABOUT THE INJURY OR DEATH OF THE EMPLOYEE OR OF ANOTHER, BECAUSE OF THE EMPLOYEE'S WILFUL FAILURE OR REFUSAL TO USE A REASONABLE SAFETY APPLIANCE PROVIDED FOR THE EMPLOYEE OR TO PERFORM A DUTY REQUIRED BY STATUTE, THE EMPLOYEE SHALL NOT BE ENTITLED TO RECOVER DAMAGES IN AN ACTION AT LAW OR TO COMPENSATION OR MEDICAL, DENTAL, OPTOMETRIC, CHIROPRACTIC OR HOSPITAL SERVICE ... THE BURDEN OF PROOF UNDER THIS SUBSECTION SHALL BE ON THE EMPLOYER. Both remedies go, not just the compensation.

A false statement of a material fact on an application that, if known, would have changed the insurer's underwriting decision is a:

1. Warranty
2. Representation
3. Misrepresentation ✓
4. Estoppel

Why: A misrepresentation is a false statement; if it is material it can void the contract.

What must insurers report to the Division of Motor Vehicles under 21 Del. C. s 2118(l), and within what window?

1. Every cancellation or termination of a private passenger automobile policy, whenever it occurs during the life of the policy, within thirty days of its taking effect; the six months which the subsection mentions is the period within which the Division must act on the report by suspending the registration of the uninsured vehicle.
2. Any cancellations or terminations which are final and occur within the first twelve months after the policy is issued, that being the maximum term for which an insurance identification card may be issued where the premium has been paid annually; the Commissioner has no power to alter the period except by an amendment of the statute.
3. Any cancellations or terminations of private passenger automobile insurance under 18 Del. C. s 3904(a)(1) which are final and occur within the first six months after the policy is issued; the Commissioner may change the timeframe by regulation, and a registration may not be issued or renewed for a vehicle not covered by a complying policy. ✓
4. Nothing. The reporting duty in the subsection falls on the vehicle owner, who must offer proof of insurance on the Division's request; insurers report only the names of persons alleged to have been operating an uninsured vehicle, which they do under subsection (n)(3) of the section within thirty days on a prescribed form.

Why: 21 Del. C. s 2118(l) provides that A MOTOR VEHICLE REGISTRATION SHALL NOT BE ISSUED OR RENEWED FOR ANY VEHICLE NOT COVERED BY A VEHICLE INSURANCE POLICY MEETING THE REQUIREMENTS OF THIS TITLE. ALL INSURERS SHALL SEND TO THE DIVISION OF MOTOR VEHICLES NOTICE ... OF ANY CANCELLATIONS OR TERMINATIONS OF PRIVATE PASSENGER AUTOMOBILE INSURANCE UNDER s 3904(a)(1) OF TITLE 18 FOR ANY PRIVATE PASSENGER AUTOMOBILE POLICIES WHICH ARE FINAL AND OCCUR WITHIN THE FIRST 6 MONTHS AFTER SUCH POLICIES ARE ISSUED. THE INSURANCE COMMISSIONER MAY FURTHER CHANGE THE TIMEFRAME FOR NOTIFICATION BY REGULATION.

A contracting entity does not collect a certificate of insurance from its subcontractor. What follows under 19 Del. C. s 2311(a)(5)?

1. The contracting entity is deemed the employer of the subcontractor and of its employees, so that all their compensation rights lie against it directly; the certificate must be obtained and retained for three years from the date of the contract, and the failure to do so is what creates the deemed employment relationship.
2. Nothing follows automatically. The Department of Labor may assess the contracting entity the civil penalty in 19 Del. C. s 2374(d), but the compensation rights of the subcontractor's employees remain against the subcontractor as their employer, the certificate requirement being an administrative one only.
3. The contracting entity is not deemed the employer of that subcontractor or its employees, but is deemed to insure any workers' compensation claims arising under the chapter; the entity must obtain the notice of exemption or the certification of insurance and retain it for three years from the date of the contract. ✓
4. The contracting entity is deemed to insure claims arising under the chapter, and must retain the certificate for one year from the date of the contract; an entity which has retained it is neither the employer nor the insurer, and the claim lies against the subcontractor's own carrier in the ordinary way.

Why: 19 Del. C. s 2311(a)(5) provides that ANY CONTRACTING ENTITY SHALL OBTAIN FROM AN INDEPENDENT CONTRACTOR OR SUBCONTRACTOR AND SHALL RETAIN FOR 3 YEARS FROM THE DATE OF THE CONTRACT THE FOLLOWING: A NOTICE OF EXEMPTION OF EXECUTIVE OFFICERS OR LIMITED LIABILITY COMPANY MEMBERS AND/OR A CERTIFICATION OF INSURANCE IN FORCE UNDER THIS CHAPTER. IF THE CONTRACTING ENTITY SHALL FAIL TO DO SO, THE CONTRACTING ENTITY SHALL NOT BE DEEMED THE EMPLOYER OF ANY INDEPENDENT CONTRACTOR OR SUBCONTRACTOR OR THEIR EMPLOYEES BUT SHALL BE DEEMED TO INSURE ANY WORKERS' COMPENSATION CLAIMS ARISING UNDER THIS CHAPTER. Deemed to INSURE, not deemed to EMPLOY.

A farmer wants protection against widespread yield loss from drought across an entire growing season. The most appropriate coverage is:

1. Multiple Peril Crop Insurance (MPCI) through the RMA ✓
2. A state FAIR Plan covering the farm buildings and equipment
3. Private crop-hail insurance written on an acreage basis
4. A commercial umbrella policy

Why: MPCI covers broad yield losses from many natural perils, including drought, making it the appropriate choice over narrow crop-hail coverage.

Custom furnishings or equipment installed in a pickup or van (e.g., custom murals, special carpeting) under the unendorsed PAP are:

1. Covered automatically up to the actual cash value of the furnishings, with no endorsement needed
2. Covered in full with no dollar limit, because they are permanently attached to the vehicle
3. Generally excluded from Part D unless coverage is added by endorsement ✓
4. Covered only under Part A liability, and only if the equipment injures a passenger

Why: The PAP excludes custom furnishings or equipment in pickups and vans unless coverage is specifically added, often by endorsement.

Under the CGL, which limit applies to the cost of medical care for a third party regardless of fault?

1. General Aggregate
2. Personal and Advertising Injury Limit
3. Medical Expense Limit ✓
4. Each Occurrence Limit

Why: The Medical Expense Limit (Coverage C) caps no-fault medical payments per person for third parties.

Who is protected by the immunity in 18 Del. C. s 2409, and on what condition?

1. A person who files reports or furnishes information required by the chapter, absolutely and in all circumstances, the protection being needed precisely because a reporter cannot know at the time of reporting whether the belief on which the report rests will later be shown to have been justified.
2. A person who files reports or furnishes information required by the chapter or by the Commissioner, and the Commissioner and Department employees who publish reports or bulletins - in each case only in the absence of fraud or bad faith, and the furnishing must be without malice. ✓
3. An insurer that reports under s 2408, but not a practitioner, a producer or a member of the public who reports voluntarily, since the section is framed to protect the person on whom the chapter imposes the duty to report rather than the person who chooses to do so.
4. A person who furnishes information to the Bureau or to a law-enforcement official, in the absence of fraud or bad faith; information furnished to the National Association of Insurance Commissioners or to an anti-fraud organisation is outside the section, which names only public recipients.

Why: 18 Del. C. s 2409 provides that IN THE ABSENCE OF FRAUD OR BAD FAITH, NO PERSON SHALL BE SUBJECT TO CIVIL LIABILITY for filing reports WITHOUT MALICE or furnishing other information WITHOUT MALICE required by the chapter or by the Commissioner, covering information furnished to or received from law-enforcement officials, from other persons in the title, and in reports to THE INSURANCE DEPARTMENT, THE NATIONAL ASSOCIATION OF INSURANCE COMMISSIONERS OR ANY ORGANIZATION ESTABLISHED TO DETECT AND PREVENT FRAUDULENT INSURANCE ACTS. The same protection is extended to the Commissioner and Department employees acting without malice, and nothing in it abrogates any existing common law or statutory privilege.

18 Del. C. s 1714(a) and (b) deal with commissions and unlicensed persons. What do they forbid?

1. An insurer or producer paying a commission, service fee, brokerage or other valuable consideration to a person for selling, soliciting or negotiating insurance in this State where that person is required to be licensed and is not; the acceptance of such a payment is not itself made unlawful by the section.
2. An insurer or producer paying a commission, service fee, brokerage or other valuable consideration to a person for selling, soliciting or negotiating insurance in this State where that person is required to be licensed and is not; and that person accepting it. ✓
3. An insurer or producer paying any commission to a person who is not appointed as its agent under s 1715 of the title, whether or not that person holds a licence, and that person accepting such a payment for business placed with an insurer that has not appointed the person.
4. An insurer paying a commission to an unlicensed person; a producer who shares a commission with an unlicensed person is dealt with instead under the rebating provisions in ss 2303 and 2304 of the title rather than by this section.

Why: 18 Del. C. s 1714(a) forbids AN INSURANCE COMPANY OR INSURANCE PRODUCER to PAY A COMMISSION, SERVICE FEE, BROKERAGE OR OTHER VALUABLE CONSIDERATION TO A PERSON FOR SELLING, SOLICITING OR NEGOTIATING INSURANCE IN THIS STATE IF THAT PERSON IS REQUIRED TO BE LICENSED UNDER THIS CHAPTER AND IS NOT SO LICENSED. s 1714(b) is the mirror image: A PERSON SHALL NOT ACCEPT a commission, service fee, brokerage or other valuable consideration in the same circumstances. Both sides of the transaction are caught.

How does 19 Del. C. s 2326 treat an amputation, a part-finger loss, and the loss of three fingers of one hand?

1. Amputation at or above the ankle is the loss of a leg in every case, the foot having no separate schedule figure once it has been amputated; the first phalange of a thumb or finger is a quarter of that member; and three fingers of the same hand is the loss of the whole hand, compensated for the full 220 weeks the schedule allows for a hand.
2. Amputation to the ankle or any part of the foot is the loss of a foot, and above the ankle the loss of a leg; the first phalange of a thumb or finger is half that member; and three fingers, or two fingers and a thumb, of the same hand is half a hand, compensated for 110 weeks in every case, whether or not the schedule figures for the individual digits would come to more than that.
3. Amputation at any point below the knee is the loss of a foot and above it the loss of a leg; the first phalange of a thumb or finger is half that member and a loss of half of that phalange is a quarter; and the loss of more than one finger may never be compensated for more than the schedule allows for a hand, but three fingers is compensated digit by digit.
4. Amputation to the ankle or any part of the foot not including the toes is the loss of a foot, and above the ankle the loss of a leg; the first phalange of a thumb or finger is half that member and more than one phalange is the whole of it; and three fingers, or two fingers and a thumb, of the same hand is half a hand, compensated for 110 weeks or the schedule figure for those digits, whichever is greater. ✓

Why: 19 Del. C. s 2326(b): AMPUTATION TO THE ANKLE OR ANY PART OF THE FOOT, NOT INCLUDING THE TOES, SHALL BE CONSIDERED AS THE EQUIVALENT OF THE LOSS OF A FOOT. AMPUTATION ABOVE THE ANKLE SHALL BE CONSIDERED AS THE LOSS OF A LEG. Subsection (a): THE LOSS OF THE FIRST PHALANGE OF THE THUMB OR ANY FINGER SHALL BE CONSIDERED TO BE EQUAL TO THE LOSS OF ONE HALF OF SUCH THUMB OR FINGER ..., AND COMPENSATION FOR THE LOSS OF ONE HALF OF THE FIRST PHALANGE SHALL BE FOR ONE FOURTH OF THE PERIOD; THE LOSS OF MORE PHALANGES THAN 1 SHALL BE CONSIDERED AS THE LOSS OF THE ENTIRE FINGER OR THUMB, PROVIDED ... THAT IN NO CASE SHALL THE AMOUNT RECEIVED FOR MORE THAN 1 FINGER EXCEED THE AMOUNT PROVIDED ... FOR THE LOSS OF A HAND; THE LOSS OF 3 FINGERS OR 2 FINGERS AND A THUMB OF THE SAME HAND SHALL BE CONSIDERED AS THE LOSS OF ONE HALF OF THE HAND, AND COMPENSATION SHALL BE PAID ... FOR A PERIOD OF 110 WEEKS, OR ... FOR THE NUMBER OF WEEKS STATED IN THE ABOVE SCHEDULE FOR SUCH A LOSS, WHICHEVER IS GREATER.

What may a bail agent charge under 18 Del. C. s 4347?

1. A bail agent may charge whatever the market will bear, bail bond rates being outside the rating chapter; the five and ten per cent figures are guidance published by the Department rather than binding limits, and a written contract is required only where the agent takes collateral as security for the bond.
2. Surety bail bond rates are subject to chapter 25 and the premium may not exceed the filed rate, though an agent is free to charge less as a matter of competition; on a bond over $1,000 the filed premium must be not more than ten per cent, and administrative or service fees may be charged in addition if reasonable.
3. Surety bail bond rates are subject to chapter 25 and the premium may neither exceed nor fall below the filed rate; on a surety bail bond over $1,000 the total filed premium must be at least ten per cent and not more than twenty per cent, and on cash bail the total charge is not less than five nor more than ten per cent of the amount posted.
4. Rates are subject to chapter 25; it is unlawful to execute a bail bond without charging a premium, which may neither exceed nor fall below the filed rate. On a surety bond over $1,000 the filed premium is at least five and not more than ten per cent. On cash bail, twenty to thirty per cent. ✓

Why: 18 Del. C. s 4347(a): SURETY BAIL BOND RATES ARE SUBJECT TO THE PROVISIONS OF CHAPTER 25 OF THIS TITLE. Subsection (b): IT IS UNLAWFUL FOR A BAIL AGENT TO EXECUTE A BAIL BOND WITHOUT CHARGING AND COLLECTING A PREMIUM OR OTHER CHARGE THEREFOR, AND THE PREMIUM RATE ... MAY NOT EXCEED OR BE LESS THAN THE PREMIUM RATE AS FILED WITH AND APPROVED BY THE DEPARTMENT. WITH REGARD TO ANY SURETY BAIL BOND IN EXCESS OF $1,000, THE TOTAL FILED PREMIUM ... SHALL BE AT LEAST 5% AND NOT MORE THAN 10%. IT SHALL BE UNLAWFUL FOR A BAIL AGENT TO POST A SURETY BAIL BOND WITHOUT FIRST CHARGING AND RECEIVING AT LEAST 5% ... AND ENTERING INTO A WRITTEN CONTRACT SIGNED BY THE PARTIES ... Subsection (c) forbids any ADMINISTRATIVE FEE, SERVICE CHARGE, COMPANY OR AGENT FEE OR THE LIKE NOT FILED AND APPROVED. Subsection (f): THE TOTAL CHARGES OR COMMISSIONS FOR A CASH BAIL MAY NOT BE LESS THAN 20% OR MORE THAN 30% OF THE BAIL AMOUNT.

Under a Homeowners policy, the 'residence premises' definition primarily refers to:

1. Any dwelling the insured owns, including seasonal and rental homes
2. Any rental property the insured owns and insures separately
3. The dwelling where the insured resides as shown in the declarations ✓
4. Vacant land the insured holds for future construction

Why: Residence premises is the one- to four-family dwelling where the insured resides, as shown in the Declarations, including grounds and related structures.

Under the Building and Personal Property Coverage Form, which coverage applies to the building structure and permanently installed fixtures?

1. Coverage A — Building ✓
2. Coverage C — Personal Property of Others
3. Coverage B — Business Personal Property
4. Coverage D — Extra Expense

Why: Coverage A (Building) covers the described building, completed additions, fixtures, permanently installed machinery, and equipment.

How is the joint underwriting association under 18 Del. C. ss 4109 and 4110 constituted and governed?

1. It is created after a hearing and an order of the Commissioner under s 4108, and consists of all insurers authorized and engaged in writing fire and extended coverage in this State on a direct basis; membership is a condition of authority, and it is governed by a board of eleven directors elected annually by cumulative voting weighted by premiums written. ✓
2. It is created by the authorized insurers themselves as soon as the industry placement facility is established, without any order of the Commissioner; membership is voluntary, and the association is governed by a board of eleven directors elected annually by a simple majority of the members, each member having one vote whatever its premium volume.
3. It is created after a hearing and an order of the Commissioner, and consists of all insurers authorized to write any kind of property insurance in this State; membership is a condition of authority, and the association is governed by a board of seven directors appointed by the Commissioner from among the officers of the member companies.
4. It is created after a hearing and an order of the Commissioner and consists of all insurers writing fire and extended coverage here on a direct basis; membership is a condition of authority, and the association is governed by a board of eleven directors elected annually by cumulative voting, each member's vote being weighted by the number of policies rather than the premiums it wrote in the preceding calendar year.

Why: 18 Del. C. s 4109(a) provides that AFTER HEARING AND UPON PROMULGATION OF AN ORDER BY THE COMMISSIONER PURSUANT TO s 4108 ..., A JOINT UNDERWRITING ASSOCIATION SHALL BE CREATED CONSISTING OF ALL INSURERS AUTHORIZED TO WRITE AND ENGAGED IN WRITING WITHIN THIS STATE, ON A DIRECT BASIS, FIRE AND EXTENDED COVERAGE INSURANCE, INCLUDING INSURERS COVERING SUCH PERILS IN HOMEOWNERS AND COMMERCIAL MULTIPLE PERIL PACKAGE POLICIES. EVERY SUCH INSURER SHALL BE A MEMBER ... AS A CONDITION OF ITS AUTHORITY TO CONTINUE TO TRANSACT SUCH KINDS OF INSURANCE. Section 4110(c): THE ASSOCIATION SHALL BE GOVERNED BY A BOARD OF 11 DIRECTORS, ELECTED ANNUALLY BY CUMULATIVE VOTING BY THE MEMBERS ..., WHOSE VOTES IN SUCH ELECTION SHALL BE WEIGHED IN ACCORDANCE WITH EACH MEMBER'S PREMIUMS WRITTEN DURING THE PRECEDING CALENDAR YEAR. Section 4110(b) apportions writings, expenses, profits and losses on the same premium basis.

An injured interstate railroad worker wishes to recover for an on-the-job injury. Which law governs the claim, and on what basis?

1. FELA, requiring proof of employer negligence (fault-based) ✓
2. The Jones Act, which extends no-fault maintenance and cure to any employee working aboard a moving vehicle
3. FECA, on a no-fault basis for transportation workers
4. The LHWCA, on a no-fault basis for rail yard crews

Why: The Federal Employers' Liability Act (FELA) covers interstate railroad workers and is fault-based, requiring the worker to prove employer negligence rather than providing automatic no-fault benefits.

The National Flood Insurance Program (NFIP) is administered by which federal agency?

1. The U.S. Department of Agriculture
2. The Department of Housing and Urban Development
3. The Small Business Administration
4. The Federal Emergency Management Agency (FEMA) ✓

Why: The NFIP is administered by FEMA, an agency within the Department of Homeland Security.

What do Delaware Regulation 904 ss 8.1, 13.0 and 14.0 provide?

1. A licensee may not disclose a policy number or similar access number or code for a consumer's policy or transaction account to a nonaffiliated third party for telemarketing, direct mail or electronic mail marketing; it may not unfairly discriminate against a consumer who has opted out; and repeated failure to comply is grounds for investigation and enforcement as an unfair practice under 18 Del. C. ch. 23. ✓
2. A licensee may not disclose a policy number to any person other than a consumer reporting agency for any purpose whatever; it may charge a consumer who has opted out a reasonable fee reflecting the cost of servicing that consumer separately; and a single failure to comply with the regulation is itself an unfair practice under 18 Del. C. ch. 23, without any need to show that it was repeated.
3. A licensee may disclose a policy number to a nonaffiliated third party for marketing purposes if the consumer has not opted out; it may not unfairly discriminate against a consumer who has opted out; and repeated failure to comply is grounds for the suspension or revocation of the licensee's licence under Chapter 17 of the title rather than for any proceeding under the unfair practices chapter.
4. A licensee may not disclose a policy number or similar access code for marketing purposes, with no exceptions of any kind; it may not unfairly discriminate against a consumer who has opted out; and any failure to comply is referred by the Commissioner to the Delaware Insurance Fraud Prevention Bureau for investigation under 18 Del. C. ch. 24 of the title.

Why: Regulation 904 s 8.1 forbids a licensee to DISCLOSE, OTHER THAN TO A CONSUMER REPORTING AGENCY, A POLICY NUMBER OR SIMILAR FORM OF ACCESS NUMBER OR ACCESS CODE ... TO ANY NONAFFILIATED THIRD PARTY FOR USE IN TELEMARKETING, DIRECT MAIL MARKETING OR OTHER MARKETING THROUGH ELECTRONIC MAIL; s 8.2 then makes three exceptions, for a service provider marketing the licensee's own products, for a licensee who is a producer doing the same, and for a participant in an affinity programme identified to the customer. Section 13.0: A LICENSEE SHALL NOT UNFAIRLY DISCRIMINATE AGAINST ANY CONSUMER OR CUSTOMER BECAUSE THAT CONSUMER OR CUSTOMER HAS OPTED OUT. Section 14.0: REPEATED FAILURE TO COMPLY WITH THIS REGULATION WILL BE GROUNDS FOR INVESTIGATION AND ENFORCEMENT AS UNFAIR PRACTICES IN THE INSURANCE BUSINESS PURSUANT TO 18 Del.C. Ch. 23.

What is the Delaware Insurance Guaranty Association, and who belongs to it under 18 Del. C. ss 4206 and 4207?

1. A nonprofit corporation chartered by the State; membership is voluntary and an insurer which does not join is simply not entitled to the protection of the chapter for its own policyholders. The Board has not less than five nor more than nine members, all appointed by the Commissioner from among officers of member insurers.
2. A division of the Insurance Department; every authorized insurer contributes to it through the premium tax, and it is administered by the Commissioner personally with the assistance of a Board of between five and nine persons selected by member insurers, whose role is advisory only and whose selections need no approval.
3. A nonprofit unincorporated legal entity; all insurers defined as member insurers are and remain members as a condition of their authority to transact insurance here. It acts under a plan of operation approved under s 4209 and through a Board of not less than five nor more than nine persons, selected by member insurers subject to the commissioner's approval. ✓
4. A nonprofit unincorporated legal entity of which all member insurers are members as a condition of authority; it acts through a Board of not less than three nor more than seven persons appointed by the Governor and confirmed by the Senate, the Commissioner approving the plan of operation under which the Board acts.

Why: 18 Del. C. s 4206: THERE IS CREATED A NONPROFIT UNINCORPORATED LEGAL ENTITY TO BE KNOWN AS THE DELAWARE INSURANCE GUARANTY ASSOCIATION. ALL INSURERS, DEFINED AS MEMBER INSURERS IN s 4205 ..., SHALL BE AND REMAIN MEMBERS OF THE ASSOCIATION AS A CONDITION OF THEIR AUTHORITY TO TRANSACT INSURANCE IN THIS STATE. THE ASSOCIATION SHALL PERFORM ITS FUNCTIONS UNDER A PLAN OF OPERATION ESTABLISHED AND APPROVED UNDER s 4209 ... AND SHALL EXERCISE ITS POWERS THROUGH A BOARD OF DIRECTORS ESTABLISHED UNDER s 4207. Section 4207(a): THE BOARD ... SHALL CONSIST OF NOT LESS THAN 5 NOR MORE THAN 9 PERSONS ... SELECTED BY MEMBER INSURERS SUBJECT TO THE APPROVAL OF THE COMMISSIONER. Subsection (b): the Commissioner considers WHETHER ALL MEMBER INSURERS ARE FAIRLY REPRESENTED.

What powers does 18 Del. C. s 326(a) give the Commissioner as to witnesses and evidence, and what formality does it impose on delegating them?

1. The Commissioner may subpoena witnesses, administer oaths or affirmations, examine any individual under oath and take depositions, but may not compel the production of documents except on the order of the Superior Court; any delegation of the power of subpoena shall be in writing and filed with the Court.
2. The Commissioner may subpoena witnesses, administer oaths and require the production of documentary evidence, and may delegate any of those powers to an examiner orally or in writing, the section imposing no formality on the delegation of a power exercised during an examination.
3. The Commissioner may subpoena witnesses, administer oaths or affirmations, examine any individual under oath, take depositions and by subpoena duces tecum require the production of documentary and other evidence; any delegation by the Commissioner of the power of subpoena shall be in writing. ✓
4. The Commissioner may apply to the Superior Court for a subpoena requiring the attendance of witnesses and the production of documentary evidence, the power of subpoena being the Court's rather than the Commissioner's, and any delegation of the power to apply shall be in writing.

Why: 18 Del. C. s 326(a) provides that AS TO THE SUBJECT OF ANY EXAMINATION, INVESTIGATION OR HEARING BEING CONDUCTED BY THE COMMISSIONER, THE COMMISSIONER MAY SUBPOENA WITNESSES AND ADMINISTER OATHS OR AFFIRMATIONS, AND EXAMINE ANY INDIVIDUAL UNDER OATH, OR TAKE DEPOSITIONS, AND BY SUBPOENA DUCES TECUM MAY REQUIRE THE PRODUCTION OF DOCUMENTARY AND OTHER EVIDENCE. ANY DELEGATION BY THE COMMISSIONER OF POWER OF SUBPOENA SHALL BE IN WRITING. The subpoena power is the Commissioner's own; the Superior Court's role under s 326(c) is to enforce it when a person fails to obey.

What mental element does the chapeau of 18 Del. C. s 2407(a) require before conduct is a fraudulent insurance act?

1. The person must act knowingly, by act or omission; no further intent is required, because the injury the chapter is aimed at follows from the presentation of the false information itself and the section is framed accordingly.
2. The person must act with intent to injure, defraud or deceive; knowledge is not a separate element, since a person who intends to deceive necessarily knows the character of what is being presented to the insurer.
3. The person must act knowingly, by act or omission, and with intent to injure, defraud or deceive - both elements, and an omission counts as conduct. ✓
4. The person must act knowingly and wilfully, and with intent to injure, defraud or deceive, wilfulness being the element that distinguishes a fraudulent insurance act from the unfair practices defined in 18 Del. C. s 2304.

Why: 18 Del. C. s 2407(a) provides that IT SHALL BE A FRAUDULENT INSURANCE ACT FOR A PERSON TO KNOWINGLY, BY ACT OR OMISSION, WITH INTENT TO INJURE, DEFRAUD OR DECEIVE do the things listed. Knowledge AND intent, and BY ACT OR OMISSION. KNOWINGLY AND WILFULLY appears in the chapter, but in subsection (b), the practitioner limb, not in the chapeau.

The Department wishes to pay a reward to someone who reported insurance fraud. What does 18 Del. C. s 2411(f) permit, and what is the ceiling?

1. A reward drawn from the Delaware Insurance Fraud Auxiliary Fund, payable as of right to any individual whose report results in an admission or finding of fraud; the reward is fixed at fifteen per cent of the assessed administrative penalty and may not exceed $25,000, and no written complaint is required of the individual who reports.
2. A reward drawn from the assessed administrative penalty, payable in the Department's discretion to any person whose report results in an admission or finding of fraud, including an insurance carrier that was itself the victim of the fraud; the reward may not exceed the greater of the assessed penalty or $25,000.
3. A reward drawn from the assessed administrative penalty, payable in the Department's discretion to an individual whose report results in a conviction for insurance fraud in a court of this State; the reward may not exceed $10,000, that being the same ceiling as the penalty which may be assessed for each act.
4. A reward drawn from the assessed administrative penalty, payable in the Department's discretion to an individual whose report results in an admission or finding of fraud; the reward may not exceed the lesser of the assessed penalty or $25,000, and the reporter must sign a written complaint subjecting the person to 11 Del. C. s 1233. ✓

Why: 18 Del. C. s 2411(f) provides that THE DEPARTMENT MAY, IN ITS DISCRETION, PAY A REWARD DRAWN FROM THE ASSESSED ADMINISTRATIVE PENALTY TO AN INDIVIDUAL WHO REPORTS TO THE INSURANCE DEPARTMENT AN INCIDENT OF INSURANCE FRAUD WHICH RESULTS IN EITHER AN ADMISSION OR FINDING OF FRAUD. THE REWARD SHALL NOT EXCEED THE LESSER OF THE ASSESSED ADMINISTRATIVE PENALTY OR $25,000. The reporter MUST SIGN A WRITTEN COMPLAINT THAT SUBJECTS THE PERSON TO THE SANCTIONS OF s 1233 OF TITLE 11, and AN INSURANCE CARRIER THAT IS THE VICTIM OF INSURANCE FRAUD IS NOT ELIGIBLE TO RECEIVE A REWARD.

The 'collapse' coverage is provided under which dwelling/homeowners forms?

1. Every dwelling and homeowners form alike, the basic DP-1 included, as an additional coverage
2. Only the basic DP-1 form, where it appears as an additional coverage for abrupt falling down
3. Only Section ii liability, for a collapse that injures a guest
4. Broad and special forms (e.g., DP-2/DP-3, HO-2/HO-3), not the most basic form ✓

Why: Collapse is an additional coverage in the broad and special forms (such as DP-2, DP-3, HO-2, HO-3) but is not provided under the most basic DP-1.

How does the deductible election work under Delaware Regulation 801?

1. The insured elects at inception or renewal and the election is irrevocable for the duration of the policy, though it may be changed on renewal; the insurer administers claims as if there were no deductible, paying the claimant the deductible amount; and if no response is received within 30 days of mailing, the insured is deemed to have rejected. ✓
2. The insured elects at inception or renewal and may change the election at any time during the policy period on thirty days' notice; the claimant pays the deductible amount and recovers it from the employer, the insurer having no part in it; and silence for thirty days is deemed acceptance of the deductible endorsement rather than rejection of it.
3. The insurer elects whether to offer a deductible on each policy; where it does, the insured has thirty days to accept, and silence is deemed rejection. The insurer administers claims as if there were no deductible, but the employer pays the first-dollar amount directly to the medical provider rather than reimbursing the insurer for it afterwards.
4. The insured elects at inception or renewal, the election being irrevocable for the duration of the policy and for all subsequent renewals; the insurer pays the claimant and recovers from the employer; and failure to respond within thirty days is deemed an acceptance, since the statute requires the deductible to be offered rather than imposed.

Why: Delaware Regulation 801 s 3.1 defines DEDUCTIBLE as one ELECTED BY THE INSURED AT THE INCEPTION OR RENEWAL OF THE POLICY, SUCH ELECTION TO BE IRREVOCABLE FOR THE DURATION OF THE POLICY, in any amount BETWEEN $500 AND $5,000 (INCREMENTS OF $500), APPLIED SEPARATELY TO EACH OCCURRENCE REGARDLESS OF THE NUMBER OF EMPLOYEES, and APPLICABLE ONLY TO MEDICAL REIMBURSEMENTS AND DEATH BENEFITS. CLAIM ADMINISTRATION is BY THE INSURER IN THE SAME MANNER AS FOR POLICIES WITHOUT A DEDUCTIBLE. THIS SHALL INCLUDE PAYMENT BY THE INSURER TO THE CLAIMANT OF THE DEDUCTIBLE AMOUNT. Section 4.1.2 lets the employer CHANGE HIS/HER ELECTION ON RENEWAL. Section 4.2.3: IF NO RESPONSE IS RECEIVED WITHIN 30 DAYS OF THE MAILING DATE, THE INSURED WILL BE DEEMED TO HAVE REJECTED THE DEDUCTIBLE ENDORSEMENT, on proof of mailing.

Under 18 Del. C. s 321(c), what are the two deadlines that follow the completion of an examination?

1. No later than thirty days after completion the examiner in charge files a verified written report under oath; on receipt the Department transmits it to the company with notice affording a reasonable opportunity of not more than sixty days to make a written submission or rebuttal on the matters in it.
2. No later than sixty days after completion the examiner in charge files a verified written report under oath; the company then has ninety days to make a written submission or rebuttal, that being the same period s 323 allows for an application to the Commissioner for a hearing on a matter.
3. No later than sixty days after the examination begins the examiner in charge files an interim report; the final report follows within thirty days of completion, and the company's opportunity to make a written submission or rebuttal runs from the filing of that final report.
4. No later than sixty days after completion the examiner in charge files a verified written report under oath; on receipt the Department transmits it to the company with notice affording a reasonable opportunity of not more than thirty days to make a written submission or rebuttal. ✓

Why: 18 Del. C. s 321(c) provides that NO LATER THAN 60 DAYS FOLLOWING THE COMPLETION OF THE EXAMINATION, THE EXAMINER IN CHARGE SHALL FILE WITH THE DEPARTMENT A VERIFIED WRITTEN REPORT OF EXAMINATION UNDER OATH. UPON RECEIPT OF THE VERIFIED REPORT, THE DEPARTMENT SHALL TRANSMIT THE REPORT TO THE COMPANY EXAMINED, TOGETHER WITH A NOTICE WHICH SHALL AFFORD THE COMPANY EXAMINED A REASONABLE OPPORTUNITY OF NOT MORE THAN 30 DAYS TO MAKE A WRITTEN SUBMISSION OR REBUTTAL. Sixty to file, thirty to rebut.

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.

An employee commuting to work in their own car is injured before arriving at the job site. Under the general 'going-and-coming' rule, this injury is usually:

1. Covered by FECA, which reaches any employee injured while traveling to a workplace
2. Compensable, because the drive to the job site is the first act performed for the employer's benefit each day
3. Not compensable, because ordinary commuting is not in the course of employment ✓
4. Compensable only under Part Two of the workers compensation policy

Why: Under the going-and-coming rule, ordinary commuting to and from work generally does not arise in the course of employment and is not compensable, with limited exceptions.

What must a disapproval order say under 18 Del. C. s 2507, and what hearing rights follow?

1. The order must specify in what respects the filing fails to meet the chapter and, for filings previously in effect, state when it shall be deemed no longer effective; a hearing will be granted within twenty days after a written request by the insurer or rating organisation, a final order issues within sixty days after the whole record is presented, and the order does not affect any contract or policy made before the stated date. ✓
2. The order need not give reasons, the Commissioner's judgment on a rate being unreviewable; a hearing will be granted within twenty days of a written request, and the final order issues within sixty days of the hearing itself rather than of the presentation of the record, and takes effect retrospectively on every policy issued under the disapproved filing.
3. The order must specify in what respects the filing fails; a hearing will be granted within sixty days after a written request, and a final order issues within twenty days after the record is presented. A filing which has not yet gone into effect may take effect pending the hearing, the disapproval operating only for the future.
4. The order must specify in what respects the filing fails and state when it ceases to be effective; no hearing is available from a disapproval, the insurer's remedy being an appeal to the Superior Court under 18 Del. C. s 2530(d) within thirty days after the Commissioner's notice of the order.

Why: 18 Del. C. s 2507 requires the Commissioner, on finding a filing does not meet the chapter, TO ISSUE AN ORDER DISAPPROVING THE FILING AND STATE THAT A HEARING WILL BE GRANTED WITHIN 20 DAYS AFTER REQUEST IN WRITING BY THE INSURER OR RATING ORGANIZATION WHICH MADE SUCH FILING. THE COMMISSIONER'S ORDER SHALL SPECIFY IN WHAT RESPECTS THE COMMISSIONER FINDS THAT SUCH FILING FAILS TO MEET THE REQUIREMENTS ... AND, FOR FILINGS PREVIOUSLY IN EFFECT, STATE WHEN, WITHIN A REASONABLE PERIOD THEREAFTER, SUCH FILING SHALL BE DEEMED NO LONGER EFFECTIVE. IF A RATE FILING HAS NOT GONE INTO EFFECT AND IS SCHEDULED FOR A FORMAL ADMINISTRATIVE HEARING ..., THE FILING MAY NOT BECOME EFFECTIVE UNTIL A FINAL ORDER IS ISSUED. A FINAL ORDER SHALL BE ISSUED WITHIN 60 DAYS AFTER THE ENTIRE RECORD OF THE HEARING ... HAS BEEN PRESENTED TO THE COMMISSIONER ... THE ORDER SHALL NOT AFFECT ANY CONTRACT OR POLICY MADE OR ISSUED PRIOR TO THE EXPIRATION OF THE PERIOD SET FORTH IN THE ORDER.

A penalty is unpaid after all rights of appeal have been waived or exhausted. What does 18 Del. C. s 2411(c) allow?

1. A civil action by the Commissioner in the Court of Chancery for collection of the penalty, begun by a petition for enforcement to which the Department attaches the record of the hearing; the Court may then make such order as it thinks fit, including an order enjoining the conduct complained of.
2. The suspension or revocation of the person's licence under Chapter 17 of the title, that being the chapter's only sanction for nonpayment, since a penalty assessed administratively is not a judgment and cannot be collected by an action brought in any court of this State.
3. A referral to the Attorney General, who may bring an action for collection in the name of the State; the Commissioner has no standing to sue in the Commissioner's own name, and interest, attorneys' fees and costs are not recoverable in such an action.
4. A civil action by the Commissioner in the Superior Court for collection of the penalty, including interest, attorneys' fees and costs, begun by a praecipe and complaint to which the Department must attach a certified copy of the consent order or other order of the Commissioner. ✓

Why: 18 Del. C. s 2411(c) provides that IN THE EVENT OF NONPAYMENT OF THE ADMINISTRATIVE PENALTY AFTER ALL RIGHTS OF APPEAL HAVE BEEN WAIVED OR EXHAUSTED, A CIVIL ACTION MAY BE BROUGHT BY THE COMMISSIONER IN SUPERIOR COURT FOR THE COLLECTION OF THE ADMINISTRATIVE PENALTY, INCLUDING INTEREST, ATTORNEYS' FEES AND COSTS. Paragraph (c)(1) requires A PRAECIPE AND COMPLAINT and provides that THE DEPARTMENT SHALL ATTACH TO THE COMPLAINT A CERTIFIED COPY OF THAT CONSENT ORDER OR OTHER ORDER OF THE COMMISSIONER.

What must precede an administrative penalty under 18 Del. C. s 329(a), and what may the Commissioner weigh in fixing the amount?

1. A finding, after notice and hearing conducted under chapter 3, that the person, insurer or holding company violated the title or a regulation; the amount is to be reasonable and appropriate in view of the facts, and the Commissioner may weigh the nature of the violation, the loss, the intent, the damage and any corrective efforts. ✓
2. A finding, after notice and hearing conducted under chapter 3, that the person, insurer or holding company violated the title or a regulation; the amount is fixed by a schedule the Commissioner adopts by regulation, the section leaving the Commissioner no discretion to vary it in view of the facts of the particular violation.
3. A conviction in a civil or criminal proceeding arising out of the same conduct, the administrative penalty being available only in addition to a penalty, fine or sentence a court has already ordered, and being fixed in view of the facts and circumstances surrounding the violation as found by that court.
4. A finding, after notice and hearing, that the person violated the title, and a recommendation from a hearing officer as to the amount; the Commissioner may not depart from that recommendation, which is the section's principal safeguard against an arbitrary penalty being imposed.

Why: 18 Del. C. s 329(a) allows the Commissioner, UPON A FINDING AFTER NOTICE AND HEARING CONDUCTED IN ACCORDANCE WITH THE PROVISIONS OF THIS CHAPTER, THAT ANY PERSON, INSURER OR INSURANCE HOLDING COMPANY HAS VIOLATED ANY PROVISION OF THIS TITLE OR ANY REGULATION IMPLEMENTING SAID TITLE, to IMPOSE OR ORDER AN ADMINISTRATIVE PENALTY IN AN AMOUNT OF MONEY THAT IS REASONABLE AND APPROPRIATE IN VIEW OF THE FACTS AND CIRCUMSTANCES SURROUNDING THE VIOLATION. In fixing it the Commissioner MAY TAKE INTO CONSIDERATION SUCH MATTERS AS THE NATURE OF THE VIOLATION, THE AMOUNT OF LOSS RESULTING FROM THE VIOLATOR'S CONDUCT, THE INTENT OF THE VIOLATOR, THE DAMAGES CAUSED BY THE VIOLATION, ANY EFFORTS MADE BY THE VIOLATOR TO CORRECT THE VIOLATION AND PREVENT A REOCCURRENCE, AND THE RECOMMENDATIONS OF ANY HEARING OFFICER - a recommendation the Commissioner weighs, not one that binds.

The PAP towing and labor costs coverage pays for labor:

1. For accident-related medical transport
2. Only when performed at the place of disablement ✓
3. Anywhere repairs are needed regardless of location
4. For routine maintenance at the shop

Why: Towing and labor costs coverage pays towing plus labor, but only labor performed at the place where the vehicle was disabled.

How does Delaware Regulation 904 s 1.6 distinguish a CONSUMER from a CUSTOMER?

1. A consumer is an individual who seeks to obtain, obtains or has obtained an insurance product or service for personal, family or household purposes and about whom the licensee has nonpublic personal information; a customer is a consumer who has a customer relationship with the licensee, that is, a continuing relationship. ✓
2. A consumer is an individual who has applied for but not yet obtained an insurance product; a customer is an individual who has obtained one. The distinction turns on whether the policy has been issued, so that an applicant becomes a customer at the moment coverage incepts under the policy applied for.
3. A consumer is any individual about whom the licensee holds nonpublic personal financial information, including one who obtains a product for business purposes; a customer is a consumer who obtains it for personal, family or household purposes and so falls within the notice and opt out requirements that the regulation imposes.
4. A consumer is an individual dealing with a licensee that is an insurer; a customer is an individual dealing with a licensee that is a producer or broker. The regulation uses the two words to mark which of the two kinds of licensee owes the notice duties in any particular transaction.

Why: Regulation 904 s 1.6 defines CONSUMER as AN INDIVIDUAL WHO SEEKS TO OBTAIN, OBTAINS OR HAS OBTAINED AN INSURANCE PRODUCT OR SERVICE FROM A LICENSEE THAT IS TO BE USED PRIMARILY FOR PERSONAL, FAMILY OR HOUSEHOLD PURPOSES, AND ABOUT WHOM THE LICENSEE HAS NONPUBLIC PERSONAL INFORMATION. CUSTOMER MEANS A CONSUMER WHO HAS A CUSTOMER RELATIONSHIP WITH A LICENSEE, and CUSTOMER RELATIONSHIP MEANS A CONTINUING RELATIONSHIP ... UNDER WHICH THE LICENSEE PROVIDES ONE OR MORE INSURANCE PRODUCTS OR SERVICES. Every customer is a consumer; not every consumer is a customer, and only customers get the ANNUAL notice.

How is the amount of an administrative penalty determined under 18 Del. C. s 2411(b)?

1. By the financial loss caused, as that term is defined in s 2403(f), the penalty being fixed at the amount of the loss subject to the statutory ceiling, so that a fraudulent act which causes no loss at all attracts no penalty however culpable it may have been.
2. By a schedule of penalties which the Commissioner is required to adopt by regulation under the chapter, the schedule fixing an amount for each paragraph of s 2407(a) and permitting a departure from it only on the written findings of the hearing officer.
3. By the nature, circumstances, extent and gravity of the act or acts of insurance fraud, any prior history of such act or acts, the degree of culpability, and such other matters as justice may require - the last of those being open-ended. ✓
4. By the number of separate acts proved, multiplied by the statutory maximum, the Commissioner having no discretion to assess a lesser sum once a violation has been established to the required standard at a hearing held under the chapter.

Why: 18 Del. C. s 2411(b) provides that ASSESSMENT OF THE ADMINISTRATIVE PENALTY SHALL BE DETERMINED BY THE NATURE, CIRCUMSTANCES, EXTENT AND GRAVITY OF THE ACT OR ACTS OF INSURANCE FRAUD, ANY PRIOR HISTORY OF SUCH ACT OR ACTS, THE DEGREE OF CULPABILITY AND SUCH OTHER MATTERS AS JUSTICE MAY REQUIRE. It is a discretionary assessment against named factors, and the last of them is open-ended.

What penalties does 18 Del. C. s 2530 provide for a violation of the rating chapter?

1. Not more than $1,000 for each violation, or not more than $5,000 for each wilful violation; the Commissioner may suspend a licence immediately on a failure to comply with an order, the pendency of an appeal being no bar, and may impose a penalty without a hearing where the violation is admitted in writing by the person charged.
2. Not more than $500 for each violation whether wilful or not, the chapter drawing no distinction; the Commissioner may suspend a licence for failure to comply with an order once the time for appeal has expired, and a party aggrieved by an order may request a hearing within ten days after the Commissioner's notice of it.
3. Not more than $500 for each violation, or $1,000 for each wilful one, and those penalties are in substitution for any other penalty provided by law; a suspension may be imposed without a written order where the person charged does not appear at the hearing, and an aggrieved party has thirty days to request a hearing.
4. Not more than $500 for each violation, or not more than $1,000 for each wilful violation, in addition to any other penalty provided by law; the Commissioner may suspend the licence of a rating organisation or insurer which fails to comply with an order, but not until the time for appeal has expired or, if appealed, the order has been affirmed. No penalty and no suspension except upon a written order stating findings after a hearing on not less than ten days' notice. ✓

Why: 18 Del. C. s 2530(a): THE COMMISSIONER MAY, IF HE OR SHE FINDS THAT ANY PERSON OR ORGANIZATION HAS VIOLATED THIS CHAPTER, IMPOSE A PENALTY OF NOT MORE THAN $500 FOR EACH SUCH VIOLATION, BUT IF HE OR SHE FINDS SUCH VIOLATION TO BE WILFUL, HE OR SHE MAY IMPOSE A PENALTY OF NOT MORE THAN $1,000 FOR EACH SUCH VIOLATION IN ADDITION TO ANY OTHER PENALTY PROVIDED BY LAW. Subsection (b) allows suspension for non-compliance with an order but NOT UNTIL TIME PRESCRIBED FOR APPEAL THEREFROM HAS EXPIRED OR, IF APPEALED, UNTIL SUCH ORDER HAS BEEN AFFIRMED. Subsection (c): NO PENALTY SHALL BE IMPOSED AND NO LICENSE SHALL BE SUSPENDED OR REVOKED EXCEPT UPON A WRITTEN ORDER OF THE COMMISSIONER STATING HIS OR HER FINDINGS, MADE AFTER A HEARING HELD UPON NOT LESS THAN 10 DAYS' WRITTEN NOTICE. Subsection (d) gives 30 DAYS AFTER COMMISSIONER'S NOTICE to request a hearing under s 2507.

A person is dissatisfied with a decision of the inspection bureau. What do 18 Del. C. ss 4112 and 4113 provide?

1. An appeal lies to the Superior Court within thirty days of the action or decision, the Commissioner having no appellate jurisdiction over the inspection bureau; and the bureau and its employees are liable in the ordinary way for a negligently prepared inspection report, the subchapter conferring immunity only on the Commissioner.
2. An appeal lies to the Commissioner within thirty days of the action or decision; after a hearing on not less than ten days' written notice the Commissioner may approve or disapprove it, or direct the bureau or facility to reassign and place the application under the plan. No liability and no cause of action arises against insurers, the bureau, the facility, the association, their agents or employees, or the Commissioner, for inspections or statements in reports and communications. ✓
3. An appeal lies to the Commissioner within ten days of the action or decision, and is heard on not less than thirty days' written notice; the Commissioner may approve or disapprove the decision but may not direct that an application be reassigned, that being a matter for the industry placement facility under its own plan of operation.
4. An appeal lies to the Commissioner within thirty days, and is decided on the papers without a hearing; no liability arises against the bureau or the facility for statements in their reports, but the immunity does not extend to the Commissioner or to insurers, who remain answerable for what they say about an applicant's property.

Why: 18 Del. C. s 4112 provides that ANY PERSON AGGRIEVED BY ANY ACTION OR DECISION OF THE INSPECTION BUREAU OR INDUSTRY PLACEMENT FACILITY MAY APPEAL TO THE COMMISSIONER WITHIN 30 DAYS FROM THE ACTION OR THE DECISION. THE COMMISSIONER SHALL AFTER HEARING HELD UPON NOT LESS THAN 10 DAYS WRITTEN NOTICE ... ISSUE AN ORDER APPROVING THE ACTION OR DECISION, DISAPPROVING [IT] OR DIRECTING THE INSPECTION BUREAU OR THE INDUSTRY PLACEMENT FACILITY TO REASSIGN AND PLACE THE APPLICATION PURSUANT TO SAID PLAN. Section 4113: THERE SHALL BE NO LIABILITY ON THE PART OF, AND NO CAUSE OF ACTION OF ANY NATURE SHALL ARISE AGAINST, INSURERS, THE INSPECTION BUREAU, THE INDUSTRY PLACEMENT FACILITY, THE JOINT UNDERWRITING ASSOCIATION OR THEIR AGENTS OR EMPLOYEES, OR THE COMMISSIONER ..., FOR ANY INSPECTIONS UNDERTAKEN OR STATEMENTS MADE BY THEM IN ANY REPORTS AND COMMUNICATIONS CONCERNING THE PROPERTY TO BE INSURED.

The primary purpose of the 30-day NFIP waiting period is to:

1. Give FEMA time to confirm that the writing agent has finished the required flood training course
2. Allow an adjuster time to inspect the home and photograph its lowest floor before coverage attaches
3. Match the 30-day notice period TRIA requires before terrorism coverage may be added to a policy
4. Prevent consumers from buying flood coverage only when a flood is imminent (adverse selection) ✓

Why: The waiting period reduces adverse selection by preventing purchase of coverage immediately before a known or imminent flood.

Compensation for pain and suffering, which cannot be precisely measured, is classified as:

1. Special damages
2. General damages ✓
3. Liquidated damages
4. Punitive damages

Why: General damages cover intangible, non-economic losses such as pain, suffering, and disfigurement.

Which of these is a permissible ground of cancellation under 18 Del. C. s 4123?

1. Discovery of any act or omission on the part of the named insured which increases any hazard insured against, whether wilful, reckless or merely negligent, the section being concerned with the state of the risk the insurer has accepted rather than with the degree of fault of the person whose conduct has altered it.
2. The filing of two or more claims against the policy during the twelve months immediately preceding the notice of cancellation, whether or not the claims were paid and whatever their cause, claims experience being the ordinary measure of a residential risk and one which applies alike to a cancellation and to a nonrenewal.
3. A determination by the insurer that the continuation of the policy would be inconsistent with its own underwriting standards as filed with the Commissioner, a change in those standards being a change in the risk the insurer is willing to carry within the meaning of the section.
4. Discovery of wilful or reckless acts or omissions on the part of the named insured which increase any hazard insured against. ✓

Why: 18 Del. C. s 4123 lists seven reasons: (1) NONPAYMENT OF PREMIUM; (2) DISCOVERY OF FRAUD OR MATERIAL MISREPRESENTATION MADE BY OR WITH THE KNOWLEDGE OF THE NAMED INSURED IN OBTAINING THE POLICY, CONTINUING THE POLICY OR IN PRESENTING A CLAIM; (3) DISCOVERY OF WILFUL OR RECKLESS ACTS OR OMISSIONS ON THE PART OF THE NAMED INSURED WHICH INCREASE ANY HAZARD INSURED AGAINST; (4) THE OCCURRENCE OF A CHANGE IN THE RISK WHICH SUBSTANTIALLY INCREASES ANY HAZARD INSURED AGAINST AFTER ... COVERAGE HAS BEEN ISSUED OR RENEWED; (5) A VIOLATION OF ANY LOCAL FIRE, HEALTH, SAFETY, BUILDING OR CONSTRUCTION REGULATION OR ORDINANCE ... WHICH SUBSTANTIALLY INCREASES ANY HAZARD INSURED AGAINST; (6) A DETERMINATION OF THE INSURANCE COMMISSIONER THAT THE CONTINUATION OF THE POLICY WOULD PLACE THE INSURER IN VIOLATION OF THE INSURANCE LAWS OF THIS STATE; (7) REAL PROPERTY TAXES ... DELINQUENT FOR 2 OR MORE YEARS AND ... STILL DELINQUENT at the time the notice is issued. Negligence alone is not among them.

Personal watercraft, such as jet skis, are typically:

1. Insured under a crop-hail policy when stored on farm premises
2. Covered automatically for liability and physical damage under a homeowners policy with no dollar limit
3. Covered only by an NFIP flood policy while moored at a dock
4. Excluded or sharply limited under a homeowners policy and better insured under a watercraft or boatowners policy ✓

Why: Homeowners forms severely limit or exclude watercraft liability and physical damage, so personal watercraft are best covered by a separate watercraft policy.

What immunities does 18 Del. C. s 330 create?

1. No cause of action or liability arises against the Commissioner, the Commissioner's authorised representatives or any appointed examiner for statements made or conduct performed under the chapter, whether or not in good faith; a person communicating information to them is protected only where the Commissioner has first required it by subpoena issued under s 326.
2. No cause of action or liability arises against any person for communicating or delivering information to the Commissioner in good faith; the Commissioner and the examiners are not protected by the section and must rely on the common law immunity of a public officer acting within the scope of an office.
3. No cause of action or liability arises against the Commissioner or an appointed examiner for conduct performed in good faith, and the section abrogates every common law and statutory privilege previously enjoyed by those persons, replacing them with the single statutory immunity it creates.
4. No cause of action or liability arises against the Commissioner, the Commissioner's authorised representatives or any appointed examiner for statements made or conduct performed in good faith under the chapter; nor against any person for communicating or delivering information to them in good faith and without fraudulent intent or intent to deceive. ✓

Why: 18 Del. C. s 330(a) protects THE COMMISSIONER, THE COMMISSIONER'S AUTHORIZED REPRESENTATIVES OR ANY EXAMINER APPOINTED BY THE COMMISSIONER FOR ANY STATEMENTS MADE OR CONDUCT PERFORMED IN GOOD FAITH WHILE CARRYING OUT THE PROVISIONS OF THIS CHAPTER. s 330(b) protects ANY PERSON FOR THE ACT OF COMMUNICATING OR DELIVERING INFORMATION OR DATA TO THE COMMISSIONER ... PURSUANT TO AN EXAMINATION, INVESTIGATION, OR REGULATORY INQUIRY ..., IF SUCH AN ACT ... WAS PERFORMED IN GOOD FAITH AND WITHOUT FRAUDULENT INTENT OR INTENT TO DECEIVE. s 330(c) expressly does NOT abrogate or modify any existing common law or statutory privilege, and s 330(d) awards attorney's fees and costs to a protected person who prevails in a libel, slander or other tort action that was not substantially justified - a proceeding being SUBSTANTIALLY JUSTIFIED if it had a reasonable basis in law or in fact when it was initiated.

A combined single limit (CSL) of $300,000 means:

1. One total limit covering both bodily injury and property damage per occurrence ✓
2. A $300,000 annual aggregate that caps all occurrences during the policy year combined
3. Separate $300,000 limits, one applying to bodily injury and one to property damage
4. A $300,000 cap on any one injured person

Why: A combined single limit provides one shared limit for both bodily injury and property damage arising from a single occurrence.

How is a cease and desist order made under 18 Del. C. s 2304(22) enforced and reviewed, and what may a court award?

1. Enforcement by petition to the court of chancery, begun within 30 days of the order, with the record transmitted in 30 days and reversal only for prejudice or clearly erroneous findings; other appeals go to the Superior Court on the record; economic loss is reimbursed with interest. ✓
2. Only the Commissioner may petition the Superior Court for enforcement, within 60 days of the order; the Court retries the facts de novo; the aggrieved person may recover treble damages and attorney's fees; and the insurer may be enjoined from writing new business in Delaware for up to 1 year.
3. The order is self-executing and needs no court enforcement; the respondent may appeal to the Court of Chancery within 20 days on the record; the Court may award punitive damages of up to $100,000; and the Commissioner may suspend the insurer's certificate of authority pending the appeal.
4. Enforcement is by the Attorney General in the Superior Court within 90 days; review is by writ of certiorari to the Supreme Court; no monetary award is available under s 2304(22), the aggrieved person's remedy being a separate civil action for damages.

Why: 18 Del. C. s 2304(22)j: any complainant, aggrieved party, respondent, intervenor or the Commissioner may obtain an order of the Court of Chancery for enforcement by petition; the Commissioner transmits the record within 30 days of service or filing; the Court may reverse or modify if substantial rights of the petitioner have been prejudiced or the Department's findings are clearly erroneous, and may grant temporary relief, enforce, set aside or remand; a proceeding must be initiated within 30 days after a copy of the order is received. Subdivision l: the Superior Court of the county where the violation occurred hears other appeals, on the record only. Subdivision m: a respondent found to have caused economic loss must reimburse or refund it with reasonable interest.

What does 18 Del. C. s 4213 provide about detecting and preventing insolvencies, and what does s 4214 require of the Board?

1. The Board must recommend to the Commissioner on detection and prevention at least annually, and its reports are public documents open to inspection by any member insurer; a report on the history and causes of an insolvency is optional, and the Association files a financial report not later than December 31 of each year.
2. The Board may recommend to the Commissioner on detection and prevention and on any matter germane to a member's solvency - such reports not being public documents; it shall report on the history and causes of any insolvency in which the Association paid. The Association files a financial report by June 30. ✓
3. The Commissioner alone is charged with detecting and preventing insolvencies, the Board's role being to pay claims once insolvency has occurred; the Board files a financial report not later than June 30 each year, and the Association is exempt from examination, being a creature of statute rather than an insurer.
4. The Board may recommend to the Commissioner on detection and prevention, and its reports are not public documents; the Commissioner has no reciprocal duty to report to the Board, the flow of information under the chapter running only one way, and the Association's financial report is due not later than June 30 each year.

Why: 18 Del. C. s 4213: (1) THE BOARD OF DIRECTORS MAY, UPON MAJORITY VOTE, MAKE RECOMMENDATIONS TO THE COMMISSIONER FOR THE DETECTION AND PREVENTION OF INSURER INSOLVENCIES ...; (3) IT SHALL BE THE DUTY OF THE COMMISSIONER TO REPORT TO THE BOARD OF DIRECTORS WHEN THE COMMISSIONER HAS REASONABLE CAUSE TO BELIEVE THAT ANY MEMBER INSURER ... MAY BE INSOLVENT OR IN A FINANCIAL CONDITION HAZARDOUS TO THE POLICYHOLDERS OR THE PUBLIC; (4) THE BOARD ... MAY ... MAKE REPORTS AND RECOMMENDATIONS TO THE COMMISSIONER UPON ANY MATTER GERMANE TO THE SOLVENCY, LIQUIDATION, REHABILITATION OR CONSERVATION OF ANY MEMBER INSURER. SUCH REPORTS AND RECOMMENDATIONS SHALL NOT BE CONSIDERED PUBLIC DOCUMENTS; (6) THE BOARD ... SHALL, AT THE CONCLUSION OF ANY INSURER INSOLVENCY IN WHICH THE ASSOCIATION WAS OBLIGATED TO PAY COVERED CLAIMS, PREPARE A REPORT ON THE HISTORY AND CAUSES ... Section 4214: THE ASSOCIATION SHALL BE SUBJECT TO EXAMINATION AND REGULATION BY THE COMMISSIONER. THE BOARD ... SHALL SUBMIT, NOT LATER THAN JUNE 30 OF EACH YEAR, A FINANCIAL REPORT FOR THE PRECEDING CALENDAR YEAR.

When an employer is held responsible for the negligent acts of an employee committed within the scope of employment, this is:

1. Contributory negligence
2. Vicarious liability ✓
3. Absolute liability
4. Strict liability

Why: Vicarious liability holds one party (e.g., an employer) responsible for the actions of another (e.g., an employee acting within the scope of employment).

Who bears the cost of witness fees and mileage in a proceeding under 18 Del. C. s 326(b)?

1. They are itemised and form part of the examination expense payable by the person being examined in every case, the Department bearing them only where the examination is of an insurer applying for an initial certificate of authority to transact insurance here.
2. They are paid by the Department out of the Insurance Commissioner Regulatory Revolving Fund established by s 305 of the title, and are recoverable from the person examined only where that person is afterwards found to have violated a provision of the title.
3. They are paid in the first instance by the party calling the witness and are taxed as costs against the unsuccessful party at the conclusion of the proceeding, in the same manner as costs are taxed in the Superior Court of this State.
4. They are itemised and form part of the examination expense payable by the person being examined where the title otherwise provides for that; in other proceedings they are paid by the person found to have violated the law, or by the person at whose request the hearing is held. ✓

Why: 18 Del. C. s 326(b) allows witness fees and mileage THE SAME AS FOR TESTIMONY IN A SUPERIOR COURT, and provides that they SHALL BE ITEMIZED AND SHALL BE A PART OF THE EXAMINATION EXPENSE TO BE PAID BY THE PERSON BEING EXAMINED, WHERE PAYMENT OF EXAMINATION EXPENSE BY SUCH PERSON IS OTHERWISE PROVIDED FOR IN THIS TITLE, OR PAID BY THE PERSON AS TO WHOM SUCH PROCEEDINGS, OTHER THAN AS PART OF AN EXAMINATION, ARE HELD IF, IN SUCH PROCEEDINGS, SUCH PERSON IS FOUND TO HAVE BEEN IN VIOLATION OF THE LAW, OR BY THE PERSON, IF OTHER THAN THE COMMISSIONER, AT WHOSE REQUEST THE HEARING IS HELD.

Which statement about Homeowners Section II Coverage E limits is correct?

1. It is unlimited for any suit brought by a guest injured on the residence premises
2. It is a per-occurrence limit, commonly starting at $100,000 and increasable ✓
3. It is always written equal to the Coverage A dwelling limit shown on the declarations
4. It applies to property damage only, not bodily injury

Why: Personal Liability (Coverage E) is written with a per-occurrence limit, commonly starting at $100,000 and increasable for higher protection.

How are the Arbitration Panels constituted under Delaware Regulation 901 s 9.0?

1. The Commissioner establishes a single Panel for all claims, drawn from a standing list; each sitting has three members chosen by the parties, who then agree a presiding member; an automobile panel must consist entirely of Delaware attorneys, and a homeowners' panel entirely of licensed property appraisers.
2. The Commissioner establishes two types of Panel; each has five members, of whom three sit on any one matter; an automobile panel must include at least one Delaware attorney and one licensed adjuster, and a member whose employer is a party may sit provided the conflict is disclosed to the parties before the hearing begins.
3. The Superior Court appoints the Panels from lists the Commissioner supplies; each has three members with a presiding member elected by the members themselves; an automobile panel must include at least one Delaware attorney, and a member may not serve where his employer or client is a party to the arbitration.
4. The Commissioner establishes two types of Panel, for automobile and for homeowners' claims; each has three members selected by the Commissioner with a presiding member the Commissioner appoints, and no member may serve where his employer or client is a party. Automobile panels need a Delaware attorney. ✓

Why: Delaware Regulation 901 s 9.1: THE COMMISSIONER SHALL ESTABLISH TWO TYPES OF ARBITRATION PANELS ... FOR AUTOMOBILE INSURANCE CLAIMS AND HOMEOWNERS' INSURANCE CLAIMS. Section 9.2: EACH PANEL SHALL CONSIST OF THREE MEMBERS OF SUITABLE BACKGROUNDS OR EXPERIENCE ..., TO BE SELECTED BY THE COMMISSIONER. NO MEMBER MAY SERVE ON A PANEL IN WHICH HIS EMPLOYER OR CLIENT IS A PARTY. EACH PANEL SHALL HAVE A PRESIDING MEMBER WHO SHALL BE APPOINTED BY THE COMMISSIONER. Section 9.2.1: IN THE CASE OF AUTOMOBILE CLAIMS, EACH PANEL SHALL CONSIST OF AT LEAST ONE DELAWARE ATTORNEY AS A MEMBER AND THE BALANCE ... SHALL BE DELAWARE LICENSED INSURANCE ADJUSTERS AND/OR APPRAISER AS DEFINED IN 18 Del.C. s 1702(c). Section 9.2.4: A DECISION BY THE PANEL REQUIRES CONCURRENCE BY AT LEAST TWO OF THE PANEL MEMBERS.

A business has a CGL with a $1M each occurrence and $2M general aggregate limit. During the year it has already paid $1.5M in unrelated premises/operations claims. A new $1M premises liability claim occurs. The most the policy will pay on the new claim is:

1. $0
2. $1,000,000
3. $500,000 ✓
4. $2,000,000

Why: Only $500,000 of general aggregate remains ($2M minus $1.5M), so the new claim is limited to the remaining aggregate even though the occurrence limit is $1M.

What are the claim thresholds for NON-WEATHER claims and for a COMBINATION of the two under 18 Del. C. s 4130(a)(1)b and c?

1. Claims not caused by weather: three or more during the sixty months immediately preceding expiration. A combination of weather and non-weather claims: two or more during the forty-eight months immediately preceding expiration, the shorter period and the lower count going together because a mixed record shows a broader exposure than a single cause.
2. Claims not caused by weather: two or more during the sixty months immediately preceding expiration. A combination of weather and non-weather claims: three or more during the forty-eight months immediately preceding expiration. ✓
3. Claims not caused by weather: two or more during the thirty-six months immediately preceding expiration, the same period as for weather claims. A combination of the two: three or more during the sixty months immediately preceding expiration, the longest of the three periods because the combination rule is the broadest of the three grounds.
4. Claims not caused by weather: two or more during the sixty months immediately preceding expiration. A combination of weather and non-weather claims: three or more during the thirty-six months immediately preceding expiration, the same period as the weather rule, so that adding a non-weather claim never lengthens the look-back.

Why: 18 Del. C. s 4130(a)(1)b: CLAIMS NOT CAUSED BY WEATHER, UNLESS 2 OR MORE CLAIMS HAVE BEEN MADE AGAINST THE POLICY DURING THE 60 MONTHS IMMEDIATELY PRECEDING THE EXPIRATION OF THE CURRENT POLICY PERIOD. Paragraph c: A COMBINATION OF CLAIMS CAUSED BY WEATHER AND CLAIMS NOT CAUSED BY WEATHER, UNLESS SUCH COMBINATION OF 3 OR MORE CLAIMS HAS BEEN MADE AGAINST THE POLICY DURING THE 48 MONTHS IMMEDIATELY PRECEDING THE EXPIRATION. Three numbers to keep straight: 3/36 for weather, 2/60 for non-weather, 3/48 for the combination.

When MAY an insurer nonrenew a homeowners policy despite the claim counts, under 18 Del. C. s 4130(a)(2)?

1. Where the claim or claims demonstrate any change in the hazard or in the risk assumed, whether before or after the policy was issued, and whether or not the insurer applies the same approach to other policies similarly situated; or where the policyholder has failed to make repairs which the insurer considers necessary, whether or not the policyholder was notified that the failure would be a breach.
2. Where the insurer has given the policyholder notice of its formal nonrenewal practice in the disclosure form which Regulation 702 requires, and the policyholder's claim record falls within the circumstances listed there; the section otherwise makes the three claim counts an absolute bar on a nonrenewal founded on the policyholder's claims.
3. Where the claims demonstrate a reasonably substantial increase in the hazard subsequent to the issue of the policy, whether or not the same approach is taken to other policies similarly situated; or where the policyholder has refused to make reasonably necessary repairs, notification being required only where the repairs concern a structure rather than the contents of the dwelling.
4. Where the claim or claims demonstrate a reasonably substantial change or increase in the hazard or in the risk assumed subsequent to the date the policy was issued and the nonrenewal is applied to other similarly situated homeowners policies; or where the policyholder has refused to make reasonably necessary changes or repairs after being notified that the failure will breach the contract. ✓

Why: 18 Del. C. s 4130(a)(2) provides that AN INSURER MAY NONRENEW A HOMEOWNER'S POLICY IF: a. THE CLAIM OR CLAIMS ASSERTED AGAINST THE POLICY DEMONSTRATE THAT THERE HAS BEEN A REASONABLY SUBSTANTIAL CHANGE OR INCREASE IN THE HAZARD OR IN THE RISK ASSUMED BY THE CARRIER SUBSEQUENT TO THE DATE THE POLICY WAS ISSUED, AND SUCH NONRENEWAL IS APPLIED TO OTHER HOMEOWNERS POLICIES SIMILARLY SITUATED; OR b. THE POLICYHOLDER HAS REFUSED OR FAILED TO MAKE REASONABLY NECESSARY CHANGES OR REPAIRS AFTER BEING NOTIFIED BY THE INSURER THAT FAILURE TO MAKE SUCH CHANGES OR REPAIRS WILL CONSTITUTE A BREACH OF CONTRACTUAL DUTIES, CONDITIONS OR WARRANTIES ... The even-handedness condition on limb a, and the prior notice on limb b, are both elements.

What does 19 Del. C. s 2301 include within CHILD and within COMPENSATION?

1. Child includes only the natural and adopted children of the deceased, a stepchild or a child to whom the deceased stood in loco parentis being a dependent instead and taking under the residuary limb of s 2330; compensation means the weekly indemnity payments alone, medical services and funeral benefits being separately provided for by ss 2322 and 2331.
2. Child includes stepchildren, adopted children and children to whom the deceased stood in loco parentis if members of the decedent's household at death, and posthumous children, but not married children. Compensation, where the context requires, includes surgical, medical and hospital services, medicines and supplies, and funeral benefits. ✓
3. Child includes stepchildren, adopted children, children in loco parentis and married children alike, marriage being irrelevant to dependency under the chapter; compensation includes surgical, medical and hospital services, medicines and supplies and funeral benefits, but not a posthumous child's entitlement, which arises under the law of estates.
4. Child includes stepchildren and adopted children but not posthumous children, who are not members of the decedent's household at the time of the death; compensation includes medical services and funeral benefits, and a worker who relies in good faith on prayer or spiritual means must nevertheless undergo medical treatment to keep the entitlement.

Why: 19 Del. C. s 2301(2): CHILD INCLUDES STEPCHILDREN AND ADOPTED CHILDREN AND CHILDREN TO WHOM THE DECEASED STOOD IN LOCO PARENTIS IF MEMBERS OF THE DECEDENT'S HOUSEHOLD AT THE TIME OF THE DECEDENT'S DEATH, AND INCLUDES POSTHUMOUS CHILDREN BUT NOT MARRIED CHILDREN. Paragraph (5): COMPENSATION WHEREVER THE CONTEXT REQUIRES IT INCLUDES SURGICAL, MEDICAL AND HOSPITAL SERVICES, MEDICINES AND SUPPLIES AND FUNERAL BENEFITS. It adds that nothing in the chapter requires a worker who IN GOOD FAITH RELIES ON OR IS TREATED BY PRAYER OR SPIRITUAL MEANS BY A DULY ACCREDITED PRACTITIONER OF A WELL-KNOWN CHURCH to undergo medical or surgical treatment, nor deprives that worker or the worker's dependents of compensation.

Multiple Peril Crop Insurance (MPCI) typically covers:

1. Liability for injuries to farm visitors and to seasonal workers hired for the harvest
2. Hail damage only, measured per acre
3. A broad range of natural causes of crop loss such as drought, flood, and disease ✓
4. Fire damage to barns and outbuildings only

Why: MPCI is a comprehensive policy covering yield losses from many natural perils including drought, excess moisture, freeze, and disease.

Under the GLBA privacy rule, an insurer that intends to share a customer's nonpublic personal financial information with a nonaffiliated third party generally must first:

1. Obtain a court order approving transfer of the customer's file to the recipient
2. File a notice with FEMA
3. Cancel the policy before any data changes hands
4. Provide a privacy notice and the opportunity to opt out ✓

Why: GLBA requires insurers to deliver a privacy notice and, before sharing nonpublic personal information with nonaffiliated third parties, give the consumer a chance to opt out.

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.

A business that performs incidental contracts and also assumes a railroad's liability in a sidetrack agreement has the assumed liability covered under the CGL because:

1. It is a Coverage B personal and advertising injury offense committed in the conduct of the insured's business
2. A sidetrack agreement is an 'insured contract' excepted from the contractual liability exclusion ✓
3. The pollution exclusion contains a stated exception for railroad operations carried out on a sidetrack
4. All liability the insured assumes by written contract is covered automatically

Why: Sidetrack agreements are listed insured contracts, so liability assumed under them is excepted from the contractual liability exclusion.

What is the legal effect of a certificate of insurance under 18 Del. C. ss 4503 and 4504?

1. A certificate is a collateral contract between the insurer and the person to whom it is issued, and confers on that person such rights as it states, whether or not the policy provides them; a person who requests a certificate stating more than the policy provides commits no offence, the duty being on the issuer alone.
2. A certificate is not a policy and does not alter the coverage, but it may confer additional rights on the person to whom it is issued where the insurer has signed it; requesting or requiring the issuance of a misleading certificate is outside the chapter, which reaches only the person who prepares or issues one.
3. A certificate is not a policy and does not alter the coverage; it may however warrant that the policy complies with the insurance requirements of a contract, and the inclusion of a contract number in the certificate is to be interpreted as such a warranty by the issuer to the person requiring it.
4. A certificate is not a policy of insurance and does not affirmatively or negatively amend, extend, or alter the coverage of the policy it refers to, nor confer new or additional rights beyond what that policy expressly provides; no person may prepare, issue, or request or require the issuance of one containing false or misleading information about the policy, or one purporting to alter the coverage. ✓

Why: 18 Del. C. s 4503(b): A CERTIFICATE OF INSURANCE IS NOT A POLICY OF INSURANCE AND DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND, OR ALTER THE COVERAGE AFFORDED BY THE POLICY TO WHICH THE CERTIFICATE ... MAKES REFERENCE. A CERTIFICATE ... SHALL NOT CONFER TO ANY PERSON NEW OR ADDITIONAL RIGHTS BEYOND WHAT THE REFERENCED POLICY ... EXPRESSLY PROVIDES. Section 4504(a): A PERSON SHALL NOT: (1) PREPARE, ISSUE, OR REQUEST OR REQUIRE THE ISSUANCE OF A CERTIFICATE ... THAT CONTAINS ANY FALSE OR MISLEADING INFORMATION CONCERNING THE POLICY ...; OR (2) PREPARE, ISSUE, REQUEST, OR REQUIRE THE ISSUANCE OF A CERTIFICATE ... THAT PURPORTS TO AFFIRMATIVELY OR NEGATIVELY ALTER, AMEND, OR EXTEND THE COVERAGE ... Subsection (b): A CERTIFICATE ... SHALL NOT WARRANT THAT THE POLICY ... COMPL[IES] WITH THE INSURANCE OR INDEMNIFICATION REQUIREMENTS OF A CONTRACT, AND THE INCLUSION OF A CONTRACT NUMBER OR DESCRIPTION ... SHALL NOT BE INTERPRETED AS DOING SUCH. The prohibition reaches the person who REQUESTS OR REQUIRES it, not only the issuer.

What do the REPLACING YOUR HOME and REIMBURSEMENT FOR STOLEN ITEMS disclosures in Delaware Regulation 702 have to say?

1. That the policy covers the full cost of replacing the home without depreciation unless the declarations say otherwise; and that items such as jewellery, furs and fine art are covered in full unless specifically excluded, the object of the regulation being to reassure the policyholder about the scope of the standard form.
2. That the policy may not cover the full cost of replacing the home, and that the policyholder is entitled to purchase replacement cost coverage from the carrier at no additional premium; and that limitations on stolen items must be removed on request, an insurer being obliged to offer coverage without such limitation.
3. That the policy may not cover the full cost of replacing the home, and that the policyholder should obtain a professional valuation of the property before each renewal; and that the policy may not cover the value of all items stolen from the home, with a schedule of the sublimits which apply to jewellery, furs and fine art.
4. That the policy may not cover the full cost of replacing the home if it is destroyed in a covered event, with enough information to let the policyholder buy that coverage from the carrier if the carrier offers it; and that the policy may not cover the value of all items stolen from the home, with a direction to review the policy to see which stolen items are not covered. ✓

Why: Delaware Regulation 702 s 5.1.2 requires DISCLOSURE THAT THE POLICY MAY NOT COVER THE FULL COST OF REPLACEMENT WITHOUT DEPRECIATION OF THE PROPERTY, AND SUFFICIENT INFORMATION TO ALLOW THE POLICYHOLDER TO PURCHASE SUCH COVERAGE FROM THE CARRIER IF IT IS OFFERED BY THE CARRIER - the safe-harbour wording ending YOU MAY PURCHASE ADDITIONAL COVERAGE FROM US ..., AT AN ADDITIONAL COST. Section 5.1.3 requires disclosure of ANY LIMITATIONS IN THE POLICY REGARDING REIMBURSEMENT FOR ITEMS STOLEN FROM THE PROPERTY, INCLUDING BUT NOT LIMITED TO JEWELRY, FURS, FINE ART, ETC. Each is entitled as the regulation directs, in at least 18 point type. Neither obliges the insurer to offer anything: s 2.0 says the regulation DOES NOT MANDATE ANY COVERAGE BY ANY CARRIER.

Under the CGL, the duty to defend ends when:

1. The policy is renewed and a fresh set of aggregate limits takes effect for the new term
2. The applicable limit of insurance has been exhausted by payment of judgments or settlements ✓
3. The insured retains its own attorney and the insurer reimburses those fees
4. The first claim of the policy period is filed against the insured

Why: The insurer's duty to defend ceases once the applicable limit is used up by judgments or settlements.

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.

What must an insurer send at least thirty days before the end of a policy period, under 18 Del. C. s 4122(c)?

1. Either written notice of its offer to renew if the applicable premium is received within a specified billing period, or written notice of its intention not to renew on expiration of the current period; a notice of intention not to renew must include or be accompanied by a written explanation of the insurer's specific reason or reasons for the nonrenewal. ✓
2. Written notice of its intention not to renew, where that is its intention; where it intends to renew it need send nothing, the policy continuing on its existing terms until the premium falls due, and the named insured being entitled to assume from the silence that cover will be offered for the coming period on the same terms.
3. Written notice of the renewal premium and of any change in the terms of the coverage; an insurer which intends not to renew must instead give sixty days' notice of that intention, the longer period being allowed so that the named insured has time to place the risk elsewhere before the current policy period comes to an end.
4. Either notice of its offer to renew or notice of its intention not to renew; neither notice need give reasons, the subchapter requiring a written explanation of specific reasons only on a declination under subsection (a) and on a cancellation during the policy term under subsection (b) of the section.

Why: 18 Del. C. s 4122(c) requires the insurer, AT LEAST 30 DAYS BEFORE THE END OF A POLICY PERIOD, AS DESCRIBED IN s 4121(c) OF THIS TITLE, to deliver or mail to the named insured at the last known address EITHER OF THE FOLLOWING: (1) WRITTEN NOTICE OF THE INSURER'S OFFER TO RENEW THE POLICY IF THE APPLICABLE PREMIUM FOR THE POLICY IS RECEIVED WITHIN A SPECIFIED BILLING PERIOD; OR (2) WRITTEN NOTICE OF THE INSURER'S INTENTION NOT TO RENEW THE POLICY UPON EXPIRATION OF THE CURRENT POLICY PERIOD. THE NOTICE OF INTENTION NOT TO RENEW SHALL INCLUDE OR BE ACCOMPANIED BY A WRITTEN EXPLANATION OF THE INSURER'S SPECIFIC REASON OR REASONS FOR THE NONRENEWAL.

Symbol 2 in the Business Auto Coverage Form designates:

1. Hired autos only
2. Any auto
3. Specifically described autos
4. Owned autos only ✓

Why: Symbol 2 covers all owned autos, both those owned now and those acquired later, depending on category symbols used.

What is COLLATERAL, and what is PROPERTY BAIL, under 18 Del. C. s 4332?

1. Collateral means United States currency, postal money orders or cashier's checks or other property pledged as security for a bail bond; property bail means currency, money orders or cashier's checks, real property or other property, and a property bail agent pledges it for reward. ✓
2. Collateral means real property only, currency and money orders being the premium rather than security; property bail means any property other than money pledged for a bond, and a property bail agent is a person who pledges his or her own property without reward, a person who takes a reward being a surety bail agent instead.
3. Collateral means United States currency or its equivalents pledged as security for a bond; real property may not be taken as collateral at all, which is why s 4348(d) forbids a transfer of title. Property bail means the same thing as collateral, the two terms being used interchangeably through the subchapter.
4. Collateral means any property pledged as security for a bail bond; property bail means property pledged by a licensed surety insurer rather than by an individual, and a property bail agent is the agent of such an insurer, as distinct from a surety bail agent, who acts on his or her own account.

Why: 18 Del. C. s 4332(4): COLLATERAL MEANS UNITED STATES CURRENCY, UNITED STATES POSTAL MONEY ORDERS OR CASHIER'S CHECKS OR OTHER PROPERTY PLEDGED AS SECURITY OR SURETY FOR A BAIL BOND IN CONNECTION WITH A JUDICIAL PROCEEDING. Paragraph (13): PROPERTY BAIL MEANS UNITED STATES CURRENCY, UNITED STATES POSTAL MONEY ORDERS OR CASHIER'S CHECKS, REAL PROPERTY OR OTHER PROPERTY. Paragraph (14): PROPERTY BAIL AGENT MEANS ANY PERSON WHO PLEDGES PROPERTY BAIL AS SECURITY OR SURETY FOR A BAIL BOND IN CONNECTION WITH A JUDICIAL PROCEEDING AND RECEIVES OR IS PROMISED THEREFOR MONEY OR OTHER THINGS OF VALUE. Paragraph (1): BAIL AGENT or BAIL PRODUCER MEANS A SURETY BAIL AGENT OR A PROPERTY BAIL AGENT, and does NOT include a BAIL ENFORCEMENT AGENT under 24 Del. C. ch. 55.

In commercial trucking, a non-trucking ("bobtail") liability policy covers an owner-operator's tractor when it is:

1. Being used without a trailer or not in the business of the motor carrier (e.g., personal use) ✓
2. Parked at the motor carrier's terminal under load while awaiting the dispatcher's next assignment
3. Hauling a loaded trailer under dispatch for the motor carrier identified in the operating lease
4. Carrying placarded hazardous materials that require the carrier to make a federal MCS-90 filing

Why: Non-trucking/bobtail liability covers the tractor when used outside the motor carrier's business, filling the gap when the carrier's policy does not apply.

A large corporation sets aside its own funds in a formal program to pay for its own anticipated losses rather than buying insurance. This is:

1. Coinsurance
2. Reinsurance
3. Reciprocal insurance
4. Self-insurance ✓

Why: Self-insurance is a formal retention program in which an entity sets aside funds to pay its own losses instead of transferring the risk.

Under what statutory authority is a CONSENT-TO-RATE filing made, and what does that section say?

1. 18 Del. C. s 2509, which provides that upon the written application of the insured stating his reasons therefor, filed with and approved by the commissioner, a rate in excess of that provided by a filing otherwise applicable may be used on any specific risk; Regulation 1901 itself is adopted under 18 Del. C. s 314. ✓
2. 18 Del. C. s 2518, the deviations section, which lets a subscriber to a rating organisation apply for permission to file a deviation from the class rates; Regulation 1901 is adopted under that section and sets out the form in which such an application is to be made by the insurer to the Commissioner.
3. 18 Del. C. s 2509, which lets the insurer apply in writing for approval of a rate in excess of that otherwise applicable on a class of risks; the insured's consent is not required, the protection for the insured being the Commissioner's approval and the producer's duty under 18 Del. C. s 1717 to meet the needs of the buying public.
4. 18 Del. C. s 2504, the rate filings section, every excess rate being a rating rule which the insurer must file before use; Regulation 1901 prescribes the supporting information, and the filing becomes effective sixty days after it is made unless the Commissioner disapproves it in the meantime.

Why: Delaware Regulation 1901 s 2.1 states that THIS REGULATION IS ADOPTED PURSUANT TO 18 Del.C. s 314 ... 18 Del.C. s 2509 OF THE INSURANCE CODE STATES THAT 'UPON THE WRITTEN APPLICATION OF THE INSURED STATING HIS REASONS THEREFOR, FILED WITH AND APPROVED BY THE COMMISSIONER, A RATE IN EXCESS OF THAT PROVIDED BY A FILING OTHERWISE APPLICABLE MAY BE USED ON ANY SPECIFIC RISK.' The application is THE INSURED'S, and it is for a SPECIFIC RISK. Section 2.2 recites the producer's duty under 18 Del. C. s 1717 TO INSURE THAT EACH TRANSACTION UNDERTAKEN WILL ... MEET THE NEEDS OF THE INSURANCE-BUYING PUBLIC.

Within what period must notice of a compensable occupational disease be given under 19 Del. C. s 2342, and from when does it run?

1. Written notice must be given within two years after the date on which the employee first acquired knowledge that the disability was caused by the employment, that being the general limitation period for a claim under the chapter; the employer's own knowledge is not a substitute for the notice which the section requires.
2. Written notice must be given within six months after the date of the last exposure to the hazard in the employment, whether or not the employee then knew or could have known that the disability was connected with it; an employee who learns of the connection later must apply to the Board for leave to give the notice out of time.
3. Written notice must be given within thirty days after the employee first acquired knowledge of the connection, the same period that s 2323 allows for notice that medical aid has been employed; the employer's actual knowledge during the continuance of the employment excuses the notice only where the disease is one listed in the chapter.
4. Written notice or claim must be given within six months after the date on which the employee first acquired knowledge that the disability was, could have been caused by or had resulted from the employment; without it, or without the employer's actual knowledge during the employment, no compensation is payable for death or disability by occupational disease. ✓

Why: 19 Del. C. s 2342 provides that UNLESS THE EMPLOYER DURING THE CONTINUANCE OF THE EMPLOYMENT HAS ACTUAL KNOWLEDGE THAT THE EMPLOYEE HAS CONTRACTED A COMPENSABLE OCCUPATIONAL DISEASE OR UNLESS THE EMPLOYEE, OR SOMEONE IN THE EMPLOYEE'S BEHALF, OR SOME OF THE EMPLOYEE'S DEPENDENTS ..., GIVES THE EMPLOYER WRITTEN NOTICE OR CLAIM THAT THE EMPLOYEE HAS CONTRACTED 1 OF THE COMPENSABLE OCCUPATIONAL DISEASES, WHICH NOTICE TO BE EFFECTIVE SHALL BE GIVEN WITHIN A PERIOD OF 6 MONTHS AFTER THE DATE ON WHICH THE EMPLOYEE FIRST ACQUIRED SUCH KNOWLEDGE THAT THE DISABILITY WAS, COULD HAVE BEEN CAUSED OR HAD RESULTED FROM THE EMPLOYEE'S EMPLOYMENT, NO COMPENSATION SHALL BE PAYABLE. The employer's actual knowledge IS an alternative.

The amount added to the pure premium to cover operating expenses, commissions, and profit is called the:

1. Deductible
2. Loading ✓
3. Salvage
4. Coinsurance

Why: Loading is added to the pure premium to account for the insurer's expenses, contingencies, and profit margin.

A licensee disputes the Department's accounting of continuing education credits. What does Delaware Regulation 504 require?

1. A written exception submitted before the biennium deadline, including a copy of the provider's course completion certificate, the burden of correcting the Department's record lying on the licensee who wishes to dispute it at all. ✓
2. A written exception submitted within thirty days of the licensee receiving the transcript, including a copy of the provider's course completion certificate and a statement from the authorised representative of the provider confirming the licensee's attendance.
3. An application to the Commissioner under s 323 of the title for a hearing to determine the reasonableness of the Department's accounting, made within ninety days of the licensee knowing of the discrepancy in the transcript.
4. A written exception submitted before the biennium deadline; the provider rather than the licensee must supply the course completion certificate, direct evidence from the licensee not being accepted by the Department in support of an exception.

Why: Delaware Regulation 504 places the burden on the licensee: after reviewing the transcript for accuracy, TO DISPUTE THE DEPARTMENT'S ACCOUNTING, THE LICENSEE MUST SUBMIT A WRITTEN EXCEPTION THERETO PRIOR TO THE BIENNIUM DEADLINE AND INCLUDE A COPY OF THE PROVIDERS COURSE COMPLETION CERTIFICATE. Before the deadline, and with the certificate attached.

A loss payable clause in a property policy primarily protects:

1. The state guaranty association, which is reimbursed first out of any loss payment
2. A secured creditor or lender with an interest in covered personal property ✓
3. A bailee holding the property for repair, giving it a direct claim on the proceeds
4. The named insured alone, to the exclusion of any lender

Why: A loss payable clause directs claim payments to a designated party (such as a lender) holding an interest in the covered property.

A producer's licence has been suspended for 12 months. May the Commissioner cut the suspension short, under 18 Del. C. s 1712(e)?

1. No. A suspension once ordered runs its full course, s 1702(23) making reinstatement automatic on expiry; the licensee's only remedy is an appeal to the Superior Court under s 328 within 60 days of the order.
2. Yes, but only on the licensee's petition after at least half the suspension has run, and only unconditionally; the Commissioner has no power to attach terms to a reinstatement that s 1702(23) does not itself impose.
3. Yes. The commissioner may, in the commissioner's discretion, reinstate a suspended license at any time, and may impose as conditions upon the reinstatement such terms and conditions as the commissioner determines appropriate. ✓
4. No, unless the appointing insurer applies for reinstatement and posts a bond for the licensee's future conduct, in which case the Commissioner must reinstate and may not impose any further condition on the licensee.

Why: 18 Del. C. s 1712(e), second sentence: THE COMMISSIONER MAY, UPON THE COMMISSIONER'S DISCRETION, REINSTATE A SUSPENDED LICENSE AT ANY TIME, AND MAY IMPOSE AS CONDITIONS UPON THE REINSTATEMENT SUCH TERMS AND CONDITIONS AS THE COMMISSIONER DETERMINES APPROPRIATE. This sits alongside s 1702(23), under which reinstatement follows automatically at the end of the suspension once the Commissioner's terms have been met - early, discretionary, conditional reinstatement is the additional power here.

What are the court penalties for violating 21 Del. C. s 2118, under subsection (s)(1)?

1. For a first offence, a fine of not less than $1,500 nor more than $2,000 and a six-month suspension; for each subsequent offence within three years, not less than $3,000 nor more than $4,000 and a twelve-month suspension. The minimum fine may never be suspended, the General Assembly having made it mandatory in order to give the section real deterrent effect against repeat offenders.
2. For a first offence, a penalty of $100 assessed by the Division of Motor Vehicles together with a registration reinstatement fee of $50; a court fine of not less than $1,500 nor more than $2,000 is reserved for a second or subsequent offence within three years, and a six-month suspension of licence or driving privileges follows a third such offence.
3. For a first offence, a fine of not less than $1,500 nor more than $2,000, with no suspension of licence or driving privileges; the suspension for six months is imposed only on a subsequent offence occurring within three years of a former one, for which the fine is also raised to not less than $3,000 nor more than $4,000 by the subsection.
4. For a first offence, a fine of not less than $1,500 nor more than $2,000 and a six-month suspension of licence or privileges; for each subsequent offence within three years, not less than $3,000 nor more than $4,000 and a six-month suspension. The minimum fine for a violation of (a), (b) or (p) may be suspended if insurance was secured between charge and sentencing. ✓

Why: 21 Del. C. s 2118(s)(1) provides that WHOEVER VIOLATES ANY SUBSECTION OF THIS SECTION SHALL BE FINED FOR THE FIRST OFFENSE NOT LESS THAN $1,500 NOR MORE THAN $2,000 AND SHALL HAVE THAT PERSON'S DRIVING LICENSE AND/OR PRIVILEGES SUSPENDED FOR 6 MONTHS. FOR EACH SUBSEQUENT OFFENSE OCCURRING WITHIN 3 YEARS OF A FORMER OFFENSE, THAT PERSON SHALL BE FINED NOT LESS THAN $3,000 NOR MORE THAN $4,000 AND SHALL HAVE THAT PERSON'S DRIVER'S LICENSE AND/OR DRIVING PRIVILEGE SUSPENDED FOR 6 MONTHS. THE MINIMUM FINE LEVIED FOR A VIOLATION OF SUBSECTION (a), (b), OR (p) ... MAY BE SUSPENDED, IN WHOLE OR IN PART, BY THE COURT IF EVIDENCE IS PRESENTED THAT THE DEFENDANT HAS SECURED INSURANCE BETWEEN THE DATE OF CHARGE AND THE DATE OF SENTENCING. Six months either way; the fine is what changes.