Kansas Property & Casualty Insurance License, Practice Exams

Under K.S.A. 40-4916, what condition does the uniform insurance agents licensing act put on the form of an application the commissioner prescribes by regulation?

1. It shall be identical to the form used in the applicant's home state.
2. It shall substantially comply with any requirements imposed by the NAIC. ✓
3. It shall be approved by the legislature before use.
4. None; the form is entirely within the commissioner's discretion.

Why: K.S.A. 40-4916 lets the commissioner, under the rules and regulations filing act, ADOPT, AMEND AND REVOKE RULES AND REGULATIONS GOVERNING THE ADMINISTRATION AND ENFORCEMENT OF THIS ACT - including CRITERIA FOR APPROVAL OF CONTINUING EDUCATION MATERIALS AND ASSIGNING C.E.C. VALUES; ANY FORM REQUIRED TO IMPLEMENT THIS ACT, SUBJECT TO THE CONDITION THAT ANY APPLICATION FORM SHALL SUBSTANTIALLY COMPLY WITH ANY REQUIREMENTS IMPOSED BY THE NAIC; any application for examination or licensure; any examination; any report the act may require; and such other regulations as the commissioner deems necessary. The NAIC condition is the only external constraint in the section and it is attached to the APPLICATION form alone, not to every form. It is the statutory root of the licensing regulations in K.A.R. article 7 that this module keys.

A Kansas public adjuster's written contract must set out eleven things under K.S.A. 40-5514. What is not among them?

1. An estimate of the amount the insurer is expected to pay on the claim. ✓
2. The public adjuster's licence number, and the title 'public adjuster contract'.
3. Attestation language stating that the public adjuster is fully bonded pursuant to the act.
4. The full salary, fee, commission, compensation or other consideration the public adjuster is to receive.

Why: K.S.A. 40-5514(a) requires every contract for a public adjuster's services to be IN WRITING and to contain eleven things: the LEGIBLE FULL NAME of the adjuster signing; the PERMANENT HOME STATE BUSINESS ADDRESS AND PHONE NUMBER; the LICENSE NUMBER; the TITLE OF 'PUBLIC ADJUSTER CONTRACT'; the insured's full name, street address, insurance company name and policy number if known; a description of the loss and its location; a description of the services; the SIGNATURES of adjuster and insured; the DATE each signed; ATTESTATION LANGUAGE STATING THAT THE PUBLIC ADJUSTER IS FULLY BONDED PURSUANT TO THIS ACT; and the FULL SALARY, FEE, COMMISSION, COMPENSATION OR OTHER CONSIDERATIONS the adjuster is to receive. A forecast of the recovery is not among them, and could not be: the act is built on the opposite instinct, requiring the adjuster by (c)(2) to INFORM THE INSURED THAT THE LOSS RECOVERY AMOUNT MIGHT NOT BE INCREASED BY THE INSURER in the case that subsection covers. By (b), if compensation is a share of the settlement THE EXACT PERCENTAGE SHALL BE SPECIFIED, and compensation provisions SHALL NOT BE REDACTED in any copy given to the commissioner. By (g) the contract is executed in duplicate and the adjuster's original must be AVAILABLE AT ALL TIMES FOR INSPECTION WITHOUT NOTICE BY THE COMMISSIONER.

Under K.A.R. 40-7-26, what does the Kansas public adjuster licensing examination test, and what score is required?

1. Kansas statutes and department regulations, the duties and responsibilities of a public adjuster, and basic insurance; at least 70 percent. ✓
2. Kansas statutes and department regulations, the duties and responsibilities of a public adjuster, and basic insurance; at least 60 percent.
3. Kansas statutes and department regulations only; at least 70 percent.
4. Kansas statutes, department regulations, basic insurance and construction estimating; at least 75 percent.

Why: K.A.R. 40-7-26(a) provides that THE PUBLIC ADJUSTER LICENSING EXAMINATION SHALL TEST THE APPLICANT'S KNOWLEDGE IN THE FOLLOWING AREAS: (1) THE LAWS OF KANSAS, INCLUDING ... (A) THE PERTINENT PROVISIONS OF THE STATUTES OF KANSAS; AND (B) THE REGULATIONS OF THE INSURANCE DEPARTMENT; (2) DUTIES AND RESPONSIBILITIES OF A PUBLIC ADJUSTER; AND (3) BASIC INSURANCE. By (b), EACH APPLICANT SHALL BE REQUIRED TO SCORE AT LEAST 70 PERCENT ON THE EXAMINATION, UNLESS THE APPLICANT IS EXEMPT - and the exemptions are the three routes in K.S.A. 40-5507. Seventy per cent is the same pass mark K.A.R. 40-7-13 sets for an insurance agent, so a candidate does not have to hold two numbers. Construction estimating is not a subject area, which is consistent with the act's scheme: a public adjuster who is not competent as to the coverage may not take the claim on at all, by K.S.A. 40-5516(i)(1).

While a Kansas warehouse fire is still burning, a public adjuster approaches the owner on the street to offer services, and mentions a roofing firm he part-owns. Under K.S.A. 40-5516, what has gone wrong?

1. The solicitation only; a referral is a matter for the adjuster's judgment.
2. The referral only; the solicitation of an insured is permitted as soon as the insured is aware that a loss has occurred, whatever stage the loss-producing occurrence itself may happen to have reached by then.
3. Neither, provided the adjuster later puts the contract in writing.
4. Both: soliciting an insured during the progress of a loss-producing occurrence is prohibited, and a referral to a firm in which the adjuster has a financial interest must be disclosed to the insured. ✓

Why: K.S.A. 40-5516 states the public adjuster's duty in unusually strong terms. By (a) the adjuster is OBLIGATED, UNDER THE PUBLIC ADJUSTER'S LICENSE, TO SERVE WITH OBJECTIVITY AND COMPLETE LOYALTY, THE INTEREST OF THE INSURED ONLY. By (b) A PUBLIC ADJUSTER SHALL NOT SOLICIT, OR ATTEMPT TO SOLICIT, AN INSURED DURING THE PROGRESS OF A LOSS-PRODUCING OCCURRENCE, AS DEFINED IN THE INSURED'S INSURANCE CONTRACT - the fire is still burning, so the approach is prohibited outright, not merely regulated. By (f) the adjuster SHALL ABSTAIN FROM REFERRING OR DIRECTING THE INSURED TO GET NEEDED REPAIRS OR SERVICES ... FROM ANY PERSON, UNLESS DISCLOSED TO THE INSURED, where the adjuster has a financial interest or may receive direct or indirect compensation for the referral, and (g) and (h) require disclosure of any interest in or compensation from a construction, salvage, appraisal or repair firm, in writing, including source and amount. The rest of the section forbids letting an unlicensed employee do licensed work, holding an undisclosed interest in the claim, and acquiring an interest in salvage without the insured's written permission after settlement; and by (i) the adjuster must not take on a claim beyond their competence, must not make false or maliciously critical statements about people in the insurance business, and MAY NOT REPRESENT OR ACT AS A COMPANY ADJUSTER OR INDEPENDENT ADJUSTER ON THE SAME CLAIM.

A Kansas stock fire company wants to insure a cattle herd against accident, theft and death, and to add business interruption cover to its fire policies. Under K.S.A. 40-901, may it?

1. Livestock only; consequential loss cover is casualty business reserved to companies licensed under K.S.A. 40-1102.
2. Consequential loss only; livestock insurance is a separate class that requires a company organized for that purpose.
3. Both, if its articles so specify; livestock and consequential loss are each authorized kinds. ✓
4. Neither; K.S.A. 40-901 reaches only direct physical loss to property from the perils named in paragraph (a).

Why: Two of the later paragraphs of K.S.A. 40-901 answer this. Paragraph (f) authorizes insurance AGAINST CONSEQUENTIAL LOSS OR DAMAGE ARISING FROM ANY OF THE CAUSES ABOVE ENUMERATED - the statutory root of business interruption and similar time-element covers, which is why they attach to the perils already insured rather than standing alone. Paragraph (g) authorizes insurance AGAINST LOSS OR DAMAGE TO HORSES, CATTLE, OTHER LIVESTOCK AND DOMESTIC ANIMALS BY ACCIDENT, THEFT OR DEATH, OR AGAINST ANY KNOWN OR CONTINGENT EVENT WHATEVER WHICH MAY LAWFULLY BE THE SUBJECT OF INSURANCE. Between them sits paragraph (e), a residual authority against loss or damage to property FROM ANY CASUALTY, POWER TO INSURE AGAINST WHICH IS NOT PROHIBITED BY THE LAWS OF THIS STATE OR EXCLUSIVELY DELEGATED BY THIS CODE TO ANY OTHER CLASS OR KIND OF COMPANY. All of it is subject to the opening condition: only such kinds AS ARE SPECIFIED IN ITS ARTICLES OF INCORPORATION.

A Kansas public adjuster and a Kansas insurance agent are each charged with a felony. When must each report it to the commissioner?

1. Both on conviction only; K.A.R. 40-7-27 fixes the same trigger for a public adjuster as K.A.R. 40-7-9 does for an agent.
2. The public adjuster on conviction; the agent within 30 days of the initial pre-trial hearing date, the two triggers running the other way about.
3. The public adjuster within 30 days of the initial pre-trial hearing date; the agent reports a conviction. ✓
4. Both within 30 days of the arrest, the report naming the arresting agency, the location and date of the arrest and the nature of the charges.

Why: K.A.R. 40-7-27(b)(2) requires a public adjuster to report THE DETAILS OF EACH CRIMINAL PROSECUTION, OTHER THAN MINOR TRAFFIC VIOLATIONS, WITHIN 30 DAYS OF THE INITIAL PRE-TRIAL HEARING DATE FOR ANY FELONY OFFENSE AND THE FIRST APPEARANCE DATE FOR ANY MISDEMEANOR OFFENSE, the report to include the arresting agency, the location and date of the arrest, the nature of the charges, the court, the judge and the disposition. K.S.A. 40-5517(b) says the same thing in the statute. An AGENT'S duty under K.A.R. 40-7-9(d) is framed round a CONVICTION. Two licence types, one commissioner, opposite trigger points - the public adjuster reports at the START of the prosecution, the agent at its end. The regulation's other periods are both 30 days as well: each change in the information on the application, under (a) and K.S.A. 40-5509, and each administrative action WITHIN 30 DAYS OF FINAL DISPOSITION under (b)(1) and K.S.A. 40-5517(a). Separately, K.S.A. 40-5515 requires a complete record of each transaction - including a register of all moneys received, deposited, disbursed or withdrawn - kept AT LEAST FIVE YEARS after the transaction terminates and open to the commissioner's examination at all times, with anything the adjuster identifies in writing as proprietary treated as confidential and outside the Kansas open records act.

Three of the following contract terms are forbidden to a Kansas public adjuster by K.S.A. 40-5514 and one is expressly permitted. Which is permitted?

1. A term allowing the adjuster to collect the entire fee from the first check the insurer issues.
2. A term naming the public adjuster as a co-payee on the insurer's payment of the claim. ✓
3. A term requiring the insured to authorize the insurer to issue a check only in the adjuster's name.
4. A term imposing collection costs and late fees on an unpaid account.

Why: K.S.A. 40-5514(e) provides that a public adjuster contract MAY NOT CONTAIN ANY CONTRACT TERM THAT (1) ALLOWS THE PUBLIC ADJUSTER'S PERCENTAGE FEE TO BE COLLECTED WHEN MONEY IS DUE FROM AN INSURANCE COMPANY, BUT NOT PAID, OR THAT ALLOWS A PUBLIC ADJUSTER TO COLLECT THE ENTIRE FEE FROM THE FIRST CHECK ISSUED BY AN INSURANCE COMPANY, RATHER THAN AS PERCENTAGE OF EACH CHECK ISSUED; (2) REQUIRES THE INSURED TO AUTHORIZE AN INSURANCE COMPANY TO ISSUE A CHECK ONLY IN THE NAME OF THE PUBLIC ADJUSTER; (3) IMPOSES COLLECTION COSTS OR LATE FEES; OR (4) PRECLUDES A PUBLIC ADJUSTER FROM PURSUING CIVIL REMEDIES. Three of the four options are on that list. What IS permitted is in subsection (b): THE PUBLIC ADJUSTER CONTRACT MAY SPECIFY THAT THE PUBLIC ADJUSTER SHALL BE NAMED AS A CO-PAYEE ON AN INSURER'S PAYMENT OF A CLAIM. The distinction runs through the whole subsection - the adjuster may be paid alongside the insured out of each payment as it comes, but may not be interposed between the insured and the money.

Two Kansas policies both provide personal injury protection for the same injury to one person, one with a $4,500 medical limit and one with a $10,000 medical limit. Under K.S.A. 40-3109, what is the maximum payable from both?

1. $4,500, the lower of the two medical limits governing.
2. $10,000, the highest limit of any one policy. ✓
3. $7,250, the two limits being averaged between the insurers.
4. $14,500, the two policies stacking on one another.

Why: K.S.A. 40-3109(b) provides that IF TWO OR MORE INSURERS OR SELF-INSURERS ARE LIABLE TO PAY PERSONAL INJURY PROTECTION BENEFITS FOR THE SAME INJURY TO ANY ONE PERSON, THE MAXIMUM BENEFITS PAYABLE FROM ALL APPLICABLE POLICIES SHALL BE THE HIGHEST LIMIT OF ANY ONE POLICY PROVIDING SUCH PERSONAL INJURY PROTECTION BENEFITS. The injured person is not confined to the smaller policy - the ceiling is the LARGEST single limit - but neither do the limits add. The rule is a statutory cap on the benefit and needs no policy wording to operate, which distinguishes it from the anti-stacking provision for LIABILITY cover in K.S.A. 40-3107(i)(5), which is an exclusion an insurer may choose to write. Both produce the same arithmetic: reach the highest single limit and stop.

K.S.A. 40-5503 names five people who need no public adjuster licence in Kansas. Which of the following falls outside all five?

1. An attorney admitted to practise in this state, acting in a professional capacity as an attorney.
2. A person employed only to photograph and estimate a loss for a licensed public adjuster.
3. An employee of a licensed health care provider who files a health claim form for a patient.
4. A person paid a percentage of the settlement to negotiate a commercial fire claim for the insured. ✓

Why: K.S.A. 40-5503(c) provides that NOTWITHSTANDING THE PROVISIONS OF THIS SECTION, A LICENSE AS A PUBLIC ADJUSTER SHALL NOT BE REQUIRED OF: (1) AN ATTORNEY-AT-LAW ADMITTED TO PRACTICE IN THIS STATE, WHEN ACTING IN SUCH PERSON'S PROFESSIONAL CAPACITY AS AN ATTORNEY; (2) A PERSON WHO NEGOTIATES OR SETTLES CLAIMS ARISING UNDER A LIFE OR HEALTH INSURANCE POLICY OR AN ANNUITY CONTRACT; (3) A PERSON EMPLOYED ONLY FOR THE PURPOSE OF OBTAINING FACTS SURROUNDING A LOSS OR FURNISHING TECHNICAL ASSISTANCE TO A LICENSED PUBLIC ADJUSTER, INCLUDING PHOTOGRAPHERS, ESTIMATORS, PRIVATE INVESTIGATORS, ENGINEERS AND HANDWRITING EXPERTS; (4) A LICENSED HEALTH CARE PROVIDER, OR EMPLOYEE OF A LICENSED HEALTH CARE PROVIDER, WHO PREPARES OR FILES A HEALTH CLAIM FORM ON BEHALF OF A PATIENT; OR (5) A PERSON WHO SETTLES SUBROGATION CLAIMS BETWEEN INSURERS. Five exceptions, and the qualifications inside them do the work: the attorney must be acting AS an attorney, and the photographer or estimator must be employed ONLY for facts or technical assistance. The remaining option is the core case the definition in 40-5502(l) describes.

Under the BPP, money stolen from a register is not covered. The correct coverage to address this exposure is:

1. The Special Causes of Loss form
2. A commercial crime policy ✓
3. Ordinance or Law
4. Builders Risk

Why: Money and securities are excluded under property forms; theft of money is properly insured under a commercial crime policy.

A Kansas insured sues the uninsured driver without telling her own insurer, and only afterwards claims under the uninsured motorist coverage. Under K.S.A. 40-284, what may the insurer do?

1. Nothing; the grounds permitted by K.S.A. 40-284(e) go to the vehicle and the claimant, and say nothing of how the insured litigates.
2. Exclude coverage only on showing that the want of notice actually prejudiced its defence of the tortfeasor's liability, the burden of proof being the carrier's.
3. Exclude coverage only once the suit against the uninsured motorist has gone to judgment, there being nothing the carrier can point to before then.
4. Exclude or limit coverage; suit filed against the uninsured motorist without notice to the carrier is a permitted ground. ✓

Why: K.S.A. 40-284(e)(5) permits an exclusion or limitation WHEN SUIT IS FILED AGAINST THE UNINSURED MOTORIST WITHOUT NOTICE TO THE INSURANCE CARRIER. The reason is practical: the uninsured motorist insurer will end up paying what the tortfeasor is liable for, so it has a real interest in how that liability is litigated, and a judgment obtained behind its back settles the question without it. Note that the statute states the ground without any requirement that the insurer show prejudice - so an option importing one is adding a condition Kansas has not written. The companion provision on the underinsured side is 40-284(f), keyed in pass 3, which requires written notice by certified mail of a tentative settlement and gives the insurer 60 days to respond.

Three Kansas motor vehicle liability policies, with limits of $100,000, $300,000 and $500,000, all apply to the same accident. Under the exclusion K.S.A. 40-3107 permits, what is the most that can be recovered in total?

1. $300,000, being the middle of the three limits.
2. $600,000, the two lower policies stacking on top of nothing.
3. $900,000, each policy answering for its own limit in full.
4. $500,000, being the highest limit of any one policy. ✓

Why: K.S.A. 40-3107(i)(5) permits an insurer to exclude coverage so that IF TWO OR MORE VEHICLE LIABILITY POLICIES APPLY TO THE SAME ACCIDENT, THE TOTAL LIMITS OF LIABILITY UNDER ALL SUCH POLICIES SHALL NOT EXCEED THAT OF THE POLICY WITH THE HIGHEST LIMIT OF LIABILITY. This is the Kansas anti-stacking provision for liability cover, and the arithmetic is not addition but a ceiling: the claimant reaches the single largest limit and no further, here $500,000. Note that it is drafted as something an insurer MAY exclude, so it operates through the policy wording rather than of its own force, and that the parallel rule for personal injury protection benefits is in a different section - K.S.A. 40-3109(b) caps PIP payable from all applicable policies at THE HIGHEST LIMIT OF ANY ONE POLICY, which is the same idea reached by statute rather than by exclusion.

Two of the Kansas exceptions in K.A.R. 40-1-34 change who the adopted model's automobile total loss provisions protect. What do they do?

1. Delete 'first party' and replace 'insured' with 'claimant'. ✓
2. Delete 'third party' and replace 'claimant' with 'insured'.
3. Delete 'first party' and replace 'claimant' with 'insured'.
4. Add 'first party' and replace 'insured' with 'named insured'.

Why: K.A.R. 40-1-34's exception (k) provides that SECTION 9(a) IS AMENDED BY DELETING THE PHRASE 'FIRST PARTY.' Exception (l) provides that IN SECTION 9(a), SUBSECTION (1) IS AMENDED BY REPLACING THE WORD 'INSURED' WITH THE WORD 'CLAIMANT.' Both move in the same direction and that is the point: Kansas widens the automobile total loss rules from the insurer's own policyholder to ANY CLAIMANT, so a third party whose car is written off by the insured's negligence gets the benefit of the same valuation discipline. Exception (o) completes the thought by adding a subsection dealing expressly with THIRD PARTY automobile total losses. A candidate who assumes claim regulation protects only the insured will misread the whole of this part of the regulation.

Under K.S.A. 40-3118, what is the offence where an owner falsely certifies financial security, or where a person knowingly gives the director false information about another's financial security?

1. A class C misdemeanour in each case, the certification being an administrative form.
2. A class B misdemeanour in each case, matching the offence of driving uninsured.
3. Only the owner offends; a third party giving false information commits no offence.
4. A class A misdemeanour in each case. ✓

Why: K.S.A. 40-3118(i) creates two offences and grades them the same. ANY OWNER OF A MOTOR VEHICLE REGISTERED OR REQUIRED TO BE REGISTERED IN THIS STATE WHO SHALL MAKE A FALSE CERTIFICATION CONCERNING FINANCIAL SECURITY FOR THE OPERATION OF SUCH MOTOR VEHICLE AS REQUIRED BY THIS ACT, SHALL BE GUILTY OF A CLASS A MISDEMEANOR. And ANY PERSON, FIRM OR CORPORATION GIVING FALSE INFORMATION TO THE DIRECTOR CONCERNING ANOTHER'S FINANCIAL SECURITY FOR THE OPERATION OF A MOTOR VEHICLE REGISTERED OR REQUIRED TO BE REGISTERED IN THIS STATE, KNOWING OR HAVING REASON TO BELIEVE THAT SUCH INFORMATION IS FALSE, SHALL BE GUILTY OF A CLASS A MISDEMEANOR. Note the grading: lying about cover is a class A misdemeanour, one class ABOVE the class B misdemeanour that a first offence of actually driving uninsured carries under K.S.A. 40-3104(g)(1). The second limb catches an agent or a company as readily as the owner, and its mental element - KNOWING OR HAVING REASON TO BELIEVE - is satisfied short of actual knowledge.

A Kansas insurer is left with no legally effective rate after the commissioner disapproves its filing. Under K.S.A. 40-955, what happens next?

1. The commissioner specifies an interim rate, effective at once in every contract already in force.
2. The commissioner specifies an interim rate, effective in contracts written or renewed after 15 days. ✓
3. The insurer must stop writing that line until it files a rate the commissioner approves.
4. The insurer may keep charging its disapproved rate until a new filing is approved.

Why: K.S.A. 40-955(f)(2)(A) provides that IN THE EVENT AN INSURER OR ORGANIZATION HAS NO LEGALLY EFFECTIVE RATE BECAUSE OF AN ORDER DISAPPROVING RATES, THE COMMISSIONER SHALL SPECIFY AN INTERIM RATE AT THE TIME THE ORDER IS ISSUED - so the insurer is not put out of the market, which is the third option's assumption. The interim rate MAY BE MODIFIED by the commissioner on the commissioner's own motion or on the insurer's. Under (f)(2)(B) IT TAKES EFFECT PROSPECTIVELY IN CONTRACTS OF INSURANCE WRITTEN OR RENEWED 15 DAYS AFTER THE COMMISSIONER'S DECISION setting it, so contracts already on foot are untouched. Under (f)(2)(C), WHEN THE RATES ARE FINALLY DETERMINED THE COMMISSIONER SHALL ORDER ANY OVERCHARGE IN THE INTERIM RATES TO BE DISTRIBUTED APPROPRIATELY - except that REFUNDS THE COMMISSIONER DETERMINES ARE DE MINIMIS MAY NOT BE REQUIRED.

Employment Practices Liability Insurance (EPLI) covers claims such as:

1. Defects in the products the insured manufactures that injure a consumer
2. Damage to premises the insured rents, caused by a fire it started
3. Wrongful termination, discrimination, harassment, and retaliation by employees ✓
4. Bodily injury to a customer who trips over a floor display inside the insured's retail store

Why: EPLI responds to employment-related claims like discrimination, harassment, wrongful termination, and retaliation.

In the unauthorized insurers false advertising process act, K.S.A. 40-2416 defines 'unfair trade practice law'. What does it mean?

1. K.S.A. 40-2401 through 40-2414, together with 40-2414a and 40-2414b. ✓
2. K.S.A. 40-2401 through 40-2421, being the whole of the article.
3. K.S.A. 40-2404 alone, that being the section defining the practices.
4. Whatever body of law the commissioner designates by regulation.

Why: K.S.A. 40-2416 defines three terms for the act, and the important one is this: 'UNFAIR TRADE PRACTICE LAW' SHALL MEAN K.S.A. 40-2401 THROUGH 40-2414, K.S.A. 40-2414a AND 40-2414b, AND AMENDMENTS THERETO. The definition matters because the false advertising process act works by importing that law and providing service of process for it - K.S.A. 40-2419 makes an unauthorized insurer's acts an appointment of the commissioner as its attorney for proceedings UNDER THE PROVISIONS OF THE UNFAIR TRADE PRACTICE LAW. So the definition draws the line between the machinery and the substance, and it stops short of the process act's own sections, which is what the second option gets wrong. The section also defines 'COMMISSIONER' and defines 'RESIDENTS' to MEAN AND INCLUDE PERSON, PARTNERSHIP OR CORPORATION, DOMESTIC, ALIEN OR FOREIGN.

A Kansas insured reaches a tentative agreement to settle with an underinsured driver for that driver's liability limits. Under K.S.A. 40-284, what must the insured do, and how?

1. Nothing, until the settlement is actually concluded and the money received.
2. Give notice to the underinsured motorist coverage insurer, by any means that can be evidenced.
3. Obtain the underinsured motorist coverage insurer's written consent before agreeing anything.
4. Give written notice to the underinsured motorist coverage insurer, by certified mail. ✓

Why: K.S.A. 40-284(f) provides that IF A TENTATIVE AGREEMENT TO SETTLE FOR LIABILITY LIMITS HAS BEEN REACHED WITH AN UNDERINSURED TORTFEASOR, WRITTEN NOTICE MUST BE GIVEN BY CERTIFIED MAIL TO THE UNDERINSURED MOTORIST COVERAGE INSURER BY ITS INSURED. Three things are fixed and each is tested by a distractor. The trigger is a TENTATIVE agreement, so the duty bites before the settlement is concluded, not after. The form is certified mail, so an email or a telephone call to the adjuster does not discharge it. And it is NOTICE, not consent - the insured does not need the insurer's permission to settle, but must give it the chance to respond, which is what the rest of the subsection is about.

Under K.S.A. 40-966, do the section's prohibitions reach a surety bond?

1. No; suretyship is outside the section, which speaks only of policies of insurance.
2. Yes, but only where the bond was written by an insurer rather than a surety company.
3. Yes, but only for fidelity bonds; other suretyship is outside the section.
4. Yes; 'insurance' includes suretyship and 'policy' includes bond. ✓

Why: K.S.A. 40-966(b) is one line and it does all the work: AS USED IN THIS SECTION, 'INSURANCE' INCLUDES SURETYSHIP AND 'POLICY' INCLUDES BOND. Without it every prohibition in subsection (a) would be argued to stop at contracts called policies, and bonds - where inducements to place business are a live risk - would fall outside. The definition is general: it does not distinguish between kinds of suretyship, so the fourth option's limit to fidelity bonds is invented, nor between kinds of writer, so the third's is too. It matches the reach of the act as a whole, since K.S.A. 40-952(a) applies the fire and casualty rating act to FIDELITY, SURETY AND GUARANTEE BONDS on risks or operations in this state.

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.

Grouping similar exposures together and charging all members of the group the same base rate is known as:

1. Schedule rating
2. Judgment rating
3. Retrospective rating
4. Class (manual) rating ✓

Why: Class rating (manual rating) applies the same rate to all members of a homogeneous group of similar risks.

A Kansas insurer renews an automobile policy, and only afterwards realises a ground for cancellation had existed before the renewal took effect. Under K.S.A. 40-276a, has it lost the point?

1. No; renewal is not a waiver or estoppel as to grounds existing before it took effect. ✓
2. Yes; renewing while the ground was available waives it and estops the insurer from relying on it.
3. Yes, unless the insurer expressly reserved its position in writing at the time of renewal.
4. No; but the insurer must act on that ground within 30 days of the renewal taking effect.

Why: K.S.A. 40-276a provides that RENEWAL OF A POLICY SHALL NOT CONSTITUTE A WAIVER OR ESTOPPEL WITH RESPECT TO GROUNDS FOR CANCELLATION WHICH EXISTED BEFORE THE EFFECTIVE DATE OF SUCH RENEWAL. It is a short provision with a large practical effect: an insurer that renews without knowing of a ground - or without having got to the bottom of one - has not thrown it away, and no reservation of rights is needed to preserve it, which is the third option's addition. Nor does any deadline run from the renewal, which is the fourth's. The section also relieves an insurer of any obligation to renew where renewal WOULD BE CONTRARY TO RESTRICTIONS OF MEMBERSHIP IN THE COMPANY contained in its articles of incorporation or bylaws - the provision that lets a mutual confined to a defined membership decline a member who has left it.

A bar overserves a patron who then injures a third party in a fight. Which coverage is designed to respond to the bar's liability?

1. Workers compensation, because the bartender was on duty when the fight started
2. Liquor Liability / Dram Shop coverage ✓
3. A surety bond posted with the state liquor control board
4. CGL Coverage A, because the patron's injury is bodily injury on the premises

Why: Because the CGL excludes the liquor business's liability, the bar needs liquor liability/dram shop coverage for injuries connected to serving alcohol.

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.

Under the underinsured motorist provision required by K.S.A. 40-284, how much may the insured recover from the insurer?

1. The damages to which the insured is legally entitled, on top of whatever the other driver's insurer pays.
2. The damages to which the insured is legally entitled, to the extent the coverage exceeds the other driver's bodily injury limits. ✓
3. The other driver's bodily injury limits, doubled.
4. The damages to which the insured is legally entitled, less any personal injury protection benefits, without regard to the other driver's limits.

Why: K.S.A. 40-284(b) requires a provision WHICH ENABLES THE INSURED OR THE INSURED'S LEGAL REPRESENTATIVE TO RECOVER FROM THE INSURER THE AMOUNT OF DAMAGES FOR BODILY INJURY OR DEATH TO WHICH THE INSURED IS LEGALLY ENTITLED FROM THE OWNER OR OPERATOR OF ANOTHER MOTOR VEHICLE WITH COVERAGE LIMITS EQUAL TO THE LIMITS OF LIABILITY PROVIDED BY SUCH UNINSURED MOTORIST COVERAGE TO THE EXTENT SUCH COVERAGE EXCEEDS THE LIMITS OF THE BODILY INJURY COVERAGE CARRIED BY THE OWNER OR OPERATOR OF THE OTHER MOTOR VEHICLE. Kansas underinsured motorist cover is therefore a DIFFERENCE, not an addition: the insured's own limit is the ceiling on the total, and the tortfeasor's liability limit is subtracted from it. An insured with the same limits as the other driver recovers nothing under the provision, however large the damages, because there is no excess.

A Kansas casualty company wants to add insurance against fire and marine perils on warehouses and railroad rolling stock. Under K.S.A. 40-1102, what must it hold?

1. Paid-up capital stock of at least $450,000 and a surplus of at least $300,000.
2. Paid-up capital stock of at least $600,000 and a surplus of at least $900,000.
3. Nothing further at all; the residual authority in the last paragraph of that section already covers every single one of these named perils.
4. Paid-up capital stock of at least $900,000, a surplus of at least $600,000, and a deposit equal to not less than the minimum capital stock. ✓

Why: The closing sentence of K.S.A. 40-1102 provides that ANY COMPANY WRITING INSURANCE AGAINST THE LOSS OR DAMAGE CAUSED BY FIRE, LIGHTNING, OR BY THE PERILS OF EITHER MARINE OR INLAND NAVIGATION OR TRANSPORTATION, TO BUILDINGS OR OTHER STRUCTURES ERECTED UPON LAND, TO PIERS, WHARVES, BULKHEADS, WAREHOUSES, MARINE VESSELS, RAILROAD ENGINES, ROLLING STOCK OR EQUIPMENT OF RAILROADS, OR CARRYING CHARGES FOR SHIPMENTS OF FREIGHT SHALL HAVE A PAID-UP CAPITAL STOCK OF AT LEAST $900,000, A SURPLUS OF AT LEAST $600,000, AND SHALL HAVE DEPOSITED, PURSUANT TO K.S.A. 40-229a, FOR THE PROTECTION OF ITS POLICYHOLDERS OR CREDITORS, OR BOTH ... SECURITIES AUTHORIZED BY K.S.A. 40-227, IN AN AMOUNT EQUAL TO NOT LESS THAN THE MINIMUM CAPITAL STOCK REQUIRED, and shall maintain all reserves required by law. These are the same two figures K.S.A. 40-901 requires of a FIRE company that wants to add the 40-1102 kinds - the code sets one price for writing across the line, in whichever direction the company is travelling. The deposit of a company not organized here may be made as provided or with the insurance department of any other state.

An out-of-state corporation applies to the Kansas commissioner for a licence as a rating organisation. Under K.S.A. 40-956, by when must the application be decided, and how long does a licence run?

1. Within 30 days of filing; the licence runs until the following 1 May.
2. Within 60 days of filing; the licence runs until the following 1 May. ✓
3. Within 60 days of filing; the licence runs for one year from issue.
4. There is no deadline; the licence runs until suspended or revoked.

Why: K.S.A. 40-956(a) lets any corporation, association, partnership or individual, WHETHER LOCATED IN OR OUT OF THE STATE, apply for a licence as a rating organisation, filing its constitution or articles and bylaws, A LIST OF ITS MEMBERS AND SUBSCRIBERS, the name and address of A RESIDENT OF THE STATE upon whom service of process or the commissioner's orders may be made together with an IRREVOCABLE AGREEMENT to accept such service, and a statement of its qualification. If the commissioner finds the applicant qualified a licence issues specifying the kinds of insurance it may act for. EVERY SUCH APPLICATION SHALL BE GRANTED OR DENIED IN WHOLE OR IN PART WITHIN 60 DAYS OF THE DATE OF ITS FILING, and LICENSES SHALL CONTINUE IN FORCE UNTIL MAY 1 NEXT AFTER THEIR DATE unless suspended or revoked - a common expiry date rather than an anniversary, which is the third option's error. The fee SHALL NOT EXCEED $25 ANNUALLY. The organisation must notify the commissioner promptly of every change in its structure, members, subscribers or service agent.

PAP Part B — Medical Payments covers:

1. Lost wages and the cost of household services the named insured cannot perform while recovering from the accident
2. Medical expenses of the other driver only, and only after that driver's own liability insurer has denied the claim
3. Repair costs for damage to the covered auto, plus any medical bills the insured cannot recover from the at-fault driver
4. Reasonable medical and funeral expenses for the insured and occupants of the covered auto, regardless of fault ✓

Why: Medical Payments covers reasonable and necessary medical and funeral expenses for an insured injured in an auto accident, paid without regard to fault.

Two days after a Kansas commercial loss is reported, the insurer commits in writing to pay the policy limit. The insured had already engaged a public adjuster on a percentage fee. Under K.S.A. 40-5514, what may the adjuster be paid?

1. The agreed percentage of the total amount paid by the insurer to resolve the claim, the contract having been duly signed before the insurer made any commitment at all to pay the policy limit.
2. Nothing at all; the contract is void once the insurer commits to the policy limit.
3. Reasonable compensation for services provided, based on time spent and expenses incurred until the claim is paid or the written commitment is received; and no percentage commission. ✓
4. The agreed percentage, reduced by half, the adjuster having secured no increase.

Why: K.S.A. 40-5514(c) provides that IF THE INSURER, NOT LATER THAN 72 HOURS AFTER THE DATE ON WHICH THE LOSS IS REPORTED TO THE INSURER, EITHER PAYS OR COMMITS IN WRITING TO PAY TO THE INSURED THE POLICY LIMIT OF THE INSURANCE POLICY, THE PUBLIC ADJUSTER SHALL (1) NOT RECEIVE A COMMISSION CONSISTING OF A PERCENTAGE OF THE TOTAL AMOUNT PAID BY AN INSURER TO RESOLVE A CLAIM; (2) INFORM THE INSURED THAT THE LOSS RECOVERY AMOUNT MIGHT NOT BE INCREASED BY THE INSURER; AND (3) BE ENTITLED ONLY TO REASONABLE COMPENSATION FROM THE INSURED FOR SERVICES PROVIDED ... BASED ON THE TIME SPENT ON A CLAIM AND EXPENSES INCURRED BY THE PUBLIC ADJUSTER, UNTIL THE CLAIM IS PAID OR THE INSURED RECEIVES A WRITTEN COMMITMENT TO PAY FROM THE INSURER. Two days is inside the 72 hours. The rule addresses a real abuse - a percentage of a total loss the insurer was always going to pay in full - without leaving the adjuster unpaid for work actually done. Note the trigger is the insurer's speed, not the adjuster's conduct, and that a written COMMITMENT counts as much as payment.

How often must the Kansas commissioner examine a licensed rating organization, who pays, and can the examination be dispensed with?

1. At least once in three years; the costs fall on the commissioner's own examination budget; and no waiver is available, whatever another state's supervisory official has lately done.
2. At least once in five years; the organization examined pays the reasonable costs on presentation of a detailed account of them; and no waiver is available, even on filing another state's examination report.
3. Only on the complaint of an insurer or of the public; the complainant bears the reasonable costs; and the commissioner may waive the examination at discretion.
4. At least once in five years; the organization pays the reasonable costs; and the commissioner may waive it on proof of a recent examination by another state's supervisory official. ✓

Why: K.S.A. 40-956(d) provides that THE COMMISSIONER, AT LEAST ONCE IN FIVE YEARS, SHALL MAKE OR CAUSE TO BE MADE AN EXAMINATION OF EACH RATING ORGANIZATION LICENSED IN THIS STATE, and that THE REASONABLE COSTS OF SUCH EXAMINATION SHALL BE PAID BY THE RATING ORGANIZATION EXAMINED, UPON PRESENTATION TO IT OF A DETAILED ACCOUNT OF SUCH COST. The examination has teeth: officers, managers, agents and employees MAY BE EXAMINED UNDER OATH AND SHALL EXHIBIT ALL BOOKS, RECORDS, ACCOUNTS, DOCUMENTS OR AGREEMENTS GOVERNING ITS METHOD OF OPERATION. And there is a waiver, which is the limb candidates miss: THE COMMISSIONER MAY WAIVE SUCH EXAMINATION UPON PROOF SUCH RATING ORGANIZATION HAS, WITHIN A REASONABLY RECENT PERIOD, BEEN EXAMINED BY THE INSURANCE SUPERVISORY OFFICIAL OF ANOTHER STATE, AND UPON FILING WITH THE COMMISSIONER A COPY OF THE REPORT OF SUCH EXAMINATION. Rating organizations operate in many states, and the waiver stops each one repeating the same work.

Under K.S.A. 40-905, must improvements on Kansas real property be insured for more than their replacement cost, and does the section create a cause of action?

1. No to the first, yes to the second; the section is privately enforceable.
2. No to both; nor does it prohibit an inflation guard provision. ✓
3. Yes to the first, so that the valued policy rule always produces full value.
4. No to both; and an inflation guard provision is prohibited.

Why: K.S.A. 40-905(a)(2) adds three qualifications to the valued policy rule. IMPROVEMENTS ON REAL PROPERTY SHALL NOT BE REQUIRED TO BE INSURED FOR MORE THAN THE REASONABLY ESTIMATED REPLACEMENT COST OF SUCH IMPROVEMENTS - so the rule does not force over-insurance. NOTHING HEREIN SHALL PROHIBIT A POLICY OR ENDORSEMENT FROM CONTAINING AN INFLATION GUARD PROVISION OR SIMILAR PROVISION, which is the fourth option's error and matters because an inflation guard raises the sum insured automatically and so raises what the valued policy rule will pay. And NOTHING IN THIS SECTION SHALL BE DEEMED TO CREATE A PRIVATE CAUSE OF ACTION - the rule is a measure of damages in a claim on the policy, not a free-standing right to sue, which is the second option's error. The paragraph defines IMPROVEMENTS ON REAL PROPERTY as A FIXTURE, BUILDING OR OTHER STRUCTURE ATTACHED TO REAL PROPERTY AND INTENDED AS A PERMANENT ADDITION TO IT.

A Kansas claimant recovers from the association after an insurer's liquidation. Under K.S.A. 40-2909, what happens to the claimant's rights, and what is expected of the claimant?

1. The rights under the policy are extinguished, and nothing further is required of the claimant.
2. The rights under the policy remain wholly with the claimant, who may afterwards pursue the liquidator or receiver of the insolvent insurer for the whole of the outstanding balance without any limit at all upon it.
3. The rights under the policy are assigned in full whatever the size of the recovery, and cooperation is voluntary.
4. The rights under the policy are assigned to the association to the extent of the recovery, and the claimant must cooperate with the association as they would have had to cooperate with the insolvent insurer. ✓

Why: K.S.A. 40-2909(a) provides that ANY PERSON RECOVERING UNDER THIS ACT SHALL BE DEEMED TO HAVE ASSIGNED HIS RIGHTS UNDER THE POLICY TO THE ASSOCIATION TO THE EXTENT OF HIS RECOVERY FROM THE ASSOCIATION, and that EVERY INSURED OR CLAIMANT SEEKING THE PROTECTION OF THIS ACT SHALL COOPERATE WITH THE ASSOCIATION TO THE SAME EXTENT AS SUCH PERSON WOULD HAVE BEEN REQUIRED TO COOPERATE WITH THE INSOLVENT INSURER. TO THE EXTENT OF HIS RECOVERY is what makes the last option wrong - a claimant paid the $300,000 cap on a larger claim keeps the balance of the claim against the estate. The subsection also protects the insured: THE ASSOCIATION SHALL HAVE NO CAUSE OF ACTION AGAINST THE INSURED OF THE INSOLVENT INSURER FOR ANY SUMS IT HAS PAID OUT, EXCEPT SUCH CAUSES OF ACTION AS THE INSOLVENT INSURER WOULD HAVE HAD. By (b) the receiver, liquidator or statutory successor IS BOUND BY SETTLEMENTS OF COVERED CLAIMS BY THE ASSOCIATION, the claims take the priority the claimant would have had, and the association's claim-handling expenses rank with the liquidator's own.

A Kansas agent is asked to issue a certificate of insurance adding a coverage the policy does not provide. Under K.S.A. 40-955, what is the position?

1. A certificate cannot modify, alter or amend the policy it describes. ✓
2. A certificate may add coverage once the insurer countersigns it.
3. A certificate may add coverage on a large risk exempt from filing.
4. A certificate is a contract with its holder and may add coverage.

Why: K.S.A. 40-955(b) requires CERTIFICATE OF INSURANCE FORMS TO BE FILED WITH THE COMMISSIONER AND APPROVED PRIOR TO USE, and then adds - NOTWITHSTANDING THE 'LARGE RISK' FILING EXEMPTION IN SUBSECTION (i) - that A CERTIFICATE OF INSURANCE CANNOT BE USED TO MODIFY, ALTER OR AMEND THE INSURANCE POLICY IT DESCRIBES. That express override is what defeats the third option. The certificate must carry language to the effect that IT NEITHER AFFIRMATIVELY NOR NEGATIVELY AMENDS, EXTENDS OR ALTERS THE COVERAGE AFFORDED BY THE POLICIES LISTED THEREON. A countersignature changes nothing, because the certificate is evidence of the policy rather than a contract in its own right. An industry standard setting organisation may be authorised by the commissioner to file certificate forms on behalf of authorised insurers.

A Kansas owner lends an uninsured car to a friend, who has no idea it is uninsured and drives it on a public highway. Under K.S.A. 40-3104, who has offended?

1. The owner; permitting operation needs no knowledge, but driving must be knowing. ✓
2. The friend only; the prohibition falls on whoever is at the wheel.
3. Both; the section makes owner and driver equally liable however innocent.
4. Neither of them, unless the vehicle is involved in an accident while it is being driven.

Why: The two prohibitions in K.S.A. 40-3104 are worded differently and the difference is the whole item. Subsection (b): AN OWNER OF AN UNINSURED MOTOR VEHICLE SHALL NOT PERMIT THE OPERATION THEREOF UPON A HIGHWAY OR UPON PROPERTY OPEN TO USE BY THE PUBLIC, unless the vehicle is expressly exempted - no mental element, because the owner is the person who knows whether the premium was paid. Subsection (c): NO PERSON SHALL KNOWINGLY DRIVE AN UNINSURED MOTOR VEHICLE upon such a highway or property. KNOWINGLY is the operative word for the driver, so the friend who has been told nothing has not committed the (c) offence. Note also that both prohibitions reach PROPERTY OPEN TO USE BY THE PUBLIC as well as highways, so a shop car park is within them, and neither depends on an accident happening.

A Kansas automobile liability policy is 30 days old. A separate policy is a renewal in its first week. Under K.S.A. 40-277, when do the limits on the insurer's right to cancel apply to each?

1. To the new policy after 60 days; to the renewal after a further 60 days.
2. To both immediately; the limits are a condition of issuing the policy.
3. To the new policy after 60 days; to the renewal immediately. ✓
4. To the new policy after 30 days; to the renewal immediately on issue.

Why: K.S.A. 40-277 forbids any insurer to ISSUE a policy of automobile liability insurance in this state UNLESS THE CANCELLATION CONDITION OF THE POLICY OR ENDORSEMENT INCLUDES the limitations the section then prints - so the limits reach the insurer through a compulsory policy term rather than directly. The printed condition opens: AFTER THIS POLICY HAS BEEN IN EFFECT FOR 60 DAYS, OR IF THE POLICY IS A RENEWAL, EFFECTIVE IMMEDIATELY, THE COMPANY SHALL NOT EXERCISE ITS RIGHT TO CANCEL THE INSURANCE AFFORDED SOLELY BECAUSE OF AGE OR UNLESS one of the listed grounds applies. Two different starting points in one clause, which is what the item tests - a new policy gives the insurer sixty days of free underwriting, a renewal gives none, because the insurer has already had its look. And 'SOLELY BECAUSE OF AGE' is a flat prohibition sitting outside the grounds list altogether: no waiting period makes it available.

A witness at a Kansas unfair trade practices hearing asks to be excused on the ground that the evidence may incriminate them, and is directed to give it anyway. Under K.S.A. 40-2413, what must they do and what do they get?

1. Comply; but the immunity reaches only the penalty the commissioner could himself impose.
2. Comply; and they may not afterwards be prosecuted for the matters they testify about. ✓
3. They may refuse; a commissioner's direction cannot override the privilege against self-incrimination.
4. Comply; and the testimony may still be received against them in a later criminal action.

Why: K.S.A. 40-2413 provides that a person who asks to be excused from attending, testifying or producing documents on the ground that the evidence MAY TEND TO INCRIMINATE HIM OR SUBJECT HIM TO A PENALTY OR FORFEITURE, and is NOTWITHSTANDING DIRECTED to give it, MUST NONETHELESS COMPLY - BUT HE SHALL NOT THEREAFTER BE PROSECUTED OR SUBJECTED TO ANY PENALTY OR FORFEITURE FOR OR ON ACCOUNT OF ANY TRANSACTION, MATTER OR THING CONCERNING WHICH HE MAY TESTIFY OR PRODUCE EVIDENCE, AND NO TESTIMONY SO GIVEN OR EVIDENCE PRODUCED SHALL BE RECEIVED AGAINST HIM UPON ANY CRIMINAL ACTION, INVESTIGATION OR PROCEEDING. That is transactional immunity, not a mere use bar, so the second and fourth options both understate it - and compulsion is the price, so the third is wrong too. The section is how the act gets evidence out of the people who have it.

Which federal law would a producer most likely consult to determine whether a previously convicted individual may lawfully work in the insurance business?

1. The CAN-SPAM Act
2. The Fair Credit Reporting Act
3. 18 U.S.C. §§ 1033 and 1034 ✓
4. The Terrorism Risk Insurance Act

Why: 18 U.S.C. 1033 and 1034 govern whether persons convicted of crimes involving dishonesty may engage in the business of insurance and the penalties for violations.

An action was pending against the Kansas superintendent of insurance when the insurance code renamed the office. Under K.S.A. 40-105, what happened to it?

1. It abated, and had to be recommenced against the commissioner of insurance.
2. It continued, but only after the title of the action had been formally substituted.
3. It continued against the superintendent personally, the office having ceased to exist.
4. It continued without change in title and bound the parties exactly as before. ✓

Why: K.S.A. 40-105 is a transitional section and it does three things. It ADOPTS all laws relating to the powers, duties, authority and jurisdiction of the commissioner that the code did not repeal, and DECLARES THE THEN SUPERINTENDENT TO BE THE COMMISSIONER for the term for which he was elected. It provides that ALL PENDING ACTIONS BROUGHT BY OR AGAINST THE SUPERINTENDENT MAY BE CONTINUED WITHOUT CHANGE IN TITLE AND SHALL BE BINDING UPON THE PARTIES TO THE SAME EXTENT AS THOUGH SUBSTITUTION OF HIS NEW STYLE OF OFFICE HAD BEEN MADE - so no substitution was needed, which is the third option's error. And it preserves the standing of companies and fraternal benefit societies already chartered and licensed, declaring them legally organized and existing and unaffected by the code's organisation provisions.

A candidate for a Kansas insurance licence is found to have used notes during the examination. Under K.S.A. 40-4909, what may follow?

1. Denial of the licence; improper use of reference material is a listed ground. ✓
2. Nothing under this section; the only remedy is to void the examination result and require a retest.
3. Denial of the licence, but only where the notes bore on the class of business being examined.
4. A censure only; the section reaches licence holders, not applicants.

Why: K.S.A. 40-4909(a)(11) makes it a ground that the person has IMPROPERLY USED NOTES OR ANY OTHER REFERENCE MATERIAL TO COMPLETE AN EXAMINATION FOR AN INSURANCE LICENSE ISSUED UNDER THIS ACT. Two features are keyed. The subsection applies to AN APPLICANT as well as a LICENCE HOLDER, so the fourth option's premise - that the section reaches only conduct after licensing - is wrong on the face of it. And the ground is not confined to notes about the class being examined; 'any other reference material' is deliberately broad. It sits alongside (a)(3), obtaining or attempting to obtain a licence THROUGH MISREPRESENTATION OR FRAUD, and (a)(1), providing incorrect, misleading, incomplete or untrue information in the application - three separate ways of failing the honesty test before the licence is even issued.

A Kansas stock company whose charter permits it wants to add surety bonds and bodily injury liability to the fire business it already writes. Under K.S.A. 40-901, what does it need?

1. Paid-up capital of at least $450,000 and a surplus of at least $300,000, the same two figures that let it write fire business.
2. Paid-up capital of at least $600,000 and a surplus of at least $900,000, the surplus figure being the larger of the two.
3. Nothing further; K.S.A. 40-1102 business is open to any fire company.
4. Paid-up capital of at least $900,000 and a surplus of at least $600,000. ✓

Why: K.S.A. 40-901 provides that ANY STOCK COMPANY WITH CHARTER POWERS SO TO DO AND HAVING A PAID-UP CAPITAL STOCK OF AT LEAST $900,000 AND A SURPLUS OF AT LEAST $600,000, MAY IN ADDITION TO THE KINDS AND CLASSES OF BUSINESS MENTIONED IN THIS SECTION, TRANSACT THE KINDS AND CLASSES OF BUSINESS MENTIONED IN K.S.A. 40-1102, INCLUDING SURETY BONDS AND EXCEPT AS HEREIN SPECIFIED, INSURANCE AGAINST LOSS BY REASON OF BODILY INJURIES AS PROVIDED FOR IN K.S.A. 40-1102, AND SHALL MAINTAIN ALL RESERVES REQUIRED BY LAW FOR THE KINDS AND CLASS OF BUSINESS TRANSACTED. Note the order of the two figures, which the second distractor reverses: capital $900,000, surplus $600,000 - twice the entry figures of $450,000 and $300,000 in the section's opening words. Charter power is a separate condition from the financial one, and a company executing suretyship obligations is then subject to K.S.A. 40-1107.

Under the BACF, coverage for autos the named insured does not own, hire, or borrow but that are used in the business by employees is most economically added through:

1. Specified causes of loss physical damage endorsed onto each employee's personal auto, with a separate premium charged for every vehicle
2. Non-owned auto liability (Symbol 9), which carries no separate vehicle premium for owned units ✓
3. Garagekeepers coverage added to the business auto policy, which insures autos of others while they are in the named insured's care, custody, or control
4. Symbol 1 physical damage, which sweeps any auto the business uses into the schedule

Why: Symbol 9 non-owned liability is typically rated on a flat or employee/exposure basis rather than per scheduled auto, providing economical vicarious-liability protection.

Supplementary payments in a liability policy typically include:

1. The insured's lost earnings for every day spent assisting with the defense, with no dollar cap
2. Defense costs, bail bond premiums, and reasonable expenses incurred at the insurer's request ✓
3. Punitive damages awarded against the insured, paid in addition to the applicable limit of liability
4. The replacement cost of property the insured damaged

Why: Supplementary (additional) payments cover items like defense costs, certain bonds, and the insured's expenses incurred assisting the defense, often beyond the limit.

A client asks for flood coverage; the producer forgets to bind it, and a flood later destroys the home. This situation most directly creates exposure under:

1. The producer's E&O (errors and omissions) coverage ✓
2. The TRIA backstop, which reimburses uncovered flood losses
3. Federal crop insurance through the Risk Management Agency
4. The federal Do-Not-Call rules

Why: Failing to obtain requested coverage is a classic errors and omissions claim against the producer.

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 foreign casualty insurer authorized in Kansas reports surplus below the minimum required by law. Under K.S.A. 40-1105, what must the commissioner do?

1. Place the company under supervision and allow a reasonable period to restore the surplus.
2. Revoke its certificate of authority at once, without the hearing K.S.A. 40-222 provides.
3. Revoke its certificate of authority, in accordance with the hearing provisions of K.S.A. 40-222. ✓
4. Nothing; K.S.A. 40-1105 reaches domestic companies only.

Why: K.S.A. 40-1105 provides that WHENEVER THE SURPLUS OF ANY DOMESTIC OR FOREIGN INSURANCE COMPANY AUTHORIZED TO TRANSACT ANY OF THE KINDS OR CLASSES OF BUSINESS SPECIFIED IN SECTION 40-1102 OF THIS ARTICLE SHALL BE LESS THAN THE MINIMUM SURPLUS REQUIRED BY LAW, THE COMMISSIONER OF INSURANCE SHALL REVOKE THE CERTIFICATE OF AUTHORITY OF SUCH CORPORATION TO DO BUSINESS, IN ACCORDANCE WITH THE HEARING PROVISIONS SET FORTH IN K.S.A. 40-222. Three features. SHALL, not may - the section leaves the commissioner no discretion once the condition is met. DOMESTIC OR FOREIGN alike, which disposes of the last option. And the revocation runs through the K.S.A. 40-222 hearing provisions, so it is not summary - the company gets the process that section provides before the certificate goes.

K.S.A. 40-1102 authorizes kinds of insurance and reinsurance. Which companies may write them, and how much of the list may one company take?

1. Any insurance company, life companies included; all or any one or more of the kinds in any class.
2. Any insurance company other than a life insurance company; all or any one or more of the kinds comprised in any one of the numbered classes, subject to its articles of incorporation and the code. ✓
3. Any insurance company other than a life insurance company; but only one single kind of insurance, drawn from whichever one of the numbered classes of business it selects for itself at the outset.
4. Only a company organized under the laws of this state; all or any one or more of the kinds in any one class.

Why: K.S.A. 40-1102 provides that ANY INSURANCE COMPANY, OTHER THAN A LIFE INSURANCE COMPANY, ORGANIZED UNDER THE LAWS OF THIS STATE OR AUTHORIZED TO TRANSACT BUSINESS IN THIS STATE MAY MAKE ALL OR ANY ONE OR MORE OF THE KINDS OF INSURANCE AND REINSURANCE COMPRISED IN ANY ONE OF THE FOLLOWING NUMBERED CLASSES, SUBJECT TO AND IN ACCORDANCE WITH ITS ARTICLES OF INCORPORATION AND THE PROVISIONS OF THIS CODE. Four things are settled in that sentence. Life companies are outside it. Both domestic and admitted foreign companies are inside it. A company may take the whole of a class or any part of it, so the enumeration is a menu rather than a set of separate licences. And the articles of incorporation are a limit on top of the statute, exactly as they are for a fire company under K.S.A. 40-901.

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

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

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

Under the PAP, the limit of liability for Part A applies:

1. Separately to each claim with no per-accident cap, so every claimant injured in one collision may collect the full stated limit
2. As the most paid regardless of the number of insureds, claims, vehicles, or persons involved (per the limits shown) ✓
3. Per insured separately, so two insureds riding in one auto double the limit available for that accident
4. Doubled when two or more vehicles are listed on the same declarations page

Why: The Part A limit of liability is the most the insurer will pay for one accident regardless of the number of insureds, claims, vehicles, or persons (subject to split/CSL terms).

A tenant rents space and is contractually responsible for fire damage to the landlord's building. The best coverage is:

1. Legal Liability Coverage (fire legal/property) ✓
2. Personal property of others under Coverage C
3. Business income
4. Builders Risk

Why: Legal Liability Coverage protects a tenant against liability for fire (or other covered peril) damage to property of others in their care, such as a leased building.

What must the written notice of a tentative settlement include under K.S.A. 40-284?

1. Written documentation of pecuniary losses, copies of all medical bills, and written authorization or a court order to obtain reports from all employers and medical providers. ✓
2. The settlement figure and the tortfeasor's policy number.
3. A sworn proof of loss in the form prescribed by the commissioner of insurance, supported by an itemised statement of the damages claimed and a copy of the tentative agreement itself.
4. Nothing beyond notice that a tentative agreement has been reached.

Why: K.S.A. 40-284(f) provides that SUCH WRITTEN NOTICE SHALL INCLUDE WRITTEN DOCUMENTATION OF PECUNIARY LOSSES INCURRED, INCLUDING COPIES OF ALL MEDICAL BILLS AND WRITTEN AUTHORIZATION OR A COURT ORDER TO OBTAIN REPORTS FROM ALL EMPLOYERS AND MEDICAL PROVIDERS. The list is not decoration. The insurer has only 60 days to decide whether to substitute its own payment for the tentative settlement, and it cannot make that decision without knowing the size of the claim - so the statute makes the insured hand over the material that lets it be valued, and the authorization that lets the insurer go behind the paperwork to the employers and providers themselves. An insured who sends a bare notice has not complied. Note the parallel with the personal injury protection insurer's investigative powers in K.S.A. 40-3114 and 40-3115.

The voluntary and intentional giving up of a known right is called:

1. Estoppel
2. Waiver ✓
3. Concealment
4. Subrogation

Why: A waiver is the intentional and voluntary relinquishment of a known legal right.

Under K.A.R. 40-7-7, who may make a company certification of a Kansas resident agent?

1. An authorised representative of the insurance company itself, and nobody else at all.
2. A representative of the company, or of an entity holding a direct agency appointment. ✓
3. The agent being certified, on the company's written authority.
4. Any licensed agent of the company doing business in the same county.

Why: K.A.R. 40-7-7(b) provides that COMPANY CERTIFICATION SHALL BE MADE ONLY BY AN AUTHORIZED REPRESENTATIVE OF THE INSURANCE COMPANY OR, ON AND AFTER MAY 1, 1989, BY AN AUTHORIZED REPRESENTATIVE OF A CORPORATION, ASSOCIATION, PARTNERSHIP, PROPRIETORSHIP, OR OTHER LEGAL ENTITY HOLDING A DIRECT AGENCY APPOINTMENT FROM AN INSURANCE COMPANY. So the agency can certify its own people where it holds the direct appointment, which is what the second option denies, but nobody certifies themselves. Subsection (a) fixes the contents - THE COMPANY NAME, THE NAME AND ADDRESS OF THE AGENT TO BE CERTIFIED, THE EFFECTIVE DATE, AND THE ADDRESS OF THE OFFICE SUBMITTING IT. Subsection (c) adds a deeming rule worth knowing: FOR PURPOSES OF COMPANY CERTIFICATION, A LICENSED DIRECTOR, EMPLOYEE, OR NONRESIDENT OFFICER OF A RESIDENT AGENCY SHALL BE DEEMED TO BE A RESIDENT AGENT.

The Information Page of the Workers Compensation policy is most analogous to which component of other commercial policies?

1. The endorsement schedule
2. The declarations page ✓
3. The exclusions section
4. The conditions section

Why: The Information Page functions like a declarations page, showing the insured, policy period, listed states, classifications, premium basis, and limits for Part Two.

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

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

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

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

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

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

A Kansas automobile policy has been continuously in effect for six years. Under K.S.A. 40-276a, may the insurer decline to renew it, and from when does the period run?

1. Yes; five years' continuous effect is a ground, running from the policy's effective date.
2. No; a policy that has been continuously in effect for five years cannot be nonrenewed.
3. Yes; five years' continuous effect is a ground, running from the first anniversary. ✓
4. Yes, but only where the insurer also shows substantial unfavourable underwriting factors.

Why: K.S.A. 40-276a(a)(5) makes it a circumstance in which renewal may be denied that THE POLICY HAS BEEN CONTINUOUSLY IN EFFECT FOR A PERIOD OF FIVE YEARS - and fixes the start: SUCH FIVE-YEAR PERIOD SHALL BEGIN AT THE FIRST POLICY ANNIVERSARY DATE FOLLOWING THE EFFECTIVE DATE OF THE POLICY. So the clock starts a year in, not at inception, which is the second option's error and can matter by a full year. The paragraph then makes the cycle repeat: IF SUCH POLICY IS RENEWED OR CONTINUED IN FORCE AFTER THE EXPIRATION OF SUCH PERIOD OR ANY SUBSEQUENT FIVE-YEAR PERIOD, THE PROVISIONS SHALL APPLY IN ANY SUCH SUBSEQUENT PERIOD. The ground stands on its own and needs no other justification, which is what the fourth option adds - the effect is that a Kansas motorist has five years of near-security and then a window in which the insurer may simply leave.

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.

A Kansas claimant's disability allowances are of a kind not includable in gross income for federal income tax purposes. Under K.S.A. 40-3103, what percentage of the loss of monthly earnings is allowed?

1. 100%, the tax treatment of the allowance being irrelevant.
2. 85%, the reduction applying because the allowance is not taxed. ✓
3. 100%, but only where the injured person was regularly employed.
4. The percentage set by the policy, the statute prescribing no figure.

Why: K.S.A. 40-3103(b)(2) provides that SUBJECT TO THE MAXIMUM BENEFITS STATED HEREIN, ALLOWANCES SHALL EQUAL 100% OF ANY SUCH LOSS PER INDIVIDUAL, UNLESS SUCH ALLOWANCES ARE DEEMED NOT INCLUDABLE IN GROSS INCOME FOR FEDERAL INCOME TAX PURPOSES, IN WHICH EVENT SUCH ALLOWANCES SHALL BE LIMITED TO 85%. The logic is replacement of NET earnings: where the benefit is untaxed, paying the whole of the gross loss would leave the claimant better off than working, so the statute trims it to 85%. Two other conditions sit alongside in the same definition: by (b)(1) the injury must be the PROXIMATE CAUSE of the inability to engage in AVAILABLE AND APPROPRIATE GAINFUL ACTIVITY, and by (b)(3) the allowance runs up to a maximum of not less than $900 per month for not more than one year.

A building worth $800,000 has 80% coinsurance. The insured carries $700,000. A $100,000 loss occurs. After applying coinsurance, how much is paid (before deductible)?

1. $70,000
2. $80,000
3. $87,500
4. $100,000 ✓

Why: Required = 80% x $800,000 = $640,000. The insured carries $700,000, which exceeds the requirement, so no penalty applies and the full $100,000 is paid.

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.

Under K.S.A. 40-957, what is an advisory organization, and what distinguishes it from a rating organization?

1. It makes filings on behalf of its own members but does not collect loss or expense statistics.
2. It advises the commissioner on rate adequacy but has no dealings with insurers.
3. It is a rating organization that operates outside this state.
4. It assists insurers or rating organizations with statistics or advice but makes no filings. ✓

Why: K.S.A. 40-957(a) defines an advisory organization as EVERY GROUP, ASSOCIATION OR OTHER ORGANIZATION OF INSURERS, WHETHER LOCATED WITHIN OR OUTSIDE THIS STATE, ASSISTING INSURERS WHICH MAKE THEIR OWN FILINGS OR RATING ORGANIZATIONS IN RATE MAKING, BY THE COLLECTION AND FURNISHING OF LOSS OR EXPENSE STATISTICS, OR BY THE SUBMISSION OF RECOMMENDATIONS, BUT WHICH DOES NOT MAKE FILINGS UNDER THIS ACT. The distinguishing feature is the absence of filings, not location - which is the fourth option's error - and it deals with insurers rather than with the commissioner, which is the third's. Subsection (b) requires each advisory organization to file its constitution, articles or certificate and its bylaws and rules; A LIST OF ITS MEMBERS; the name and address of A RESIDENT OF THIS STATE for service of notices, orders and process, with a written agreement to accept them; and AN AGREEMENT THAT THE COMMISSIONER MAY EXAMINE IT.

The CGL excludes bodily injury 'expected or intended from the standpoint of the insured.' This is the:

1. Expected or intended injury exclusion ✓
2. Pollution exclusion
3. Contractual liability exclusion
4. Employer's liability exclusion

Why: The expected or intended injury exclusion removes coverage for intentional harm, preserving the fortuity principle.

The Kansas commissioner orders a rate decrease and the insurer petitions for review. Under K.S.A. 40-965, what may the insurer charge in the meantime, and on what condition?

1. The prior rates, unconditionally, until the court determines the matter.
2. The ordered rates, the petition not affecting the commissioner's order.
3. The prior rates, if the insurer gives the commissioner written notice of its intention.
4. The prior rates, if the difference in premiums is deposited with the commissioner. ✓

Why: K.S.A. 40-965 provides that THE FILING OF A PETITION FOR REVIEW OF ANY ACTION OF THE COMMISSIONER UNDER THIS ACT SHALL ACT AS A STAY OF SUCH ACTION IF IT PROVIDES FOR A CHANGE IN ANY RATING SYSTEM RESULTING IN AN INCREASE OR DECREASE IN PREMIUMS - so the petition itself stays the order, which the third option denies. Any insurer affected MAY CONTINUE TO CHARGE RATES WHICH OBTAINED PRIOR TO THE ORDER, ON CONDITION THAT THE DIFFERENCE IN PREMIUMS SHALL BE DEPOSITED WITH THE COMMISSIONER. On final determination the commissioner pays the deposit to the insurer if the court finds it entitled, or TO THE HOLDERS OF POLICIES WRITTEN AFTER THE RATE COMPLAINED OF WAS ORDERED, as the court deems just and equitable. THE COURT, AT ITS DISCRETION, IN LIEU OF SUCH DEPOSIT, MAY REQUIRE OF THE INSURER A BOND with such sureties and in such sum as it approves. The deposit or bond is what makes the stay conditional rather than free.

A ship's captain orders cargo jettisoned to keep the vessel from sinking in a storm; the ship and remaining cargo are saved. The loss to the jettisoned cargo is handled as:

1. General average, shared by all interests ✓
2. A constructive total loss of the vessel, payable in full to the shipowner
3. An excluded loss, because the captain sacrificed the cargo on purpose
4. Particular average, borne solely by the owner of the jettisoned cargo

Why: Voluntarily sacrificing cargo to save the venture is a general average loss, shared proportionally among ship, cargo, and freight interests.

Agreed value (agreed amount) provisions are used primarily to:

1. Cover punitive damages awarded against the insured
2. Waive the coinsurance requirement by agreeing on a value in advance ✓
3. Reduce the policy limit by the amount of each paid claim
4. Substitute a flat 25% deductible for the coinsurance penalty

Why: Under an agreed value option, the insurer and insured agree on the property's value in advance, suspending the coinsurance penalty.

An insured who, knowing they are fully covered, becomes careless about locking doors exhibits which type of hazard?

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

Why: A morale hazard is carelessness or indifference to loss because the person knows insurance will cover it.

Under K.S.A. 40-1136, which of these does NOT make a person a 'title insurance agent'?

1. Determining insurability and issuing title insurance reports or policies on a search or abstract.
2. Collecting or disbursing premiums, escrow or security deposits or other funds.
3. Being a bona fide employee of the title insurer who does those things for it. ✓
4. Handling escrow, settlements or closings, or recording closing documents.

Why: K.S.A. 40-1136(e) defines TITLE INSURANCE AGENT as AN AUTHORIZED PERSON, OTHER THAN A BONA FIDE EMPLOYEE OF THE TITLE INSURER WHO, ON BEHALF OF THE TITLE INSURER, PERFORMS THE FOLLOWING ACTS, IN CONJUNCTION WITH THE ISSUANCE OF A TITLE INSURANCE REPORT OR POLICY: (1) DETERMINES INSURABILITY AND ISSUES TITLE INSURANCE REPORTS OR POLICIES, OR BOTH, BASED UPON THE PERFORMANCE OR REVIEW OF A SEARCH, OR AN ABSTRACT OF TITLE; (2) COLLECTS OR DISBURSES PREMIUMS, ESCROW OR SECURITY DEPOSITS OR OTHER FUNDS; (3) HANDLES ESCROW, SETTLEMENTS OR CLOSINGS; (4) SOLICITS OR NEGOTIATES TITLE INSURANCE BUSINESS; OR (5) RECORDS CLOSING DOCUMENTS. The bona fide employee carve-out is the answer, and it matters: an insurer's own staff doing this work are the insurer, and the act's obligations - trust accounts, audits, the $100,000 bond - fall on the independent agency, not on them. Note the OR at the end of the list: any one of the five acts is enough.

Which of these obliges the Kansas commissioner to remove an insurer from the list of eligible nonadmitted insurers?

1. The insurer has failed to effectuate prompt, fair and equitable payment of just losses in this state. ✓
2. The insurer has declined to write a class of business that the commissioner considers to be needed.
3. The insurer's premium volume in this state has fallen below the level of the preceding calendar year.
4. The insurer has been the subject of a consumer complaint which the department has upheld.

Why: K.S.A. 40-246e(b) provides that the commissioner SHALL REMOVE AN INSURER'S NAME FROM THE LISTING ONLY WHEN one of six things happens - the word ONLY makes the list exhaustive. They are: the insurer REQUESTS removal; it FAILS TO FILE ITS LATEST ANNUAL STATEMENT BEFORE MAY 1; the commissioner is notified by a state supervisory authority that its authority has been RESTRICTED or that it has been DECLARED INSOLVENT OR PLACED IN RECEIVERSHIP, CONSERVATORSHIP, REHABILITATION or similar formal supervision; the commissioner is notified by the NAIC of the same as to an insurer domiciled outside the United States; it HAS FAILED TO EFFECTUATE REASONABLY PROMPT, FAIR AND EQUITABLE PAYMENT OF JUST LOSSES AND CLAIMS IN THIS STATE; or it ENCOURAGES, PROMOTES OR REWARDS AN AGENT TO VIOLATE K.S.A. 40-246b. Subsection (d) protects the commissioner, the department's employees and the state from liability for a name appearing or not appearing on the list, provided it is maintained in good faith and without malice.

A Kansas pedestrian is injured by a hit-and-run driver who is never identified, and she owns no vehicle. Under K.S.A. 40-3116, where does she look for personal injury protection benefits, and what would bar her?

1. The assigned claims plan; nothing at all bars a claim once it is shown that no other personal injury protection benefits can be identified.
2. The assigned claims plan; she would be barred if she owned a vehicle the act required her to insure and had not insured it. ✓
3. The Kansas insurance guaranty association, which answers for unidentified vehicles.
4. Nowhere; the act provides no benefits where no insurer can be identified.

Why: K.S.A. 40-3116(a) directs insurers and self-insurers to organize and maintain an ASSIGNED CLAIMS PLAN so that a person injured in Kansas may obtain PIP through it where (1) PIP benefits are not otherwise available; (2) MOTOR VEHICLE LIABILITY INSURANCE OR SELF-INSURANCE APPLICABLE TO THE INJURY CANNOT BE IDENTIFIED - the hit-and-run case; or (3) the applicable benefits are inadequate because of an insurer's financial inability, in which case plan benefits are EXCESS OVER any paid or payable through the Kansas insurance guaranty association. Subsection (c) is the bar: A PERSON SHALL NOT BE ENTITLED TO PERSONAL INJURY PROTECTION BENEFITS THROUGH THE ASSIGNED CLAIMS PLAN ... IF, AT THE TIME OF SUCH INJURY, SUCH PERSON WAS THE OWNER OF A MOTOR VEHICLE FOR WHICH A POLICY ... IS REQUIRED UNDER THIS ACT AND SUCH PERSON FAILED TO HAVE SUCH POLICY IN EFFECT. The plan is not voluntary for the industry: by (e) no insurer may write motor vehicle liability insurance here, and no person may qualify as a self-insurer, without participating, on pain of a civil penalty of not more than $5,000 for each policy or certificate. On and after 1 January 2026 the governing committee is five members - three representing insurers, one independent agents and one the general public.

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.

Two Kansas title insurance agents are attorneys: one issues title policies as part of representing clients, the other is exclusively in the title insurance business. Under K.S.A. 40-1137, which must have the annual escrow audit?

1. The one exclusively in the title insurance business; the one who issues policies as part of legal representation is exempt, though the title insurer may audit at its own expense. ✓
2. Neither; K.S.A. 40-1137(d) exempts every title insurance agent who is an attorney, the exemption turning on admission to the bar and not on the nature of the work the agent actually does.
3. The one who issues title policies as part of the legal representation of clients; an attorney exclusively in the business of title insurance is outside the annual audit requirement altogether.
4. Both; the annual audit by a certified public accountant is required of every title insurance agent without exemption.

Why: K.S.A. 40-1137(d) requires EACH TITLE INSURANCE AGENT to HAVE AN ANNUAL AUDIT MADE OF ITS ESCROW, SETTLEMENT AND CLOSING DEPOSIT ACCOUNTS, CONDUCTED BY A CERTIFIED PUBLIC ACCOUNTANT OR BY A TITLE INSURER FOR WHICH THE TITLE INSURANCE AGENT HAS A LICENSING AGREEMENT, and to PROVIDE A COPY OF THE AUDIT REPORT TO THE COMMISSIONER UPON REQUEST. Then the two sentences this item turns on: TITLE INSURANCE AGENTS WHO ARE ATTORNEYS AND WHO ISSUE TITLE INSURANCE POLICIES AS PART OF THEIR LEGAL REPRESENTATION OF CLIENTS ARE EXEMPT FROM THE REQUIREMENTS OF THIS SUBSECTION. HOWEVER, THE TITLE INSURER, AT ITS EXPENSE, MAY CONDUCT OR CAUSE TO BE CONDUCTED AN ANNUAL AUDIT OF THE ESCROW, SETTLEMENT AND CLOSING ACCOUNTS OF THE ATTORNEY. ATTORNEYS WHO ARE EXCLUSIVELY IN THE BUSINESS OF TITLE INSURANCE ARE NOT EXEMPT FROM THE REQUIREMENTS OF THIS SUBSECTION. Being an attorney is not the test; practising law is. By subsection (e) the commissioner may set the standards of the audit and the form of the report by rules and regulations.

What does a Kansas member insurer receive for paying an assessment, and what may it do with it, under K.S.A. 40-2906?

1. A certificate of contribution, which is a debt of the association repayable on demand.
2. A credit against premium tax, which it may take in the year of payment.
3. A certificate of contribution, which may be shown in its financial statement as an asset in such form, amount and for such period as the commissioner may approve. ✓
4. Nothing at all; an assessment is simply an expense of doing insurance business in this state and leaves no instrument or certificate of any kind at all behind it.

Why: K.S.A. 40-2906(c) provides that THE ASSOCIATION SHALL ISSUE TO EACH INSURER PAYING AN ASSESSMENT UNDER THIS ACT A CERTIFICATE OF CONTRIBUTION, IN A FORM PRESCRIBED BY THE COMMISSIONER, FOR THE AMOUNT SO PAID. ALL OUTSTANDING CERTIFICATES SHALL BE OF EQUAL DIGNITY AND PRIORITY WITHOUT REFERENCE TO AMOUNTS OR DATES OF ISSUE. A CERTIFICATE OF CONTRIBUTION MAY BE SHOWN BY THE INSURER IN ITS FINANCIAL STATEMENT AS AN ASSET IN SUCH FORM AND FOR SUCH AMOUNT, IF ANY, AND PERIOD OF TIME AS THE COMMISSIONER MAY APPROVE. Three things follow. It is not a debt repayable on demand - what comes back, if anything, comes back under 40-2906(b)(6), which lets the board refund a year-end excess of assets over estimated liabilities in proportion to each member's contribution. It is an accounting asset only so far as the commissioner allows, and IF ANY concedes that the allowance may be nil. And EQUAL DIGNITY AND PRIORITY means no member gains by having paid first. The real recoupment route is elsewhere: K.S.A. 40-2914 lets the assessment be built into rates.

An applicant is being assessed for a Kansas public adjuster licence. Which of these does K.S.A. 40-5505 not make a condition of issue?

1. Being at least 18 years of age and having passed the public adjuster examination.
2. Holding a resident insurance agent licence in this state. ✓
3. Being trustworthy, reliable and of good reputation, and financially responsible.
4. Maintaining an office in the home state with public access during regular business hours or by reasonable appointment.

Why: K.S.A. 40-5505(a) requires the commissioner to find that the applicant IS ELIGIBLE TO DESIGNATE THIS STATE AS THE APPLICANT'S HOME STATE or is a nonresident not eligible under K.S.A. 40-5508; HAS NOT COMMITTED ANY ACT THAT IS A GROUND FOR DENIAL, SUSPENSION OR REVOCATION under K.S.A. 40-5510; IS TRUSTWORTHY, RELIABLE AND OF GOOD REPUTATION; IS FINANCIALLY RESPONSIBLE ... AND HAS PROVIDED PROOF OF FINANCIAL RESPONSIBILITY AS REQUIRED IN K.S.A. 40-5511; HAS PAID AN APPLICATION FEE NOT TO EXCEED $100; AND MAINTAINS AN OFFICE IN THE HOME STATE WITH PUBLIC ACCESS DURING REGULAR BUSINESS HOURS OR BY REASONABLE APPOINTMENT. Subsection (b) adds that the applicant shall BE AT LEAST 18 YEARS OF AGE and HAVE SUCCESSFULLY PASSED THE PUBLIC ADJUSTER EXAMINATION. An agent licence is nowhere among them - this is a separate licence for a separate occupation. By (d) the commissioner may require fingerprinting and a state and national criminal history record check, at the applicant's cost, and by (e) must set and publish the application fee in the Kansas register not later than 1 December each year.

The Personal and Advertising Injury Limit in the CGL is:

1. Identical to the Medical Expense Limit and shared with it for each person injured
2. A per-person-and-per-offense limit that is also subject to the General Aggregate ✓
3. Unlimited for offenses such as libel, slander, and wrongful eviction once defense costs begin
4. One aggregate covering Coverages A, B, and C combined for the term

Why: The Personal and Advertising Injury Limit caps damages per person/organization for one offense and is subject to the General Aggregate.

Under K.S.A. 40-2408, when does an order of the Kansas commissioner under the unfair trade practices act become final?

1. When the commissioner signs it; a petition for review does not affect its own finality.
2. Only on the final decision of a court on review, whether or not anyone has sought review.
3. When the time for a petition for review expires unfiled, or on the court's decision. ✓
4. Thirty days after service on the insurer, whether or not a petition for review is filed.

Why: K.S.A. 40-2408(a) gives an order under K.S.A. 40-2407 two routes to finality. It becomes final UPON THE EXPIRATION OF THE TIME ALLOWED FOR FILING A PETITION FOR REVIEW IF NO SUCH PETITION HAS BEEN DULY FILED WITHIN SUCH TIME - except that THE COMMISSIONER MAY THEREAFTER MODIFY OR SET ASIDE THE ORDER to the extent K.S.A. 40-2407(b) allows, so even then it is not beyond recall; or UPON THE FINAL DECISION OF THE COURT ON REVIEW IF THE COURT DIRECTS THAT THE ORDER BE AFFIRMED OR THE PETITION DISMISSED. Both routes require something to happen or a time to run, which is why the second option is wrong, and the first route needs no court at all, which is why the third is.

Under farm property coverage, livestock such as cattle and horses are usually covered:

1. Only while in transit aboard an ocean vessel to an export market
2. For every cause of loss on an open-perils basis, with no per-animal limit applied
3. On a named-peril basis (e.g., death by lightning, accidental shooting), often with per-animal limits ✓
4. Under the dwelling coverage of the farm form, which is extended to animals kept in the barn and the adjoining pasture

Why: Farm livestock is typically insured on a named-peril basis (lightning, fire, certain accidents) and is frequently subject to per-animal and aggregate limits.