Florida Property & Casualty Insurance License, Practice Exams

An insured has $1M/$2M CGL underlying and a $5M umbrella. A covered liability judgment is $4M for a single occurrence. After the CGL pays its $1M occurrence limit, the umbrella pays:

1. $0
2. $5,000,000
3. $4,000,000
4. $3,000,000 ✓

Why: The CGL pays its $1M occurrence limit; the umbrella pays the remaining $3M excess over the underlying.

An employer headquartered in one state sends a crew temporarily into another state not listed on the policy. Which Part of the policy is designed to provide coverage in states not listed in Part One?

1. Part Two — Employers Liability
2. Part Three — Other States Insurance ✓
3. Part One — Workers Compensation
4. Part Four — Your Duties If Injury Occurs

Why: Part Three (Other States Insurance) extends coverage to operations in states listed in the Part Three item, providing benefits if the insured incurs WC obligations in a state not shown in Part One.

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.

A general contractor requires its subcontractor to name it as an additional insured. The PRIMARY benefit to the general contractor is:

1. A warranty from the subcontractor that its work and materials will stay free of defects for one year
2. A lower experience modification factor on the general contractor's workers compensation
3. Coverage under the sub's policy for the GC's vicarious liability arising from the sub's work ✓
4. A reduced premium for the subcontractor, which the GC recovers in the bid price

Why: As an additional insured on the sub's policy, the GC obtains coverage for liability arising out of the subcontractor's operations.

Which activity is expressly treated as 'solicitation of insurance' requiring a license under section 626.112?

1. Cleaning and securing the agency premises after hours under a janitorial contract
2. Describing the benefits or terms of insurance coverage, including premiums ✓
3. Performing only clerical filing of completed policies at a licensed agent's direction
4. Delivering incoming mail and parcels to the agency office as a contract courier

Why: Section 626.112(1)(b) lists describing the benefits or terms of coverage, including premiums or rates of return, as solicitation requiring a license.

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

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

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

Which of the following is NOT an element of an ideally insurable risk?

1. The premium must be economically feasible
2. The loss must be due to chance and accidental
3. The loss must be catastrophic to the insurer ✓
4. The loss must be definite and measurable

Why: Insurable losses should NOT be catastrophic to the insurer; insurers avoid risks that could cause simultaneous, ruinous losses across the pool.

Liberalization is a policy condition that:

1. Reduces coverage automatically whenever the insurer files a narrower form with the state
2. Adds Section ii liability protection for the insured's business pursuits at each renewal without charge
3. Cancels the policy automatically when a broader form is approved, requiring the insured to reapply for coverage
4. Automatically extends any broadened coverage to existing policyholders without additional premium ✓

Why: The liberalization clause provides that if the insurer broadens coverage without additional premium during the policy period, the broadened coverage applies automatically to the existing policy.

An insured has a claims-made CGL with a retroactive date of 1/1/2020. An injury occurred in 2019 but the claim is first made in 2024 while the policy is in force. The claim is:

1. Covered under the extended reporting period tail, which reaches back before the retroactive date
2. Covered, because a claims-made form responds to any claim first made during the policy period
3. Covered as a Supplementary Payment, since defense costs sit outside the retroactive date
4. Not covered, because the injury occurred before the retroactive date ✓

Why: Even though the claim is made during the policy period, the injury predates the retroactive date, so it is not covered.

Under the Dwelling Policy, Coverage A applies to which of the following?

1. Detached garages and sheds
2. Household personal property
3. The dwelling itself ✓
4. Loss of rental income

Why: Coverage A is the Dwelling coverage, insuring the described residence structure. Other structures are Coverage B, personal property is Coverage C.

Impairment income benefits under §440.15 are paid biweekly at what rate?

1. 50 percent of the employee's temporary total disability benefit for each impairment rating point
2. 66 2/3 percent of the employee's average weekly wage
3. 75 percent of the employee's average weekly temporary total disability benefit ✓
4. 100 percent of the average weekly wage, subject to the statutory maximum

Why: Section 440.15(3)(c) provides that impairment income benefits are paid at 75 percent of the employee's average weekly temporary total disability benefit (not to exceed the §440.12 maximum).

For insurers rendered insolvent by the effects of a hurricane, FIGA's EMERGENCY assessment may not exceed what percentage of an insurer's written premiums in any one calendar year for the relevant account?

1. 4% ✓
2. 10%
3. 6%
4. 2%

Why: §631.57(3)(e)1. authorizes an emergency assessment of up to 4% of written premiums for hurricane-related insolvencies, in addition to the 2% regular assessment.

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

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

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

A driver with multiple at-fault accidents and DUIs is repeatedly declined by standard auto insurers. The mechanism most likely to provide required liability coverage is:

1. An automobile assigned-risk plan ✓
2. A FAIR Plan
3. A beach and windstorm plan
4. A risk retention group

Why: Drivers unable to obtain coverage voluntarily are placed through the automobile assigned-risk plan, the residual market for auto insurance.

Under Florida's anti-fraud provisions, a person commits a "fraudulent insurance act" when the person:

1. Files a complaint with the department alleging that an insurer delayed payment of a claim
2. Negligently submits an application containing an incomplete answer, with no intent to deceive the insurer or its agent
3. Knowingly and with intent to defraud presents, or prepares with knowledge it will be presented, false information to an insurer ✓
4. Cancels a policy during the 14-day free-look period and asks for a full refund

Why: A fraudulent insurance act requires knowingly and with intent to defraud presenting, causing to be presented, or preparing (with knowledge or belief it will be presented) false or misleading information to an insurer or similar entity.

When an insurer transfers part of its risk on a policy to another insurer, this practice is called:

1. Reinsurance ✓
2. Coinsurance
3. Retrocession to the insured
4. Subrogation

Why: Reinsurance is the transfer of risk from the original ceding insurer to a reinsurer, allowing the insurer to spread large or numerous risks.

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.

To add liability protection to a Dwelling Policy, which is typically attached?

1. Ordinance or Law endorsement
2. Inflation guard endorsement
3. Personal Liability Supplement ✓
4. Scheduled Personal Property endorsement

Why: Because the Dwelling Policy has no built-in liability, a Personal Liability Supplement is added to provide Coverage L (liability) and Coverage M (medical payments).

In a dispute, once PIP policy limits have been reached, the insurer must notify the insured or assignee within how many days after the limits are reached?

1. 10 days
2. 30 days
3. 45 days
4. 15 days ✓

Why: Section 627.736(6)(f) requires the insurer, in a dispute and upon request, to notify the insured or the assignee that the policy limits have been reached within 15 days after the limits have been reached.

Saying that a property insurance contract is personal means that it:

1. Can only be sold to individuals in their own names, and never to a partnership, corporation or other business entity
2. Covers only personal property such as furniture and clothing, and never the dwelling or other real property
3. Must be signed in person by the named insured before the coverage can attach
4. Insures a person, not the property itself, and generally cannot be transferred without the insurer's consent ✓

Why: A personal contract insures the individual against loss, not the property; it cannot be assigned to another party without the insurer's consent.

To qualify as an independent contractor NOT in the construction industry (and thus not an 'employee'), at least how many of the six listed statutory criteria must be met?

1. At least three of the six criteria
2. At least four of the six criteria ✓
3. All six criteria
4. At least two of the six criteria

Why: Section 440.02(18)(d)1.a. requires that at least four of the six listed criteria be met to meet the definition of independent contractor.

Under PAP Part A, punitive or exemplary damages are:

1. Paid on the same basis as compensatory damages, up to the full Part A liability limit shown on the Declarations page
2. Often excluded or not covered, as the policy responds to compensatory damages the insured is legally liable for ✓
3. Paid outside the limit of liability as a supplementary payment, the same way defense costs and post-judgment interest are
4. Covered under Part B medical payments instead of Part A

Why: Liability coverage responds to compensatory damages; punitive damages are commonly excluded or unenforceable under the policy and many states' public policy.

The CGL pollution exclusion generally bars coverage for:

1. Bodily injury and property damage arising from the discharge, dispersal, or release of pollutants ✓
2. Slander and libel spoken in the insured's advertising, which only a separate media liability policy will answer
3. Theft of an automobile from the insured's parking lot, an exposure that belongs on a commercial crime form
4. Every fire loss at the insured's own premises, no matter whether the fire was hostile or friendly in origin

Why: The pollution exclusion removes coverage for injury/damage from the release of pollutants, subject to limited exceptions.

Under section 626.281, how many times may an applicant take an examination for a particular license type within a 12-month period?

1. No more than five times ✓
2. An unlimited number of times
3. No more than three times
4. No more than four times

Why: Section 626.281(2) limits applicants to taking an examination for a license type no more than five times in a 12-month period.

PIP benefits are considered overdue if the insurer does not pay within how many days after being furnished written notice of a covered loss and its amount?

1. 45 days
2. 20 days
3. 15 days
4. 30 days ✓

Why: Section 627.736(4)(b) makes PIP benefits overdue if not paid within 30 days after written notice of the fact of a covered loss and amount.

Which statement about Part Two (Employers Liability) limits and Part One is correct?

1. Part One has no policy limit; Part Two has stated dollar limits ✓
2. Part Two has no policy limit; Part One has stated dollar limits
3. Neither Part has any limits
4. Both Part One and Part Two have stated dollar limits

Why: Part One has no policy limit (the statute controls benefits), while Part Two carries stated dollar limits for the three employers liability exposures.

If an insured meets or exceeds the coinsurance requirement, the coinsurance penalty:

1. Reduces the limit by the shortfall
2. Does not apply; the loss is paid in full up to the limit ✓
3. Still applies, cutting the payment by the coinsurance percentage carried
4. Doubles the deductible on the loss

Why: When the insured carries at least the required amount, there is no penalty and covered losses are paid up to the limit (less deductible).

In insurance, exposure refers to:

1. The maximum limit of liability shown on the declarations page for that coverage
2. The amount the insured must pay out of pocket before the insurer responds
3. A unit of measure, such as $100 of value or one vehicle, used to set the rate charged
4. A condition or situation that presents a possibility of loss, whether or not it occurs ✓

Why: Exposure is a condition presenting a possibility of loss; it may or may not result in an actual loss.

Which official adjudicates disputed workers' compensation claims in Florida?

1. An administrative law judge of the Division of Administrative Hearings
2. A circuit court judge
3. A Judge of Compensation Claims (JCC) ✓
4. The Insurance Commissioner

Why: Under §440.192 and Chapter 440, petitions for benefits are referred to and adjudicated by Judges of Compensation Claims within the Office of the Judges of Compensation Claims.

Under s. 324.0221(3), the reinstatement fee for a SECOND reinstatement within the following three years is what amount?

1. $150
2. $250 ✓
3. $750
4. $500

Why: Section 324.0221(3) sets $250 for the second reinstatement (and $500 for each subsequent reinstatement) during the 3 years following the first.

Under s. 626.9581, if the department or office determines after a hearing that a person has engaged in an unfair or deceptive act or practice, it must issue an order requiring the person to:

1. Cease and desist from the prohibited conduct ✓
2. Surrender all business records permanently
3. Pay treble damages to every affected policyholder
4. Forfeit all insurance contracts written in the prior year

Why: Section 626.9581 requires the department or office, after the hearing and final order, to issue an order requiring the violator to cease and desist from engaging in the method of competition, act or practice, or the unlawful transaction of insurance.

In a liability policy, an 'occurrence' is best described as:

1. Any intentional act by the insured that results in injury or damage
2. An accident, including continuous or repeated exposure to harmful conditions ✓
3. A scheduled loss of a kind specifically listed on the declarations page
4. A single instantaneous event, so that repeated exposure is excluded

Why: An occurrence is defined as an accident, including continuous or repeated exposure to substantially the same general harmful conditions, broadening coverage beyond a single sudden event.

Which is NOT one of the three parties to a surety bond?

1. Principal
2. Reinsurer ✓
3. Obligee
4. Surety

Why: The three parties to a surety bond are the principal, the obligee, and the surety; a reinsurer is not a bond party.

Under §440.16, actual funeral expenses payable on a compensable death are limited to what amount?

1. $5,000
2. $10,000
3. $7,500 ✓
4. $15,000

Why: Section 440.16(1)(a) requires payment of actual funeral expenses not to exceed $7,500.

An employee files a claim, and the only question is whether to pay statutory benefits set by the state law. Which Part of the policy responds?

1. Part One ✓
2. Part Two
3. Part Four
4. Part Three

Why: Payment of the benefits required by the state WC statute is handled by Part One — Workers Compensation.

A producer was convicted years ago of a felony involving embezzlement (a crime of dishonesty). To continue working in insurance, federal law (18 U.S.C. 1033) requires that the producer:

1. Give written notice to the agency's compliance officer
2. Wait until a court seals or expunges the conviction record, at which point the federal bar lifts automatically
3. Obtain written consent from the state insurance regulatory official ✓
4. Renew the state producer license on its normal schedule

Why: Under 18 U.S.C. 1033, a person convicted of a felony involving dishonesty cannot work in insurance affecting interstate commerce without written consent from the appropriate insurance regulator.

After a dwelling damaged by a hurricane that is the subject of a declared emergency has been repaired, for how long is an insurer generally barred from canceling or nonrenewing the residential property policy?

1. Until the local building official issues a certificate of occupancy
2. 90 days after the property has been repaired ✓
3. 1 year after the property has been repaired
4. Only until the final claim payment is issued

Why: §627.4133(2)(e)1.a. bars cancellation or nonrenewal for 90 days after the dwelling has been repaired following covered hurricane/wind loss under a declared emergency.

The maximum amount an insurer will pay for any one accident, regardless of the number of claimants, is the:

1. Per-person limit
2. Aggregate limit
3. Split limit
4. Per-accident limit ✓

Why: A per-accident limit is the most the insurer pays for all damages from one accident combined.

The characteristic that requires certain acts, such as paying premium and providing proof of loss, before the insurer must pay a claim is that insurance is a contract of:

1. Aleatory nature
2. Conditional nature ✓
3. Indemnity
4. Adhesion

Why: Insurance is a conditional contract because both parties must meet certain conditions before the contract can be enforced.

A worker can return to light-duty work at reduced hours and lower pay while still recovering. The wage-loss benefit during this period is classified as:

1. Temporary partial disability ✓
2. Temporary total disability
3. Permanent total disability
4. Permanent partial disability

Why: Temporary partial disability (TPD) compensates for the wage loss when a recovering worker can perform some work but earns less than before the injury.

Under PAP Part E, after a theft of the covered auto, the insured must additionally:

1. Promptly notify the police ✓
2. Wait 30 days before any action
3. Pay the deductible to the police
4. Repair the vehicle first

Why: For a theft loss, the insured has a specific duty to promptly notify the police in addition to notifying the insurer.

Under s. 626.989, the fraud-investigation powers of the department or its Division of Criminal Investigations include the authority to:

1. Approve policy forms and endorsements before an insurer may use them in this state
2. Set the premium rates charged for lines the division identifies as fraud-prone
3. Issue insurance licenses to qualified applicants
4. Administer oaths, request witness attendance, and collect evidence ✓

Why: In investigating a fraudulent insurance act or a violation of s. 626.9541 or s. 817.234, the department may administer oaths and affirmations, request the attendance of witnesses, and collect evidence.

If an employer FAILS to secure workers' compensation coverage as required, an injured employee may:

1. Wait until the employer obtains coverage, because no claim accrues before a policy is in force
2. File only with the federal OSHA office having jurisdiction over the worksite
3. Elect to claim compensation or sue the employer at law for damages ✓
4. Accept only the scheduled statutory benefits

Why: Section 440.11(1)(a) provides that if an employer fails to secure payment of compensation, the injured employee may elect to claim compensation under the chapter or maintain an action at law for damages.

A health insurer that is in compliance with the consumer privacy protection rules adopted by the U.S. Department of Health and Human Services under HIPAA is treated under Florida law how?

1. Subject to double the standard privacy penalties
2. Required to obtain a separate privacy certificate from the office
3. Exempt from all Florida Insurance Code provisions
4. In compliance with the Florida privacy requirements of s. 626.9651 ✓

Why: Section 626.9651 provides that if the office determines a health insurer or HMO is in compliance with the HHS consumer privacy rules under HIPAA, that insurer is in compliance with this privacy section.

A producer's fiduciary duty to handle premiums means that the producer must:

1. Lend premium funds to clients who are short at renewal
2. Keep client premium funds separate from personal funds and remit them properly ✓
3. Invest premium funds in the stock market and keep the earnings
4. Use collected premiums to cover agency office rent until the insurer bills

Why: As a fiduciary, a producer must safeguard premium funds, keep them separate from personal funds, and forward them to the proper parties.

In insurance terms, risk is best defined as:

1. The financial amount of a loss after it has occurred
2. The certainty that a loss will occur
3. The cause of a loss, such as fire
4. Uncertainty regarding the occurrence of a loss ✓

Why: Risk is the uncertainty about whether a loss will happen. Without uncertainty there is no insurable risk.

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

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

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

What is the primary purpose of a Commercial Package Policy (CPP)?

1. To insure only commercial automobiles owned by a single named insured
2. To provide property coverage only, and only for large corporations
3. To combine two or more coverage parts into a single policy for one insured ✓
4. To replace the need for separate liability coverage entirely

Why: A CPP allows two or more coverage parts (e.g., property, general liability, crime) to be combined under a single policy with shared declarations and conditions.

When an appointing entity terminates an appointment on a ground that would NOT subject the appointee to license suspension or revocation, how much advance written notice must it generally give the appointee?

1. At least 30 days
2. At least 60 days ✓
3. At least 10 days
4. At least 90 days

Why: Section 626.471(1) generally requires at least 60 days' advance written notice of intent to terminate, except where termination is on a ground supporting suspension or revocation.

A person seeking to reinstate driving privileges after suspension for failing to maintain required security must keep proof of coverage (SR-22-type filing) on file for how long?

1. 1 year
2. 2 years ✓
3. 5 years
4. 3 years

Why: Section 324.0221(3) requires the reinstating person to present proof that coverage is in force and to maintain such proof for 2 years.

Under the CGL 'Who Is An Insured' provision, if the named insured is a partnership, who is an insured?

1. The partnership and its members/partners, but only for the conduct of the partnership business ✓
2. Only the senior or managing partner shown on the declarations
3. Only the partnership entity itself, so individual partners must buy their own personal liability coverage
4. Any employee of the firm, including conduct outside the scope of employment

Why: Partners are insureds only with respect to the conduct of the partnership's business.

The Special Causes of Loss form is best characterized as:

1. An open-perils (all-risk) form covering risks of direct physical loss unless excluded ✓
2. A form that excludes theft, so a separate crime coverage part must be purchased for stolen stock
3. A named-peril form covering only fire and lightning, with all other causes added by endorsement
4. A liability form protecting the insured against third-party claims arising from the premises

Why: The Special form is open-perils: it covers risk of direct physical loss unless specifically excluded or limited, shifting the burden of proof to the insurer.

General average in ocean marine refers to:

1. The average premium charged across all vessels in a single fleet policy
2. A total loss of the vessel and everything aboard, after which the underwriter pays the full insured value
3. A voluntary sacrifice or expense incurred to save the venture, shared proportionally by all parties ✓
4. A partial loss falling entirely on the owner of the damaged property, with no contribution from others

Why: General average is a partial loss intentionally incurred (e.g., jettisoning cargo) to save the entire venture; the loss is shared proportionally among all interests (ship, cargo, freight).

Under §627.706, a residential property policy may include a sinkhole loss deductible equal to which of the following percentages of the policy dwelling limits?

1. 2%, 4%, or 6%
2. 5%, 10%, or 15%
3. 1%, 2%, 5%, or 10% ✓
4. 0.5%, 1%, or 3%

Why: §627.706(1)(b) authorizes sinkhole deductibles of 1%, 2%, 5%, or 10% of the policy dwelling limits with appropriate premium discounts.

Glass breakage to a covered building under broad and special homeowners forms is generally:

1. Covered only under DP-1, which adds breakage of glass as an extended coverage peril on all dwelling forms
2. Part of Section ii liability, since broken glass creates a hazard to visitors on the premises
3. Excluded entirely unless a separate glass floater is purchased for the storm doors and windows
4. Covered, though restricted if the dwelling has been vacant beyond the allowed period ✓

Why: Breakage of glass is a covered additional coverage/peril under broad and special forms, but coverage may be suspended when the dwelling has been vacant beyond the stated period.

Under section 626.171, an application for an agent license must be made in what manner by the applicant?

1. Verbally to a department investigator
2. Under the oath of the applicant and signed by the applicant ✓
3. Orally before a notary
4. By a licensed attorney on the applicant's behalf only

Why: Section 626.171(1) requires the application to be made under the oath of the applicant and signed by the applicant.

A vessel departs from its customary route for no necessity, and a loss occurs. The insurer may deny coverage based on:

1. The absence of any deductible in the marine declarations
2. Failure to satisfy the cargo policy's coinsurance requirement
3. Breach of the implied warranty of no deviation ✓
4. The Special Causes of Loss form's exclusion for water damage

Why: Unjustified deviation from the agreed or customary route breaches the implied warranty against deviation, allowing the insurer to deny coverage.

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.

Which of the following is a possible result of the underwriting process?

1. Acceptance with modified terms or higher premium
2. Rejection of the risk
3. All of the above ✓
4. Acceptance of the risk as applied for

Why: Underwriting can result in accepting the risk as is, accepting with modifications/conditions, or rejecting the application.

The Motor Carrier Act and related federal regulations require interstate motor carriers to maintain:

1. Workers compensation coverage on all drivers and nothing more, since federal rules leave liability limits to each state
2. Minimum levels of public liability (financial responsibility) coverage based on cargo type ✓
3. Comprehensive and collision coverage on every power unit and trailer in the fleet, at limits set by the FMCSA
4. No federal filing at all when the truck is owner-operated, because an owner-operator is not classed as a motor carrier

Why: Federal law sets minimum public liability limits for interstate carriers, which vary by the type and hazard of cargo transported (e.g., higher for hazardous materials).

A contractor's business owns no vehicles but employees drive their personal cars to job sites for the company. The business should carry:

1. An MCS-90 endorsement, which federal rules make the required proof of coverage for any employer
2. A personal auto policy issued to the firm
3. Hired and non-owned auto liability (Symbols 8 and 9) ✓
4. Garagekeepers coverage on employee autos

Why: Hired and non-owned auto liability protects the business against vicarious liability from employees' personal autos used on company business and any hired vehicles.

An insurer wishing to comply with GLBA must provide its initial privacy notice to a customer:

1. Only when the policy is cancelled or nonrenewed, along with the final notice
2. Only after the customer files a first claim under the policy
3. At the time the customer relationship is established (and annually thereafter, as applicable) ✓
4. Only when the customer asks in writing to see the insurer's information-sharing practices

Why: GLBA requires delivery of a privacy notice when the customer relationship is established and, historically, an annual notice describing information-sharing practices.

Under section 626.0428, an 'agent in charge' of an insurance agency is accountable for what?

1. Only the marketing and production results of the agency, measured against the premium goals each appointing insurer sets
2. Only those transactions the agent in charge personally completed, signed, or submitted to an appointing insurer for issuance
3. The personal state and federal income tax filings of every employee assigned to that agency location during the calendar year
4. Misconduct or code violations committed by persons under his or her supervision while acting on behalf of the agency ✓

Why: Section 626.0428(4)(e) makes the agent in charge accountable for misconduct or code violations by the licensee or persons under his or her supervision acting for the agency.

Which act is specifically defined as "defamation" under the unfair trade practices statute?

1. Knowingly filing with a public official a false statement of an insurer's financial condition
2. Knowingly making or circulating a false statement that is maliciously critical of and calculated to injure any person ✓
3. Failing in good faith to attempt a prompt, fair, and equitable settlement of a claim once liability has become reasonably clear
4. Entering an agreement to commit an act of boycott, coercion, or intimidation in the business of insurance

Why: Defamation is knowingly making, publishing, or circulating a false statement that is maliciously critical of or derogatory to any person and calculated to injure that person.

On a replacement-cost dwelling loss under §627.7011, how must the insurer handle payment?

1. Initially pay at least the actual cash value, then pay remaining amounts as work is performed and expenses are incurred ✓
2. Withhold every dollar of payment until the insured proves repairs are 100% complete and inspected
3. Pay the full replacement cost within 60 days of the loss whether or not any repair work has begun, with no holdback permitted
4. Pay only actual cash value and never release the depreciation holdback

Why: §627.7011(3)(a) requires the insurer to pay at least ACV initially and pay the remaining (holdback) amounts as repairs are performed and expenses incurred.

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 liberalization clause, if the insurer broadens coverage during the policy term without additional premium:

1. The broadened form applies only to policies written on or after its effective date
2. The insured must request an endorsement and pay additional premium to obtain it
3. The broadened coverage automatically applies to the existing policy ✓
4. The policy is rewritten at the next renewal

Why: The liberalization clause automatically extends any coverage-broadening change to existing policies at no extra cost.

Misrepresenting the dividends or share of surplus previously paid on similar policies is prohibited under which broad category of unfair practice?

1. Boycott, coercion, and intimidation in restraint of the insurance trade
2. Unfair claim settlement practices
3. Defamation of an insurer
4. Misrepresentations and false advertising of insurance policies ✓

Why: Misrepresenting the dividends or share of the surplus to be received, or previously paid, on similar policies falls under misrepresentations and false advertising of insurance policies.

An insured who intentionally exaggerates or fabricates a claim presents which hazard?

1. Catastrophic hazard
2. Physical hazard
3. Morale hazard
4. Moral hazard ✓

Why: A moral hazard arises from dishonesty or character flaws that make a loss more likely, such as fraud or arson for profit.

After receiving written notice of a proposed settlement that would create an underinsured motorist claim, the UM insurer has how long to authorize the settlement or preserve subrogation rights?

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

Why: Section 627.727(6)(a) gives the underinsured motorist insurer 30 days after receipt to consider authorization or retention of subrogation rights.

The principle of indemnity states that an insured should:

1. Profit from a covered loss, since the premium was paid for that possibility
2. Receive replacement cost on every policy, whatever valuation basis it names
3. Be restored to approximately the same financial condition that existed before the loss ✓
4. Always receive the full face amount of the policy regardless of the size of the loss

Why: Indemnity restores the insured to the financial position held before the loss, without allowing profit from the loss.

When an applicant submits a completed application with the initial premium, the applicant is generally making the:

1. Consideration only
2. Counteroffer by the insurer
3. Offer ✓
4. Acceptance

Why: In insurance, the applicant typically makes the offer by submitting the application and premium; the insurer accepts by issuing the policy.

Under the No-Fault definitions, an 'emergency medical condition' means a condition with acute symptoms of sufficient severity that absence of immediate care could reasonably result in which of the following?

1. Any need for a prescription medication to control pain, which by itself establishes an emergency medical condition after a crash
2. Serious jeopardy to patient health, serious impairment of bodily functions, or serious dysfunction of a bodily organ or part ✓
3. The need for a diagnostic imaging study, such as an MRI or a CT scan, ordered by the treating physician within 14 days of the crash
4. Any missed workday resulting from the crash, so long as the employer confirms the absence in writing to the insurer within 30 days

Why: Section 627.732(16) defines EMC as acute symptoms that could reasonably result in serious jeopardy to health, serious impairment of bodily functions, or serious dysfunction of any bodily organ or part.

Under §440.12, the maximum weekly workers' compensation rate is capped at what?

1. 100 percent of the statewide average weekly wage ✓
2. There is no maximum
3. 150 percent of the statewide average weekly wage
4. 66 2/3 percent of the statewide average weekly wage

Why: Section 440.12(2)(a) caps weekly compensation at 100 percent of the statewide average weekly wage (adjusted to the nearest dollar) for the year of injury.

Electronic equipment such as a permanently installed aftermarket sound/navigation system not factory-installed is, under the unendorsed PAP, generally:

1. Subject to exclusion or limitation unless added by endorsement ✓
2. Paid under Part B medical payments rather than Part D physical damage
3. Covered in full under Part D, just like factory-installed equipment
4. Always replaced with a new unit of like kind

Why: The PAP limits or excludes certain non-factory permanently installed electronic equipment; broader coverage requires an endorsement.

Under the FCRA, when an insurer denies an application or charges a higher premium based on a consumer report, it must provide the consumer with:

1. A refund of every premium paid to date, with interest, within 30 days of the underwriting decision
2. A replacement policy issued at the originally quoted premium until the report is corrected
3. An adverse action notice including how to obtain a copy of the report ✓
4. A federal flood zone determination form

Why: The FCRA requires an adverse action notice that informs the consumer of the action, identifies the reporting agency, and explains the right to obtain a free copy of the report and dispute it.

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

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

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