Montana Property & Casualty Insurance License, Practice Exams

Job classification codes in workers' compensation are used to:

1. Record the state in which the employee's home office sits, so that benefits follow that state's schedule
2. Group jobs by their expected loss exposure to set appropriate rates ✓
3. Set the dollar amount of death benefits payable to a surviving spouse and dependent children
4. Determine how many days a worker must be disabled before indemnity benefits begin

Why: Classification codes group occupations by similar hazard/loss potential so that a rate reflecting that exposure can be applied to the payroll in each class.

When may an agent disobey the principal's instructions under MCA 28-10-408, and what authority can an agent never have under MCA 28-10-409?

1. An agent may never disobey instructions, the agent's duty being one of strict obedience whatever the circumstances and whatever the cost to the principal of waiting for fresh instructions. An agent may have ostensible authority to do an act which is a fraud upon the principal where the third person did not know of the fraud.
2. An agent has power to disobey instructions whenever the agent believes in good faith that it is for the interest of the principal to do so, whether or not there was time to communicate with the principal. An agent may have actual but never ostensible authority to do an act known to the third person to be a fraud upon the principal.
3. An agent has power to disobey instructions where it is clearly for the interest of the principal and there is insufficient time to communicate. An agent can never have actual authority to defraud the principal, but may have ostensible authority to do so, since ostensible authority rests upon the belief of the third person rather than on any grant.
4. An agent has power to disobey instructions in dealing with the subject of the agency where it is clearly for the interest of the principal and there is insufficient time to communicate with the principal. An agent can never have authority, actual or ostensible, to do an act known or suspected by the person dealing with the agent to be a fraud. ✓

Why: MCA 28-10-408: AN AGENT HAS POWER TO DISOBEY INSTRUCTIONS IN DEALING WITH THE SUBJECT OF THE AGENCY IN CASES IN WHICH IT IS CLEARLY FOR THE INTEREST OF THE AGENT'S PRINCIPAL THAT THE AGENT SHOULD DO SO AND THERE IS INSUFFICIENT TIME TO COMMUNICATE WITH THE PRINCIPAL. BOTH conditions. MCA 28-10-409: AN AGENT CAN NEVER HAVE AUTHORITY, EITHER ACTUAL OR OSTENSIBLE, TO DO AN ACT THAT IS AND IS KNOWN OR SUSPECTED BY THE PERSON WITH WHOM THE AGENT DEALS TO BE A FRAUD UPON THE PRINCIPAL. KNOWN OR SUSPECTED - suspicion is enough to destroy the authority.

What two further rules does the Montana valued policy law state in MCA 33-24-102?

1. The payment of money as a premium for insurance must be prima facie evidence that the party paying the insurance premium is the owner of the property insured; and any insurance company may assert fraud in obtaining the policy as a defense to a suit on the policy. ✓
2. That the insurer must pay the amount of insurance within 30 days of the total loss, and that the insured must apply the proceeds to rebuilding the improvements destroyed, any surplus being returned to the insurer once the work has been completed and certified.
3. That the amount of insurance is conclusive on a partial loss as well as a total one, in the proportion the damaged part bears to the whole; and that the insurer may not assert any defence to a suit on the policy once the loss has been shown to be total.
4. That the person paying the premium is conclusively the owner of the property, so that title need not be proved in a suit on the policy; and that fraud in obtaining the policy is no defence once the premium has been accepted by the insurer for the period of the loss.

Why: MCA 33-24-102: THE PAYMENT OF MONEY AS A PREMIUM FOR INSURANCE MUST BE PRIMA FACIE EVIDENCE THAT THE PARTY PAYING THE INSURANCE PREMIUM IS THE OWNER OF THE PROPERTY INSURED. HOWEVER, ANY INSURANCE COMPANY MAY ASSERT FRAUD IN OBTAINING THE POLICY AS A DEFENSE TO A SUIT ON THE POLICY. PRIMA FACIE, not conclusive - the conclusive word belongs to the amount of insurance on a total loss.

A Montana applicant has no credit history at all and no insurance score can be calculated. What may the insurer do under MCA 33-18-605(1)(e)?

1. It must treat the consumer as if the consumer had neutral credit information, that being the single course the subsection allows, the definition of neutral credit information being prescribed by the commissioner by rule rather than left to the insurer to settle.
2. Only if it does one of three things: treat the consumer as otherwise approved by the commissioner, on information that the absence relates to the risk; treat the consumer as having neutral credit information; or exclude credit information and use other rules. ✓
3. It may decline the risk, an absence of credit information being treated by the part as equivalent to adverse credit information, provided the insurer also considers another applicable underwriting factor which is independent of any credit information at all.
4. It must obtain a consumer report from a second consumer reporting agency before making any decision, and if no score can be calculated from that report either, it must write the risk at its most favourably priced tier within its group of affiliated insurers.

Why: MCA 33-18-605(1)(e): an insurer may not CONSIDER AN ABSENCE OF CREDIT INFORMATION OR AN INABILITY TO CALCULATE AN INSURANCE SCORE in underwriting or rating personal insurance UNLESS THE INSURER DOES ONE OF THE FOLLOWING - (i) TREATS THE CONSUMER AS OTHERWISE APPROVED BY THE COMMISSIONER IF THE INSURER PRESENTS INFORMATION THAT THE ABSENCE OR INABILITY RELATES TO THE RISK FOR THE INSURER; (ii) TREATS THE CONSUMER AS IF THE CONSUMER HAD NEUTRAL CREDIT INFORMATION, AS DEFINED BY THE INSURER; or (iii) EXCLUDES THE USE OF CREDIT INFORMATION AS A FACTOR AND USES ONLY OTHER UNDERWRITING CRITERIA. The insurer chooses, and it is the INSURER that defines neutral credit information.

Montana is the home state. What must be shown before a contract may be placed with an unauthorized insurer under MCA 33-2-302(2)(a)?

1. That the producing producer has applied to and been declined by every insurer authorized to write that line in this State, and has filed the declinations with the commissioner before the coverage is bound with the unauthorized insurer concerned.
2. That the insurer is an eligible surplus lines insurer; that the line cannot be obtained from authorized insurers - evidenced by a diligent effort with three insurers actually transacting that line here, by the approved risk list, or by natural disaster multiperil. ✓
3. That the commissioner has approved the placement in advance, the surplus lines law operating by prior authorization rather than by after-the-event reporting; the approved risk list is a standing approval for the kinds of insurance appearing on it in this State.
4. That the insurer is eligible and that the insured has signed a statement acknowledging that the insurer is not covered by the guaranty fund; no search of the admitted market is required in Montana, the diligent effort requirement having been repealed by the NRRA in 2010.

Why: MCA 33-2-302(2)(a): a producing producer may request a surplus lines producer to place, or a surplus lines producer may place, a contract with an unauthorized insurer IF (i) THE INSURER IS AN ELIGIBLE SURPLUS LINES INSURER; (ii) THE LINE OF INSURANCE OR THE FULL AMOUNT OF THE LINE CANNOT BE OBTAINED FROM AUTHORIZED INSURERS or, on a renewal, HAS NOT BECOME AVAILABLE from one, AS EVIDENCED BY (A) THE PRODUCING INSURANCE PRODUCER MAKING A DILIGENT EFFORT TO PLACE THE BUSINESS WITH A MINIMUM OF THREE INSURERS AUTHORIZED AND ACTUALLY TRANSACTING THAT LINE OF BUSINESS IN THIS STATE - IF FEWER THAN THREE ARE, DILIGENT EFFORT MUST BE MET BY SEARCHING THIS LESSER MARKET; (B) THE APPEARANCE ON THE CURRENT APPROVED RISK LIST OF THE KIND OF INSURANCE BEING SOUGHT; or (C) THE INSURANCE IS NATURAL DISASTER MULTIPERIL INSURANCE; and (iii) ALL OTHER REQUIREMENTS OF THIS PART ARE MET.

Who bears the cost of an additional examination under MCA 33-1-311(4)?

1. The state. The commissioner may conduct examinations and investigations in addition to those expressly authorised, as the commissioner considers proper, and the cost of those additional examinations must be borne by the state. ✓
2. The person examined, in every case, the code placing the cost of any examination on the insurer or other person whose affairs are examined as part of the cost of doing insurance business in this State under the commissioner's supervision.
3. The person examined, unless the examination finds no violation, in which case the state bears the cost, the subsection making the outcome of the examination determine who pays for it under the insurance code of this State.
4. The state, but only where the commissioner has first obtained the approval of the legislative audit committee for the additional examination, the subsection requiring that approval before any cost may be charged to the general fund.

Why: MCA 33-1-311(4): the commissioner MAY CONDUCT EXAMINATIONS AND INVESTIGATIONS OF INSURANCE MATTERS, IN ADDITION TO EXAMINATIONS AND INVESTIGATIONS EXPRESSLY AUTHORIZED, AS THE COMMISSIONER CONSIDERS PROPER, to determine whether any person has violated any provision or to secure information useful in the lawful administration of any provision. THE COST OF ADDITIONAL EXAMINATIONS AND INVESTIGATIONS MUST BE BORNE BY THE STATE. Contrast 33-1-315(4), where witness costs fall on a person FOUND TO HAVE BEEN IN VIOLATION.

When may a Montana agent delegate the agent's powers under MCA 28-10-501?

1. An agent may delegate in any case whatever, unless the principal has specially forbidden delegation, the four cases listed in the section being examples of the agent's general powers of delegation rather than an exclusive list, so that an agent may appoint a subagent to perform any part of the agency which the agent finds it convenient to have performed by another person.
2. Unless specially forbidden by the principal to do so, the agent may delegate in any of the following cases and in no others: when the act to be done is purely mechanical; when the agent cannot and the subagent can lawfully perform the act; when it is the usage of the place to delegate the powers; or when the delegation is specially authorized by the principal. ✓
3. Only when the delegation is specially authorized by the principal in writing. The fact that the act is purely mechanical, that the agent cannot lawfully perform it, or that it is the usage of the place to delegate, gives the agent no power to appoint a subagent under this chapter without the principal's written authorization.
4. Unless specially forbidden, when the act is purely mechanical, when the agent cannot and the subagent can lawfully perform it, when it is the usage of the place to delegate, or whenever the agent judges that the interests of the principal would be better served by a subagent than by the agent performing the act personally.

Why: MCA 28-10-501: AN AGENT, UNLESS SPECIALLY FORBIDDEN BY THE PRINCIPAL TO DO SO, CAN DELEGATE THE AGENT'S POWERS TO ANOTHER PERSON IN ANY OF THE FOLLOWING CASES AND IN NO OTHERS: (1) WHEN THE ACT TO BE DONE IS PURELY MECHANICAL; (2) WHEN THE AGENT CANNOT AND THE SUBAGENT CAN LAWFULLY PERFORM THE ACT; (3) WHEN IT IS THE USAGE OF THE PLACE TO DELEGATE THE POWERS; OR (4) WHEN THE DELEGATION IS SPECIALLY AUTHORIZED BY THE PRINCIPAL. AND IN NO OTHERS - the list is exclusive.

The Ordinance or Law endorsement provides coverage for:

1. The insured's liability to the city for operating in violation of building codes
2. Increased costs from enforcement of building codes after a covered loss ✓
3. Flood damage to the building whenever a local ordinance requires floodproofing
4. Earthquake shake damage only, in designated seismic zones

Why: Ordinance or Law covers loss to the undamaged portion, demolition costs, and increased construction costs required to comply with current building codes after a covered loss.

The DP-3 (Special Form) insures the dwelling and other structures on what basis?

1. Open perils (all risks except those excluded) ✓
2. Broad form named perils, the DP-2 list
3. Liability and medical payments only
4. Basic form named perils, the DP-1 list

Why: DP-3 provides open-perils (special form) coverage on the dwelling and other structures, covering all causes of loss except those specifically excluded.

When does property cease to be an 'import' for Montana inland marine purposes?

1. When it has cleared customs and duty has been paid, that being the point at which the federal interest in the goods ends and they become ordinary domestic property subject to the general property insurance provisions of this State rather than to the marine definition.
2. When it has been in storage for more than 90 days, whatever has happened to it in the meantime, the definition placing a time limit on the import character of goods so that warehoused merchandise is not carried indefinitely on an inland marine form.
3. When it has been sold and delivered by the importer, factor or consignee; removed from storage and placed on sale as part of an importer's stock in trade; or delivered for manufacture, processing or change in form to the premises of the importer or another. ✓
4. When it has been sold by the importer, whether or not delivered; delivery for manufacture or processing does not end the import character of the goods, which continue to be insurable on a marine form until they are sold to an ultimate purchaser in this country.

Why: MCA 33-1-223(2): PROPERTY IS AN IMPORT AND THE PROPER SUBJECT OF MARINE, INLAND MARINE, OR TRANSPORTATION INSURANCE AS LONG AS THE PROPERTY REMAINS SEGREGATED IN SUCH A WAY THAT IT CAN BE IDENTIFIED AND HAS NOT BECOME INCORPORATED INTO AND MIXED WITH THE GENERAL MASS OF PROPERTY IN THE UNITED STATES. PROPERTY CEASES TO BE AN IMPORT when it has been (a) SOLD AND DELIVERED BY THE IMPORTER, FACTOR, OR CONSIGNEE; (b) REMOVED FROM ITS PLACE OF STORAGE AND PLACED ON SALE AS PART OF AN IMPORTER'S STOCK IN TRADE AT A POINT OF SALE OR DISTRIBUTION; or (c) DELIVERED FOR MANUFACTURE, PROCESSING, OR CHANGE IN FORM TO PREMISES OF THE IMPORTER OR ANOTHER, TO BE USED FOR SUCH PURPOSES. (1): IMPORTS ARE COVERED WHEREVER THEY ARE LOCATED, WITHOUT RESTRICTION AS TO TIME, provided the coverage INCLUDES HAZARDS OF TRANSPORTATION.

Which of the following is true about how WC indemnity benefits interact with maximum and minimum limits?

1. No statutory ceiling or floor applies; the weekly check is simply two-thirds of the worker's own average wage
2. Weekly benefits are subject to statutory maximums and minimums tied to the state average wage ✓
3. A statutory maximum caps the weekly benefit, but no minimum exists, so a low-wage worker receives whatever the percentage yields
4. The weekly benefit always equals one hundred percent of the worker's pre-injury wage until maximum medical improvement

Why: Indemnity benefits are generally a percentage of average weekly wage but capped by a statutory maximum and floored by a minimum, often tied to the statewide average weekly wage.

An insurer routinely offers far less than claims are worth so that insureds must sue, and lets insureds know it appeals arbitration awards. Which paragraphs of MCA 33-18-201 are engaged?

1. Paragraph (7) - compelling insureds to institute litigation by offering substantially less than the amounts ultimately recovered; and paragraph (11) - making known a policy of appealing from arbitration awards in their favor to compel acceptance of a smaller sum. ✓
2. Paragraph (6) alone, because both practices are ways of neglecting to attempt in good faith to effectuate a prompt, fair and equitable settlement of a claim in which liability has become reasonably clear, and the section does not deal separately with either of them.
3. Paragraphs (7) and (8): offering substantially less than is ultimately recovered, and attempting to settle a claim for less than the amount to which a reasonable person would have believed himself entitled, an appeal from arbitration awards in the insureds' favour not being listed at all.
4. None. Both practices are dealt with by the independent cause of action in 33-18-242 rather than by the list in 33-18-201, which is confined to the investigation and acknowledgment of claims and to the explanation an insurer must give when it denies one outright.

Why: MCA 33-18-201(7): COMPEL INSUREDS TO INSTITUTE LITIGATION TO RECOVER AMOUNTS DUE UNDER AN INSURANCE POLICY BY OFFERING SUBSTANTIALLY LESS THAN THE AMOUNTS ULTIMATELY RECOVERED IN ACTIONS BROUGHT BY THE INSUREDS. (11): MAKE KNOWN TO INSUREDS OR CLAIMANTS A POLICY OF APPEALING FROM ARBITRATION AWARDS IN FAVOR OF INSUREDS OR CLAIMANTS FOR THE PURPOSE OF COMPELLING THEM TO ACCEPT SETTLEMENTS OR COMPROMISES LESS THAN THE AMOUNT AWARDED IN ARBITRATION. Paragraph (8) is the separate practice of attempting to settle FOR LESS THAN THE AMOUNT TO WHICH A REASONABLE PERSON WOULD HAVE BELIEVED THE PERSON WAS ENTITLED BY REFERENCE TO WRITTEN OR PRINTED ADVERTISING MATERIAL accompanying or made part of an application; (9) is settling on the basis of AN APPLICATION ALTERED WITHOUT NOTICE TO OR KNOWLEDGE OR CONSENT OF THE INSURED; and (10) is making CLAIMS PAYMENTS NOT ACCOMPANIED BY STATEMENTS SETTING FORTH THE COVERAGE under which they are made.

Who is an ADJUSTER under MCA 33-17-102(1), and who is excluded?

1. A person who, on behalf of the insurer, for compensation as or for an independent contractor or for a fee or commission, investigates and negotiates the settlement of claims - excluding a licensed attorney, a salaried employee of an insurer, and a licensed producer or third-party administrator who adjusts. ✓
2. Any person who investigates or settles a claim arising under an insurance contract, whether for the insurer or for the insured, the definition drawing no distinction between the two and reaching salaried claims staff of an insurer as well as independent contractors engaged for the purpose.
3. A person retained by an insured to present and negotiate that insured's claim against the insurer, which is the only adjusting function the chapter licenses, the insurer's own claim handling being supervised through the unfair claims settlement practices provisions rather than through a licence.
4. A licensed attorney, salaried employee of an insurer or licensed producer who investigates a loss, the definition being framed to capture exactly those persons and to require each of them to hold an adjuster licence before handling a claim arising under a policy issued in this State.

Why: MCA 33-17-102(1)(a): ADJUSTER means a person who, ON BEHALF OF THE INSURER, for compensation AS AN INDEPENDENT CONTRACTOR OR AS THE EMPLOYEE OF AN INDEPENDENT CONTRACTOR OR FOR A FEE OR COMMISSION, INVESTIGATES AND NEGOTIATES THE SETTLEMENT OF CLAIMS arising under insurance contracts or otherwise acts on behalf of the insurer. (b) the term DOES NOT INCLUDE a LICENSED ATTORNEY qualified to practise here; a SALARIED EMPLOYEE OF AN INSURER OR OF A MANAGING GENERAL AGENT; a LICENSED INSURANCE PRODUCER who adjusts or assists in adjustment of losses under policies issued by the insurer; a LICENSED THIRD-PARTY ADMINISTRATOR who does so; or a CLAIMS EXAMINER as defined in 39-71-116. A PUBLIC ADJUSTER, by contrast, is 33-17-102(21) - an adjuster RETAINED BY AND REPRESENTING THE INTERESTS OF THE INSURED.

What limits do MCA 28-10-213 to 215 place on ratification?

1. An unauthorized act may be made valid retroactively against third persons whether or not they consent, the whole purpose of ratification being to relate the authority back to the time of the act. A ratification is valid whether or not the principal could have conferred authority at the time of ratifying, and a ratification once made may never be rescinded.
2. No unauthorized act can be made valid retroactively to the prejudice of third persons without their consent. A ratification is not valid unless, at the time of ratifying the act, the principal has power to confer authority for it. A ratification may be rescinded when made with an imperfect knowledge of the material facts, but not in any other case. ✓
3. No unauthorized act can be made valid retroactively to the prejudice of third persons without their consent, and a ratification is not valid unless the principal had power to confer authority for the act at the time the act was done rather than at the time of ratifying it. A ratification may be rescinded at will by the principal at any time.
4. No unauthorized act can be made valid retroactively to the prejudice of third persons. A ratification is not valid unless the principal has power to confer authority at the time of ratifying, and a ratification may be rescinded whenever the principal afterwards discovers any fact about the transaction which was not known at the time of ratifying it.

Why: MCA 28-10-213: NO UNAUTHORIZED ACT CAN BE MADE VALID RETROACTIVELY TO THE PREJUDICE OF THIRD PERSONS WITHOUT THEIR CONSENT. MCA 28-10-214: A RATIFICATION IS NOT VALID UNLESS, AT THE TIME OF RATIFYING THE ACT DONE, THE PRINCIPAL HAS POWER TO CONFER AUTHORITY FOR SUCH AN ACT. MCA 28-10-215: A RATIFICATION MAY BE RESCINDED WHEN MADE WITHOUT SUCH CONSENT AS IS REQUIRED IN A CONTRACT OR WITH AN IMPERFECT KNOWLEDGE OF THE MATERIAL FACTS OF THE TRANSACTION RATIFIED, BUT NOT OTHERWISE. AT THE TIME OF RATIFYING - the power is tested then, not at the time of the act.

Which policies does the Montana financial responsibility part NOT affect, under MCA 61-6-136?

1. Policies of automobile insurance against liability that are required by any other law of this state; and policies insuring solely the named insured against liability resulting from the maintenance or use by persons in the insured's employ of motor vehicles not owned by the insured. ✓
2. Policies of automobile insurance required by any other law of this state, which may never be certified as proof of financial responsibility under this part however they are endorsed; and policies insuring the named insured against liability arising from the use by the insured's employees of vehicles which the insured does own.
3. Policies issued to a nonresident by a carrier authorized in the state in which the vehicle is registered, and policies of automobile insurance written in excess of the limits required by 61-6-103, the excess or additional coverage not being subject to the provisions of this part under subsection (7) of that section of the code.
4. Policies of automobile insurance required by any other law of this state, and policies insuring solely the named insured against liability from the use by persons in the insured's employ of vehicles not owned by the insured. Neither kind may be certified as proof of financial responsibility in any circumstances under this part.

Why: MCA 61-6-136(1): THIS PART DOES NOT APPLY TO OR AFFECT POLICIES OF AUTOMOBILE INSURANCE AGAINST LIABILITY THAT ARE REQUIRED BY ANY OTHER LAW OF THIS STATE, AND THOSE POLICIES, IF THEY CONTAIN AN AGREEMENT OR ARE ENDORSED TO CONFORM TO THE REQUIREMENTS OF THIS PART, MAY BE CERTIFIED AS PROOF OF FINANCIAL RESPONSIBILITY UNDER THIS PART. (2): THIS PART DOES NOT APPLY TO OR AFFECT POLICIES INSURING SOLELY THE INSURED NAMED IN THE POLICY AGAINST LIABILITY RESULTING FROM THE MAINTENANCE OR USE BY PERSONS IN THE INSURED'S EMPLOY OR ON THE INSURED'S BEHALF OF MOTOR VEHICLES NOT OWNED BY THE INSURED.

What three things does MCA 33-18-224(1)(a) forbid a motor vehicle insurer, its producers and its adjusters, to do about automobile BODY repair?

1. Requiring a claimant to use a particular repair business, refusing to pay for work done elsewhere, and inspecting the vehicle before the repair is authorized, the third being forbidden because an inspection delays the repair and pressures the claimant to accept a referral.
2. Requiring a particular repair business, providing the claimant with a list of businesses, and referring to a warranty issued by a repair business, the last two being treated by the section as inducements to use the businesses the insurer has itself selected for the work.
3. Requiring that a claimant use a particular business or location for an estimate or a repair; any act or practice that intimidates, coerces or threatens a claimant or that provides an incentive or inducement to use a particular one; and unilaterally disregarding a repair operation or cost identified by an agreed estimating system. ✓
4. Requiring a particular repair business for the repair, requiring a particular business for the estimate, and requiring the claimant to obtain more than one estimate, the section leaving the insurer free to disregard any repair operation its own estimating system omits.

Why: MCA 33-18-224(1)(a): an insurance company, INCLUDING ITS PRODUCERS AND ADJUSTERS, that issues or renews a motor vehicle policy in this State may not (i) REQUIRE THAT A CLAIMANT UNDER THE POLICY USE A PARTICULAR AUTOMOBILE BODY REPAIR BUSINESS OR LOCATION FOR AN ESTIMATE OR A REPAIR; (ii) ENGAGE IN ANY ACT OR PRACTICE THAT INTIMIDATES, COERCES, OR THREATENS A CLAIMANT OR THAT PROVIDES AN INCENTIVE OR INDUCEMENT FOR A CLAIMANT TO USE A PARTICULAR one; or (iii) UNILATERALLY DISREGARD A REPAIR OPERATION OR COST IDENTIFIED BY AN ESTIMATING SYSTEM THAT THE INSURER AND THE BUSINESS HAVE AGREED TO UTILIZE. Paragraph (1)(b) preserves the insurer's ACCESS TO THE VEHICLE FOR A COMPETITIVE ESTIMATE, and subsection (3) provides that PROVIDING THE LIST and REFERRING TO A WARRANTY are NOT incentives or inducements.

A Montana producer lets a policyholder pay a premium 25 days after the due date, with nothing signed. What interest may the producer charge under MCA 33-18-213?

1. Interest at not more than one and one-half per cent a month on the unpaid balance, that being the rate the section fixes for credit extended to a policyholder in connection with the issuance or servicing of a policy the producer has procured or negotiated for that person.
2. None. Where credit is extended for not more than 30 days from the date the premium is due and the credit is not evidenced by a written instrument, no interest may be charged - the section opening by permitting a producer as defined in 33-17-102 to extend credit to a policyholder at all. ✓
3. Interest at the legal rate authorized in 31-1-107, which is the rate that applies wherever the parties have not reduced their arrangement to a signed written instrument stating the rate they have agreed upon for the credit the producer is extending to the policyholder.
4. Whatever rate the producer and the policyholder have agreed, the section imposing a ceiling only where the arrangement is in writing, an oral arrangement being left to the general law of contract and to the usury provisions of Title 31 rather than to the insurance code.

Why: MCA 33-18-213 permits AN INSURANCE PRODUCER, as defined in 33-17-102, TO EXTEND CREDIT TO A POLICYHOLDER in connection with the issuance or servicing of any policy procured or negotiated by the producer, on one of three conditions. Subsection (1): IF CREDIT IS EXTENDED FOR NOT MORE THAN 30 DAYS FROM THE DATE THE PREMIUM IS DUE AND THE CREDIT IS NOT EVIDENCED BY A WRITTEN INSTRUMENT, NO INTEREST MAY BE CHARGED. Twenty-five days with nothing signed falls squarely inside it.

For which violations of MCA 33-18-201 does 33-18-242 give an independent cause of action, and what need the plaintiff NOT prove?

1. For a violation of any of the fifteen paragraphs of 33-18-201, the section giving a private remedy co-extensive with the regulatory prohibition; but the plaintiff must still prove the frequency which the opening words of 33-18-201 require before any violations are made out.
2. For a violation of 33-18-201 (1), (4), (5), (6), (9) or (13), and the plaintiff need prove neither frequency nor actual damage, the section providing for an award of statutory damages in a fixed amount together with exemplary damages assessed under 27-1-221 of the code.
3. For a violation of 33-18-201 (1), (4), (5), (6), (9) or (13) - and only those six. The plaintiff is not required to prove that the violations were of such frequency as to indicate a general business practice. ✓
4. For a violation of 33-18-232, the prompt payment section, as well as of the six paragraphs of 33-18-201 that the section names, compliance or noncompliance with the payment deadlines being admissible in the private action as evidence of the insurer's course of conduct.

Why: MCA 33-18-242(1): AN INSURED OR A THIRD-PARTY CLAIMANT HAS AN INDEPENDENT CAUSE OF ACTION AGAINST AN INSURER FOR ACTUAL DAMAGES CAUSED BY THE INSURER'S VIOLATION OF 33-18-201 (1), (4), (5), (6), (9), OR (13). Subsection (2): IN AN ACTION UNDER THIS SECTION, A PLAINTIFF IS NOT REQUIRED TO PROVE THAT THE VIOLATIONS WERE OF SUCH FREQUENCY AS TO INDICATE A GENERAL BUSINESS PRACTICE. The damages are ACTUAL damages under subsection (5), with EXEMPLARY DAMAGES assessable IN ACCORDANCE WITH 27-1-221; and 33-18-232(3) keeps the prompt-payment section out of the action altogether.

Part Two (Employers Liability) of the policy is primarily designed to cover which of the following?

1. Statutory benefits owed to the injured worker directly under the state workers compensation act
2. Fines and penalties assessed against the employer by the state for workplace safety violations
3. Suits brought against the employer for work injuries that fall outside the WC statute ✓
4. Damage to the employer's own buildings and equipment

Why: Part Two covers the employer's liability for damages because of bodily injury by accident or disease arising out of employment that is not compensable as statutory benefits under Part One, such as certain lawsuits.

Before workers' compensation laws, employers defending common-law negligence suits could use several defenses. Which of the following was one of those defenses that WC laws effectively removed?

1. The collateral source rule
2. The fellow-servant rule ✓
3. The statutory employer rule
4. The exclusive remedy rule

Why: The common-law defenses WC removed were contributory negligence, assumption of risk, and the fellow-servant rule (injury caused by a coworker). WC made these defenses irrelevant to benefit eligibility.

How does MCA 33-1-201 distinguish a DOMESTIC, a FOREIGN and an ALIEN insurer?

1. Domestic is incorporated under the laws of this state; alien is formed under the laws of a country other than the United States; foreign is formed under the laws of any jurisdiction other than this state and includes an alien insurer. ✓
2. Domestic is incorporated under the laws of this state; foreign is formed under the laws of another state of the United States; and alien is formed under the laws of another country - the three classes being mutually exclusive under the code as enacted in this State.
3. Domestic is an insurer whose principal place of business is in this state whatever its state of incorporation; foreign is one whose principal place of business is elsewhere in the United States; and alien is one whose principal place of business is outside it.
4. Domestic is any insurer holding a certificate of authority from the commissioner; foreign is one authorised in another state but not here; and alien is one authorised in a country other than the United States, the classes turning on authorisation.

Why: MCA 33-1-201: (3) DOMESTIC INSURER is an insurer INCORPORATED UNDER THE LAWS OF THIS STATE. (1) ALIEN INSURER is an insurer FORMED UNDER THE LAWS OF ANY COUNTRY OTHER THAN THE UNITED STATES or its states, districts, territories and commonwealths. (5) FOREIGN INSURER is an insurer FORMED UNDER THE LAWS OF ANY JURISDICTION OTHER THAN THIS STATE - and EXCEPT WHEN DISTINGUISHED BY CONTEXT, THE TERM INCLUDES AN ALIEN INSURER. Foreign and alien are not mutually exclusive.

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.

What must a Montana premium finance agreement contain and how must it be printed?

1. It must be signed by the insured and by the insurer, be printed in at least 10-point type, and state the annual percentage rate and the total of payments in the form the federal Truth in Lending Act prescribes, no other content being required by the Montana chapter.
2. It must be dated and signed by the insured, with the printed portion in at least 8-point type; name the producer, the insured and the finance company and describe the policies; and set forth the total premiums, downpayment, principal, finance charge, balance and terms. ✓
3. It must be dated and signed and describe the policies financed; the financial particulars may be given orally or in a separate schedule, and the type size is a matter for the company, the chapter being concerned with the substance of the bargain rather than its presentation.
4. It must be dated and signed by the insured, be in at least 8-point type, and set out the figures the chapter lists in exactly the order in which they appear in it, no additional item being permitted to be inserted in the agreement between the parties to it.

Why: MCA 33-14-301(1): a premium finance agreement must (a) BE DATED AND SIGNED BY THE INSURED OR BY ANY PERSON AUTHORIZED IN WRITING TO ACT IN BEHALF OF THE INSURED, AND THE PRINTED PORTION OF THE AGREEMENT MUST BE IN AT LEAST 8-POINT TYPE; (b) CONTAIN THE NAME AND PLACE OF BUSINESS OF THE INSURANCE PRODUCER NEGOTIATING THE RELATED POLICY, THE NAME AND RESIDENCE OR PLACE OF BUSINESS OF THE INSURED, THE NAME AND PLACE OF BUSINESS OF THE PREMIUM FINANCE COMPANY TO WHICH PAYMENTS ARE TO BE MADE, AND A DESCRIPTION OF THE INSURANCE POLICIES INVOLVED AND THE AMOUNT OF THE PREMIUM; and (c) SET FORTH when applicable THE TOTAL AMOUNT OF THE PREMIUMS, THE AMOUNT OF THE DOWNPAYMENT, THE PRINCIPAL BALANCE, THE AMOUNT OF THE FINANCE CHARGE, THE BALANCE PAYABLE BY THE INSURED, AND THE NUMBER OF INSTALLMENTS REQUIRED, THE AMOUNT OF EACH IN DOLLARS, AND THE DUE DATE OR PERIOD. (2): THE ITEMS ARE NOT REQUIRED TO BE STATED IN THE SEQUENCE OR ORDER IN WHICH THEY APPEAR, AND ADDITIONAL ITEMS MAY BE INCLUDED. (4): the company or the producer SHALL DELIVER OR MAIL TO THE INSURED A COMPLETE COPY OF THE AGREEMENT.

Fair dealing and good faith in claims handling require an insurer and producer to:

1. Avoid all direct contact with the insured once defense counsel has been retained on the claim file
2. Pay only the largest claims in full and settle the smaller ones for a fraction of their value
3. Delay payment on every claim as long as the statute of limitations allows, to preserve reserves
4. Treat the insured honestly, investigate fairly, and not unreasonably deny valid claims ✓

Why: The duty of good faith and fair dealing requires honest, prompt, and fair treatment of insureds and reasonable handling of valid claims.

When is property an 'export' under MCA 33-1-224, and what if it is diverted?

1. It is an export only once it has been loaded aboard the vessel or aircraft which will carry it abroad; before that it is a domestic shipment, and if it is diverted after loading it remains an export until it is unloaded at a place within the United States.
2. It is an export from the moment the contract of sale to a foreign buyer is made, and remains one whatever afterwards happens to it, the character of the goods being fixed by the contract rather than by their physical movement or their destination in the end.
3. It is an export when designated for export, but coverage is restricted to 180 days from that designation; a diversion for domestic trade ends the cover altogether rather than bringing the domestic shipment provisions into operation in its place.
4. It is an export when designated or while being prepared for export and remains one unless diverted for domestic trade; if it is in fact so diverted, the provisions of 33-1-225 apply. Exports are covered wherever located, without restriction as to time. ✓

Why: MCA 33-1-224(2): PROPERTY IS AN EXPORT AND THE PROPER SUBJECT OF MARINE, INLAND MARINE, OR TRANSPORTATION INSURANCE WHEN DESIGNATED OR WHILE BEING PREPARED FOR EXPORT AND REMAINS AN EXPORT UNLESS DIVERTED FOR DOMESTIC TRADE. IF THE PROPERTY IS DIVERTED FOR DOMESTIC TRADE, THE PROVISIONS OF 33-1-225 APPLY. THIS SECTION DOES NOT APPLY TO LONG-ESTABLISHED METHODS OF INSURING CERTAIN COMMODITIES SUCH AS COTTON. (1): EXPORTS ARE COVERED WHEREVER THEY ARE LOCATED, WITHOUT RESTRICTION AS TO TIME, PROVIDED THE COVERAGE OF THE ISSUING COMPANIES INCLUDES HAZARDS OF TRANSPORTATION.

An insurance carrier wants to cancel a Montana policy it has certified as proof of financial responsibility. What does MCA 61-6-135 require?

1. The insurance so certified shall not be canceled or terminated until at least 45 days after a notice of cancellation is mailed to the named insured and filed with the department, and a policy subsequently procured and certified does not terminate the insurance previously certified until that forty-five day period has expired in respect of the earlier policy.
2. The insurance so certified may be canceled on the same notice as any other motor vehicle policy under Title 33, chapter 23, the certification affecting only the department's record of the insured's compliance, and the insured must then file a fresh certificate within ten days of the cancellation taking effect or the license is suspended.
3. The insurance so certified shall not be canceled or terminated until at least 10 days after a notice of cancellation or termination is filed in the office of the department, except that a policy subsequently procured and certified shall, on the effective date of its certification, terminate the insurance previously certified with respect to any motor vehicle designated in both certificates. ✓
4. The insurance so certified shall not be canceled until at least 10 days after notice is filed with the department, and a policy subsequently procured and certified does not affect the policy previously certified, both certificates remaining in force so that two insurers are on risk for any vehicle designated in both of them.

Why: MCA 61-6-135: WHEN AN INSURANCE CARRIER HAS CERTIFIED A MOTOR VEHICLE LIABILITY POLICY UNDER 61-6-133 OR A POLICY UNDER 61-6-134, THE INSURANCE SO CERTIFIED SHALL NOT BE CANCELED OR TERMINATED UNTIL AT LEAST 10 DAYS AFTER A NOTICE OF CANCELLATION OR TERMINATION OF THE INSURANCE SO CERTIFIED SHALL BE FILED IN THE OFFICE OF THE DEPARTMENT, EXCEPT THAT SUCH A POLICY SUBSEQUENTLY PROCURED AND CERTIFIED SHALL ON THE EFFECTIVE DATE OF ITS CERTIFICATION TERMINATE THE INSURANCE PREVIOUSLY CERTIFIED WITH RESPECT TO ANY MOTOR VEHICLE DESIGNATED IN BOTH CERTIFICATES.

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.

Cyber/Network security liability insurance is designed primarily to address:

1. Fire and smoke damage to the insured's server room and its hardware, valued at replacement cost
2. Workplace injuries to employees who develop repetitive strain from long hours at their computer terminals
3. Auto liability arising when an employee drives a company car to a client's office to fix network security and causes a crash
4. Liability and expenses from data breaches, privacy violations, and network security failures ✓

Why: Cyber policies cover first- and third-party costs from data breaches, privacy claims, and network security incidents.

A Montana policy lists specific items of personal property with values on which the premium was based. How is a total loss of one item computed?

1. At the actual cash value of the item at the date of loss, subject to the stated valuation as a maximum; the listed value is a limit of liability rather than an agreed value, and depreciation is deducted in the ordinary way before the deductible is applied to the claim.
2. At the stated valuation, with no deductions or offsets except for the selected deductible in the policy, where the insurer places specific valuations upon particular items and bases the premium charge on those valuations. Motor vehicle insurance policies are excepted. ✓
3. At the stated valuation less depreciation and less the deductible, unless the policy is endorsed to provide agreed value cover, in which case the stated valuation is paid in full and no deductible applies to the settlement of a total loss of a listed item.
4. At the stated valuation with no deductions of any kind, including the policy deductible, the section applying to every policy insuring listed items of personal property, motor vehicle policies included, so that a scheduled vehicle is settled at its listed value.

Why: MCA 33-24-103(1): THIS SECTION APPLIES TO POLICIES, EXCEPT MOTOR VEHICLE INSURANCE POLICIES, THAT INSURE SPECIFIC LISTED ITEMS OF PERSONAL PROPERTY AGAINST ANY LOSS OR DAMAGE. (2): IF THE INSURER PLACES SPECIFIC VALUATIONS UPON PARTICULAR ITEMS OF COVERED PROPERTY AND BASES THE PREMIUM CHARGE ON THESE VALUATIONS, THEN THE INSURER SHALL COMPUTE ANY TOTAL LOSS OR TOTAL DAMAGE TO THE PROPERTY, WHEN COVERED, AT THE STATED VALUATION WITH NO DEDUCTIONS OR OFFSETS EXCEPT FOR THE SELECTED DEDUCTIBLE IN THE POLICY. Both conditions - the specific valuation AND the premium based on it - must hold.

Who must submit a Montana form filing, and what must accompany it under MCA 33-1-501(1)(b)?

1. It may be submitted by any person the insurer authorizes, including the rating organization of which it is a member, and must be accompanied by an actuarial memorandum showing that the rates to be charged for the coverage the form provides are not excessive or inadequate.
2. It must be submitted by an officer of the insurer with a certification in a form prescribed by the commissioner, stating that to the best of the officer's knowledge and belief the form complies with the applicable provisions of Title 33. ✓
3. It must be submitted by the insurer's appointed attorney in this State together with an opinion that the form complies with Montana law, the opinion being addressed to the commissioner and the attorney being answerable to the commissioner for its accuracy.
4. It must be submitted by an officer of the insurer together with a copy of the approval given to the same form by the insurance supervisory official of the insurer's state of domicile, no Montana filing being accepted until the domiciliary approval has first been obtained.

Why: MCA 33-1-501(1)(b): A FILING REQUIRED BY SUBSECTION (1)(a) MUST BE SUBMITTED BY AN OFFICER OF THE INSURER WITH A CERTIFICATION IN A FORM PRESCRIBED BY THE COMMISSIONER. THE CERTIFICATION MUST STATE THAT TO THE BEST OF THE OFFICER'S KNOWLEDGE AND BELIEF, THE POLICY, CONTRACT FORM, CERTIFICATE, ENROLLMENT FORM, APPLICATION FORM, PRINTED RIDER OR ENDORSEMENT FORM, OR FORM OF RENEWAL CERTIFICATE COMPLIES WITH THE APPLICABLE PROVISIONS OF TITLE 33.

What is the first duty MCA 33-1-1205 lays on Montana insurers and independent licensees?

1. Each insurer shall establish a special investigation unit staffed by persons trained in the detection of insurance fraud, and shall file with the commissioner an annual report of the matters that unit has investigated during the preceding calendar year in this State.
2. Each insurer shall include in every policy and every application a statement warning the applicant that insurance fraud is a crime, in the form the commissioner prescribes by rule, and shall obtain the applicant's signature beneath that warning before binding the risk.
3. Each insurer shall cooperate with the commissioner, but an independent adjuster, administrator, consultant or producer owes the duty to the insurer for which it acts rather than to the commissioner, and answers to the commissioner only through that insurer.
4. Each insurer, independent adjuster, independent administrator, independent consultant, and independent producer shall cooperate fully with the commissioner with respect to the provisions of this part. ✓

Why: MCA 33-1-1205(1): EACH INSURER, INDEPENDENT ADJUSTER, INDEPENDENT ADMINISTRATOR, INDEPENDENT CONSULTANT, AND INDEPENDENT PRODUCER SHALL COOPERATE FULLY WITH THE COMMISSIONER WITH RESPECT TO THE PROVISIONS OF THIS PART. The duty runs to the commissioner directly, and it binds the independent licensees as well as the insurer.

A Montana producer takes premium money knowing the insurer will not put the coverage on risk. Which limb of MCA 33-1-1202 is that, and what else sits beside it?

1. Subsection (4), which also requires that the producer have converted the premium to the producer's own use; merely accepting money for coverage which is not placed is a breach of the fiduciary duty in 33-17-1102 rather than an act of insurance fraud under this part.
2. Subsection (1), because the premium is taken for the purpose of obtaining money; the section contains no separate provision about premiums, the taking of a premium for coverage that will not exist being treated as the presentation of a misleading statement to the insured.
3. Subsection (7), counterfeit insurance documents, on the footing that a producer who takes premium money knowing that coverage will not be provided must necessarily give the insured some document evidencing a policy which the insurer has not in fact issued to that person.
4. Subsection (4): accepting premium money knowing that coverage will not be provided. Beside it sits subsection (3), presenting or causing to be presented to or by an insurer, purported insurer, producer or administrator a materially false or altered application of insurance. ✓

Why: MCA 33-1-1202(4): ACCEPTS PREMIUM MONEY KNOWING THAT COVERAGE WILL NOT BE PROVIDED. (3): PRESENTS OR CAUSES TO BE PRESENTED TO OR BY AN INSURER, PURPORTED INSURER, PRODUCER, OR ADMINISTRATOR, AS DEFINED IN 33-17-102, A MATERIALLY FALSE OR ALTERED APPLICATION OF INSURANCE. Note the words TO OR BY - the section reaches an application put forward BY a producer as well as one presented TO an insurer.

What confidentiality does MCA 33-1-311(5) impose, and what sharing does it allow?

1. The commissioner must keep confidential everything received from any source in the course of an examination, and may share none of it with any other agency, the subsection admitting no exception for law enforcement or for other insurance departments.
2. The commissioner shall maintain as confidential information received from the NAIC, or from another agency, federal agency or foreign government that treats it as confidential; and may share it if the recipient agrees to maintain confidentiality. ✓
3. The commissioner must keep confidential only information received from the National Association of Insurance Commissioners, information from other state and federal agencies being public records available on request under Montana's public records law.
4. The commissioner may treat information as confidential at the commissioner's discretion, the subsection conferring a power rather than imposing a duty, and may share it freely with any agency that asks for it in the course of its own work.

Why: MCA 33-1-311(5): the commissioner SHALL MAINTAIN AS CONFIDENTIAL any information or document received from (a) THE NATIONAL ASSOCIATION OF INSURANCE COMMISSIONERS; or (b) ANOTHER STATE AGENCY, AN INSURANCE DEPARTMENT FROM ANOTHER STATE, A FEDERAL AGENCY, THE INTERSTATE INSURANCE PRODUCT REGULATION COMMISSION, OR A FOREIGN GOVERNMENT THAT TREATS THE SAME INFORMATION AS CONFIDENTIAL. The commissioner MAY PROVIDE information, including confidential information, to those bodies and to A STATE OR FEDERAL LAW ENFORCEMENT AGENCY IF THE RECIPIENT AGREES TO MAINTAIN THE CONFIDENTIALITY. (6) adds that THE DEPARTMENT IS A CRIMINAL JUSTICE AGENCY as defined in 44-5-103.

Under the Homeowners definition, an 'insured' typically includes:

1. The named insured, resident relatives, and other persons under 21 in their care ✓
2. The insurer's agent, whose acts in servicing the policy are treated as acts of the named insured
3. Only the person shown on the declarations page, with relatives added by written endorsement
4. Any visitor to the home, for as long as that person remains on the residence premises

Why: Insured generally includes the named insured, resident relatives, and others under 21 in the care of an insured, plus students away under certain conditions.

What effect does an insurer's notice of suspected fraud have on the time limits that would otherwise bind it, under MCA 33-1-1205(3)?

1. It has no effect on any time limit; the insurer must still pay or deny the claim within the periods 33-18-232 allows, the suspicion of fraud being relevant only to whether the insurer has a reasonable basis in law or in fact for contesting the claim it has received.
2. Notice to the commissioner tolls, for the commissioner, any applicable time period in any insurance statute or related regulation or in Title 33, chapter 1, part 15 - and tolls any time period arising under 33-18-232 or 33-18-242 regarding unfair claims settlement practices. ✓
3. It suspends the running of every limitation period in the code, including the period within which the insured may sue on the policy, until the commissioner has notified the insurer of the disposition of the notice and of any investigation which resulted from it.
4. It tolls the periods in 33-18-232 and 33-18-242 for the insurer, so that the insurer need not pay or deny the claim while the commissioner investigates; the tolling operates in the insurer's favour rather than in the commissioner's, and lasts until the file is closed.

Why: MCA 33-1-1205(3): NOTICE TO THE COMMISSIONER BY AN INSURER WHO HAS REASON TO BELIEVE THAT AN INSURANCE FRAUD HAS BEEN COMMITTED IN CONNECTION WITH AN INSURANCE CLAIM, APPLICATION, OR POLICY TOLLS ANY APPLICABLE TIME PERIOD, FOR THE COMMISSIONER, IN ANY APPLICABLE INSURANCE STATUTE OR RELATED INSURANCE REGULATION, OR ANY APPLICABLE PROVISIONS OF TITLE 33, CHAPTER 1, PART 15, AND TOLLS ANY TIME PERIOD ARISING UNDER 33-18-232 OR 33-18-242 REGARDING UNFAIR CLAIMS SETTLEMENT PRACTICES. The words FOR THE COMMISSIONER are the ones that matter: the tolling is for the commissioner's benefit.

A company refuses to give examiners access to its records. What does MCA 33-1-408(2) provide?

1. Refusal to submit to examination or to comply with a reasonable written request is grounds for suspension, refusal, or nonrenewal of any license or authority the company holds, in a proceeding conducted under 33-1-318 and 33-1-701. ✓
2. The commissioner may apply to the district court for an order of specific performance, refusal being a civil matter between the department and the company rather than a ground on which any licence or authority held by it may be affected.
3. The examiners may obtain a search warrant from a justice of the peace and seize the records, the subsection giving the department a power of entry where access is refused by a company subject to examination under this part.
4. The company commits a misdemeanour punishable by a fine of not more than $1,000 for each day of refusal, the subsection providing a criminal rather than an administrative consequence for obstructing an examination in this State.

Why: MCA 33-1-408(2): every company or person from whom information is sought, and its officers, directors, employees and agents, SHALL PROVIDE TIMELY, CONVENIENT, AND FREE ACCESS AT ALL REASONABLE HOURS to all books, records, accounts, papers, documents and computer recordings, and SHALL FACILITATE THE EXAMINATION AND AID IN IT so far as in their power. THE REFUSAL of any company, by its officers, directors, employees or agents, TO SUBMIT TO EXAMINATION OR TO COMPLY WITH ANY REASONABLE WRITTEN REQUEST OF THE EXAMINERS IS GROUNDS FOR SUSPENSION, REFUSAL, OR NONRENEWAL OF ANY LICENSE OR AUTHORITY held by the company, in a proceeding under 33-1-318 AND 33-1-701.

What does an operator's policy of liability insurance cover under MCA 61-6-103(2)?

1. It must insure the person named as insured against loss from liability arising out of the use of any motor vehicle, whether or not owned by the operator, and at limits of not less than one half of those set out in subsection (1), the lower limits being permitted because the owner of the vehicle is separately required to insure it under 61-6-301.
2. It must insure the person named as insured and any other person using the vehicle with the express or implied permission of the named insured, against loss from the liability imposed by law for damages arising out of the ownership, maintenance or use of any motor vehicle owned by the operator, within the territorial limits of the state of Montana.
3. It must insure the person named as insured against loss from the liability imposed upon the operator by law for damages arising out of the use by the operator of any motor vehicle not owned by the operator, within the same territorial limits and subject to the same limits of liability set forth in subsection (1). ✓
4. It must insure the owner of the vehicle against loss from the liability imposed by law upon any person who operates the vehicle with the owner's permission, an operator's policy being a permissive user endorsement to the owner's policy rather than a separate contract with the person who drives a vehicle which that person does not own.

Why: MCA 61-6-103(2): AN OPERATOR'S POLICY OF LIABILITY INSURANCE MUST INSURE THE PERSON NAMED AS INSURED IN THE POLICY AGAINST LOSS FROM THE LIABILITY IMPOSED UPON THE OPERATOR BY LAW FOR DAMAGES ARISING OUT OF THE USE BY THE OPERATOR OF ANY MOTOR VEHICLE NOT OWNED BY THE OPERATOR, WITHIN THE SAME TERRITORIAL LIMITS AND SUBJECT TO THE SAME LIMITS OF LIABILITY THAT ARE SET FORTH IN SUBSECTION (1) WITH RESPECT TO THE OPERATOR'S POLICY OF LIABILITY INSURANCE. NOT OWNED BY THE OPERATOR is the mark of an operator's policy.

In a Homeowners policy, damage by a vehicle to the dwelling is:

1. Covered only under the auto liability policy of the driver who struck the house, since the homeowners form defers to it
2. Covered as a named peril (vehicles), with limited coverage for the insured's own vehicle to fences/driveways ✓
3. Always excluded because vehicle impact is treated as a highway hazard rather than a property peril under the form
4. Covered under Coverage F medical payments, which pays for repair of the dwelling struck by a vehicle up to the Coverage A limit

Why: Damage caused by vehicles is a named peril; however, there are limitations for vehicles owned or operated by a resident and for damage to certain property like driveways.

What counts as an 'adverse action' under MCA 33-18-604(1)?

1. Denial, nonrenewal or cancellation of coverage, and any increase in the premium charged, the definition being confined to decisions that cost the consumer money or coverage and not reaching a discount which the insurer has simply not applied to the consumer's policy.
2. Denial, nonrenewal or cancellation of coverage; an increase in any charge for coverage; failure to give an otherwise available credit-related discount; or a reduction or any other adverse or unfavorable change in the terms or the amount of coverage. ✓
3. Any decision by an insurer that is less favourable to the consumer than the decision the consumer sought, including a refusal to write the coverage through the producer the consumer approached and a refusal to backdate the policy to the date of the application.
4. Denial or cancellation of coverage only. A nonrenewal is dealt with under the cancellation and nonrenewal provisions of chapter 15 rather than under this part, and an increase in a charge is a rating matter governed by the filed rates the insurer uses for the line.

Why: MCA 33-18-604(1): ADVERSE ACTION means, in regard to the TERMS OR AMOUNT OF COVERAGE of any insurance, existing or applied for, IN CONNECTION WITH THE UNDERWRITING OF PERSONAL INSURANCE, (a) DENIAL, NONRENEWAL, OR CANCELLATION OF COVERAGE; (b) AN INCREASE IN ANY CHARGE FOR COVERAGE; (c) FAILURE TO GIVE AN OTHERWISE AVAILABLE CREDIT-RELATED DISCOUNT; or (d) A REDUCTION OR ANY OTHER ADVERSE OR UNFAVORABLE CHANGE IN THE TERMS OF COVERAGE OR THE AMOUNT OF COVERAGE. Paragraph (c) is the one most often missed.

What may the commissioner do if an approved continuing education activity is not being operated properly, under MCA 33-17-1204?

1. Refer the matter to the attorney general, the commissioner's own powers being confined to the initial approval of a course and the department having no continuing supervisory jurisdiction over a provider once approval has been granted to it in this State under this part as enacted.
2. Revoke approval, place the activity under probationary approval, or issue a cease and desist order under 33-1-318 - and in conducting the periodic review the commissioner may exercise any investigative power provided for in 33-1-311 or 33-1-315. ✓
3. Withdraw approval only, the probationary and cease and desist remedies being available against licensees rather than against course providers, who are not licensed by the commissioner and are therefore outside the enforcement provisions of this chapter of the code here.
4. Impose a civil penalty of up to $50,000 on the provider and require it to refund the fees paid by licensees who attended the activity, the section providing a monetary remedy rather than any power to revoke or restrict the approval previously given in this State under this part.

Why: MCA 33-17-1204: (3) in conducting PERIODIC REVIEW of course content, instructors, material, instructional format or a sponsoring organization, THE COMMISSIONER MAY EXERCISE ANY INVESTIGATIVE POWER OF THE COMMISSIONER PROVIDED FOR IN 33-1-311 OR 33-1-315. (4) IF AFTER REVIEW OR INVESTIGATION THE COMMISSIONER DETERMINES AN APPROVED ACTIVITY IS NOT BEING OPERATED IN COMPLIANCE WITH THE STANDARDS, THE COMMISSIONER MAY REVOKE APPROVAL, PLACE THE ACTIVITY UNDER PROBATIONARY APPROVAL, OR ISSUE A CEASE AND DESIST ORDER UNDER 33-1-318. (2) allows the commissioner to CONTRACT with a person to review and recommend courses.

What is marine protection and indemnity insurance under MCA 33-1-209(2)?

1. Insurance against liability of the insured for loss, damage, or expense incident to ownership, operation, charter, maintenance, use, repair, or construction of any vessel, craft, or instrumentality for use in ocean or inland waterways. It includes insurance against the liability of the insured for personal injury, illness, death, or loss or damage of the property of another person. ✓
2. Insurance against loss of or damage to any vessel, craft or instrumentality for use in ocean or inland waterways, and against the loss of the freight and disbursements pertaining to it, liability of the insured to another person being written not here but under the liability paragraph of the casualty definitions in 33-1-206 of the code.
3. Insurance against liability of the insured for loss, damage or expense incident to the ownership, operation or charter of a vessel used in ocean waterways only, a craft used on the inland waterways of this state being insured under the inland marine provisions of 33-1-221 through 33-1-229 rather than under the marine provisions.
4. Insurance indemnifying the owner of a vessel against liability to the crew of that vessel for personal injury, illness or death, liability for loss or damage to the property of another person and liability incident to repair or construction being outside the term and written instead under a shipbuilders' risk or ship repairers' liability form.

Why: MCA 33-1-209(2): MARINE PROTECTION AND INDEMNITY INSURANCE MEANS INSURANCE AGAINST LIABILITY OF THE INSURED FOR LOSS, DAMAGE, OR EXPENSE INCIDENT TO OWNERSHIP, OPERATION, CHARTER, MAINTENANCE, USE, REPAIR, OR CONSTRUCTION OF ANY VESSEL, CRAFT, OR INSTRUMENTALITY FOR USE IN OCEAN OR INLAND WATERWAYS. THE TERM INCLUDES INSURANCE AGAINST THE LIABILITY OF THE INSURED FOR PERSONAL INJURY, ILLNESS, DEATH, OR LOSS OR DAMAGE OF THE PROPERTY OF ANOTHER PERSON. It is a LIABILITY definition; 33-1-209(1) is the property one.

When may an insurance producer act as a viatical settlement broker without a separate licence, under MCA 33-20-1303(2)(b)?

1. Where the producer holds any line of authority and gives notice to the commissioner within 90 days of first acting as a viatical settlement broker, no minimum period of prior licensure being required and no fee being payable for the notification made under this part of the code as enacted in this State.
2. Where the producer has been licensed for at least 5 years with a life line of authority and has completed the viatical settlement broker training, the examination alone being waived and the producer remaining required to obtain a separate broker licence from the commissioner before acting for any viator.
3. Where the producer is licensed with a life insurance line of authority here or in the home state and has been licensed for at least 1 year - notifying the commissioner not later than 30 days from the first day of so operating, paying the fee, and acknowledging that the producer will operate in accordance with the part. ✓
4. In no circumstances - an insurance producer wishing to broker viatical settlements must obtain a viatical settlement broker licence in the ordinary way, the part making no concession to a person already licensed in the life insurance business of this State under chapter 17 of this title as enacted.

Why: MCA 33-20-1303(2)(b): A RESIDENT OR NONRESIDENT INSURANCE PRODUCER MUST BE CONSIDERED TO MEET THE LICENSING REQUIREMENTS OF A VIATICAL SETTLEMENT BROKER AND MUST BE PERMITTED TO OPERATE AS ONE IF THE PRODUCER IS LICENSED WITH A LIFE INSURANCE LINE OF AUTHORITY IN THIS STATE OR IN THE PRODUCER'S HOME STATE AND HAS BEEN LICENSED FOR AT LEAST 1 YEAR. (i) NOT LATER THAN 30 DAYS FROM THE FIRST DAY OF OPERATING as a viatical settlement broker the producer SHALL NOTIFY THE COMMISSIONER on a prescribed form AND PAY A FEE under 33-2-708(1)(b)(viii), the notification including AN ACKNOWLEDGMENT that the producer will operate in accordance with the part.

How do MCA 33-18-604 (6), (7) and (8) distinguish credit information, a credit report and an insurance score?

1. Credit information is anything appearing in a credit report; a credit report is any document obtained from a consumer reporting agency; and an insurance score is the numerical output of a model filed with the commissioner, whatever information that model happens to use.
2. Credit information and a credit report are the same thing under the part, the two terms being used interchangeably, and an insurance score is any rating factor which an insurer derives from them and applies to a personal insurance policy it writes or renews in this State.
3. Credit information is credit-related information from or on a credit report - what is not credit-related is not credit information. A credit report comes from a consumer reporting agency. An insurance score is a number from a model predicting future loss exposure. ✓
4. Credit information is information supplied by the consumer on the application; a credit report is information supplied by a consumer reporting agency; and an insurance score is a score calculated by a consumer reporting agency rather than by the insurer itself.

Why: MCA 33-18-604(6): CREDIT INFORMATION means ANY CREDIT-RELATED INFORMATION DERIVED FROM A CREDIT REPORT, FOUND ON A CREDIT REPORT ITSELF, OR PROVIDED ON AN APPLICATION FOR PERSONAL INSURANCE; INFORMATION THAT IS NOT CREDIT-RELATED MAY NOT BE CONSIDERED CREDIT INFORMATION REGARDLESS OF WHETHER IT IS CONTAINED IN A CREDIT REPORT OR IN AN APPLICATION OR IS USED TO CALCULATE AN INSURANCE SCORE. (7): CREDIT REPORT means any written, oral or other COMMUNICATION OF INFORMATION BY A CONSUMER REPORTING AGENCY BEARING ON A CONSUMER'S CREDITWORTHINESS, CREDIT STANDING, OR CREDIT CAPACITY used or expected to be used as a factor to determine PERSONAL INSURANCE PREMIUMS, ELIGIBILITY FOR COVERAGE, OR TIER PLACEMENT. (8): INSURANCE SCORE means A NUMBER OR RATING DERIVED FROM AN ALGORITHM, COMPUTER APPLICATION, MODEL, OR OTHER PROCESS BASED IN WHOLE OR IN PART ON CREDIT INFORMATION FOR THE PURPOSES OF PREDICTING THE FUTURE INSURANCE LOSS EXPOSURE of an applicant or insured.

An insured intentionally damages a third party's property. Under a standard liability policy, this loss is most likely:

1. Covered, since an occurrence includes any damage
2. Covered as a supplementary payment, since defense costs apply regardless of intent
3. Excluded because intentional/expected acts are not accidental ✓
4. Covered once the insurer takes salvage

Why: Liability coverage applies to occurrences (accidents); intentional acts are typically excluded because they are not accidental.

Who are the 'authorized agencies' with which the commissioner must cooperate under MCA 33-1-1204(1)?

1. The attorney general, the county attorney of the county in which the fraud occurred, and the department of justice, the section being confined to Montana authorities because the commissioner has no power to share confidential criminal justice information across a border.
2. The Attorney General of Montana; the prosecuting attorney responsible for prosecution; the department of insurance of other jurisdictions; the United States attorney's office when charged with the fraud; and the federal bureau of investigation or another federal agency. ✓
3. Any law enforcement agency of this or another state, any insurer which has reported the fraud, and the national association of insurance commissioners, all of which are treated by the section as partners in the detection of insurance fraud wherever it is committed.
4. The attorney general and the federal bureau of investigation only, the remaining bodies listed in the section being those with which the commissioner may cooperate under subsection (2) to the extent allowed by law rather than those with which cooperation is mandatory.

Why: MCA 33-1-1204(1): THE COMMISSIONER SHALL COOPERATE WITH LAW ENFORCEMENT AUTHORITIES AND ALL OTHER AUTHORIZED AGENCIES AND RELATED INSURANCE AND PROFESSIONAL LICENSING BOARDS OF THIS AND OTHER STATES. AUTHORIZED AGENCIES means (a) THE ATTORNEY GENERAL OF THE STATE OF MONTANA; (b) THE PROSECUTING ATTORNEY RESPONSIBLE FOR PROSECUTION; (c) THE DEPARTMENT OF INSURANCE OF OTHER JURISDICTIONS; (d) THE UNITED STATES ATTORNEY'S OFFICE WHEN THAT OFFICE IS CHARGED WITH INVESTIGATION OF THE FRAUD; or (e) THE FEDERAL BUREAU OF INVESTIGATION OR ANY OTHER FEDERAL AGENCY CHARGED WITH INVESTIGATION OF THE FRAUD.

An employer with worse-than-average claims experience for its class would most likely have an experience modification factor that is:

1. Equal to 1.00, with no change
2. Set to zero
3. Below 1.00, producing a credit
4. Above 1.00, producing a debit ✓

Why: A debit mod above 1.00 reflects worse-than-average loss experience and increases the employer's premium relative to the class average.

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

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

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

A suspected fraud concerns a claim made on a policy issued by the Montana state compensation insurance fund. Where does the notice go?

1. To the commissioner, as in every other case, who then refers the matter to the fraud detection and prevention unit of the state fund if the commissioner considers that the unit is better placed to investigate it, the 60-day period running from the insurer's belief.
2. To the attorney general, the state fund being a state agency and a fraud committed against it being a fraud against the State, with a copy to the commissioner within 30 days so that the commissioner may consider whether a licence is also in question in the matter.
3. To the fraud detection and prevention unit established pursuant to 39-71-211 - not to the commissioner - and the notice must be made within 60 days. ✓
4. To both the commissioner and the fraud detection and prevention unit within 60 days, the duplicate notice being required because the state fund is an insurer for the purposes of the part as well as an agency answerable to the department of labour and industry.

Why: MCA 33-1-1205(4): NOTICE OF AN ALLEGED INSURANCE FRAUD INVOLVING AN INSURANCE CLAIM OR APPLICATION SUBMITTED TO THE STATE COMPENSATION INSURANCE FUND OR A POLICY ISSUED BY THE STATE COMPENSATION INSURANCE FUND MUST BE MADE WITHIN 60 DAYS TO THE FRAUD DETECTION AND PREVENTION UNIT ESTABLISHED PURSUANT TO 39-71-211. Subsection (2) opens EXCEPT AS PROVIDED IN SUBSECTION (4), so this displaces the notice to the commissioner rather than adding to it.

Under the ISO Commercial General Liability Coverage Form, which coverage part responds to bodily injury and property damage liability arising out of the insured's premises and operations?

1. Supplementary Payments
2. Coverage B
3. Coverage C
4. Coverage A ✓

Why: Coverage A insures bodily injury and property damage liability. Coverage B is personal and advertising injury; Coverage C is medical payments.

A large, financially strong corporation chooses to retain its own workers' compensation risk and pay benefits directly, with state approval. This arrangement is called:

1. Experience rating
2. Monopolistic funding
3. Assigned risk
4. Self-insurance ✓

Why: Qualified self-insurance allows financially sound employers, with state approval and security/bonding, to pay WC benefits directly rather than buying a policy.

An employer is also the manufacturer of the product that injured its own employee, and the employee sues the employer in its role as product maker rather than as employer. What doctrine does this illustrate, potentially triggering Part Two?

1. Dual-capacity doctrine ✓
2. Exclusive remedy doctrine
3. Fellow-servant doctrine
4. Going-and-coming doctrine

Why: The dual-capacity doctrine allows an employee to sue the employer in a second, distinct capacity (e.g., as product manufacturer); such suits can fall under Part Two Employers Liability.

What penalty does MCA 33-17-411 allow against a nonresident producer?

1. A fine by the commissioner of up to $50,000 for each violation; and, at the commissioner's discretion, revocation or suspension of the Montana nonresident licence for a period of up to 5 years. ✓
2. A fine of up to $5,000 for each violation, which is the ceiling the code applies to insurance producers and adjusters generally, together with revocation or suspension of the nonresident licence for such period as the commissioner considers appropriate in the circumstances of the case.
3. A fine of up to $25,000 for each violation and revocation of the licence, suspension not being available against a nonresident because the commissioner cannot supervise a licensee outside the State during a period of suspension imposed under this part of the chapter as enacted.
4. No fine at all, the commissioner's remedy against a nonresident being confined to reporting the conduct to the producer's home state regulator, which alone may impose a monetary penalty on a person licensed as a resident within its own jurisdiction under its law.

Why: MCA 33-17-411: A NONRESIDENT INSURANCE PRODUCER WHO VIOLATES A CONDITION OF THE PRODUCER'S MONTANA LICENSE OR A PROVISION OF THIS PART IS SUBJECT TO A FINE BY THE COMMISSIONER OF UP TO $50,000 FOR EACH VIOLATION AND MAY, AT THE DISCRETION OF THE COMMISSIONER, HAVE THE MONTANA NONRESIDENT LICENSE REVOKED OR SUSPENDED FOR A PERIOD OF UP TO 5 YEARS. Note how far this exceeds the $5,000 per violation ceiling 33-1-317 sets for producers generally.

Proof of automobile insurance coverage is most commonly evidenced by:

1. A bill of sale showing the dealer collected the first premium
2. An insurance ID card listing the policy number, insurer, and effective dates ✓
3. The registration card alone, since the state checks coverage at renewal
4. A driver's license endorsed by the examining officer

Why: An insurance identification card showing the insurer, policy number, vehicle, and policy period is the standard proof of coverage carried by drivers.

At what age may a minor contract for insurance in Montana, and what can the minor then do?

1. Any minor 16 years of age or older may contract for insurance on the minor's own property, but not for life or health insurance, which requires the consent of a parent or guardian; and the minor may repudiate the contract at any time before reaching the age of majority.
2. Any minor may contract for insurance with the written consent of a parent or guardian, the code fixing no minimum age; and the minor may not repudiate the contract, the consent of the parent binding the minor and the parent alike for the whole of the policy period.
3. Any minor 15 years of age or older, by the nearest birthday, may contract for annuities and insurance on the minor's own life, body, health, property or other interests, and is competent to exercise all rights as a person of full legal age. ✓
4. Any minor 15 years of age or older may contract for insurance, and is competent to exercise all rights under it; but the minor may repudiate the contract on reaching majority, and a guardian's consent is required for the first annual premium on any contract so effected.

Why: MCA 33-15-103(1): ANY PERSON OF COMPETENT LEGAL CAPACITY MAY CONTRACT FOR INSURANCE. (2): ANY MINOR 15 YEARS OF AGE OR OLDER, AS DETERMINED BY THE NEAREST BIRTHDAY, MAY CONTRACT FOR ANNUITIES AND FOR INSURANCE UPON THE MINOR'S OWN LIFE, BODY, HEALTH, PROPERTY, LIABILITIES, OR OTHER INTERESTS OR ON THE PERSON OF ANOTHER IN WHOM THE MINOR HAS AN INSURABLE INTEREST. THE MINOR MUST BE CONSIDERED COMPETENT TO EXERCISE ALL RIGHTS AND POWERS as might be exercised BY A PERSON OF FULL LEGAL AGE and MAY AT ANY TIME SURRENDER THE MINOR'S INTEREST and GIVE VALID DISCHARGE. THE MINOR MAY NOT, BY REASON OF MINORITY, BE ENTITLED TO RESCIND, AVOID, OR REPUDIATE THE CONTRACT, EXCEPT THAT THE MINOR, NOT OTHERWISE EMANCIPATED, MAY NOT BE BOUND BY ANY UNPERFORMED AGREEMENT TO PAY BY PROMISSORY NOTE OR OTHERWISE ANY PREMIUM. (3): where the minor has an estate administered by a GUARDIAN, the contract IS NOT BINDING UPON THE ESTATE as to premiums EXCEPT WHEN CONSENTED TO BY THE GUARDIAN AND APPROVED BY THE DISTRICT COURT, FOR EACH ANNUAL PREMIUM PAYMENT.

A building worth $200,000 has an 80% coinsurance clause and is insured for $120,000. A $40,000 loss occurs (no deductible). The insurer pays:

1. $40,000
2. $24,000
3. $32,000
4. $30,000 ✓

Why: Required = 80% × $200,000 = $160,000. Payment = ($120,000 ÷ $160,000) × $40,000 = $30,000.

How may a Montana search requirement be excused where the insured is an exempt commercial purchaser?

1. Where the insured is an exempt commercial purchaser, without more; the status of the insured is itself the exemption, the legislature having taken the view that a purchaser large enough to qualify does not need the protection of a search of the admitted market.
2. Where the insured is an exempt commercial purchaser and has retained a qualified risk manager who certifies in writing to the commissioner that the coverage is unavailable in the admitted market on terms the purchaser is willing to accept for the risk concerned.
3. Where the insured is an exempt commercial purchaser and the producing producer has obtained the commissioner's written consent to dispense with the search, the consent being good for one year and renewable at each anniversary of the policy so long as the status continues.
4. Where the insured is an exempt commercial purchaser; the producing producer has disclosed that the insurance may or may not be available from an authorized insurer with greater protection and oversight; and it has subsequently requested in writing that it be so placed. ✓

Why: MCA 33-2-302(2)(c): A PRODUCING INSURANCE PRODUCER IS NOT REQUIRED TO SATISFY THE SEARCH REQUIREMENTS IN SUBSECTION (2)(a)(ii) IF (i) THE INSURED IS AN EXEMPT COMMERCIAL PURCHASER; (ii) THE PRODUCING INSURANCE PRODUCER PLACING THE COVERAGE HAS DISCLOSED TO THE EXEMPT COMMERCIAL PURCHASER THAT THE INSURANCE MAY OR MAY NOT BE AVAILABLE FROM AN AUTHORIZED INSURER THAT MAY PROVIDE GREATER PROTECTION WITH MORE REGULATORY OVERSIGHT; AND (iii) THE EXEMPT COMMERCIAL PURCHASER HAS SUBSEQUENTLY REQUESTED IN WRITING TO THE PRODUCING INSURANCE PRODUCER THAT THE COVERAGE BE PLACED WITH THE SURPLUS LINES INSURER. EXEMPT COMMERCIAL PURCHASER has the meaning in 33-2-318, and QUALIFIED RISK MANAGER that in 33-2-319.

Who is caught by the prohibitions in MCA 33-17-502, and what is the sanction?

1. Only a person who has previously held a consultant licence and whose licence has lapsed or been revoked, the sanction being a civil penalty of $1,000 for each act together with restitution to every client from whom a fee was taken during the unlicensed period.
2. A person not licensed as an insurance consultant who represents to the public that he is one, or uses a misleading title, or who receives a fee for examining, appraising, reviewing or evaluating a policy or for making recommendations about one, may be fined pursuant to 33-1-317. ✓
3. Any person who charges a fee for insurance advice, including a licensed producer advising a client on a policy the producer has sold, the sanction being suspension of whatever other licence the person holds for a period the commissioner fixes at not more than one year.
4. Only a person who both holds himself out as a consultant and sells insurance in the same transaction; representing oneself as a consultant without taking a fee is not an offence, and the penalty is a written reprimand entered on the commissioner's public register.

Why: MCA 33-17-502(1) reaches a PERSON NOT LICENSED as an insurance consultant who IDENTIFIES OR REPRESENTS TO THE PUBLIC that the person is an insurance consultant, or who USES ANY OTHER DESIGNATION OR TITLE LIKELY TO MISLEAD THE PUBLIC as to the person's insurance qualifications; subsection (2) reaches a person not so licensed WHO RECEIVES A FEE for EXAMINING, APPRAISING, REVIEWING OR EVALUATING any policy, annuity or pension contract, plan or program, or who MAKES RECOMMENDATIONS OR GIVES ADVICE about one. Either MAY BE FINED PURSUANT TO 33-1-317.

A business with predictable, frequent small losses decides to fund those losses internally rather than buy first-dollar insurance. This strategy is:

1. Risk transfer to an insurer
2. Joining an assigned-risk plan
3. Risk avoidance
4. Self-insurance (risk retention) ✓

Why: Funding one's own predictable losses internally is self-insurance, a form of planned risk retention.

In a surety bond, the party who is required to provide the bond and perform the obligation is the:

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

Why: The principal is the party who must perform the obligation and is required to furnish the bond.

What does MCA 33-17-1004 provide about acting without a licence?

1. A person acting without a licence commits a misdemeanour punishable on conviction by a fine or imprisonment, the section creating a criminal offence rather than exposing the person to the administrative penalties the code provides elsewhere for licensees who breach its requirements in this State.
2. A person acting without a licence is subject to the penalty in 33-1-317 alone, the cease and desist machinery in 33-1-318 being available only against a licensee, and the requirements in 33-17-201 having no application to a person who has never held a licence in this State under the chapter.
3. A person acting without a licence may be restrained by injunction on the commissioner's application to the district court, no monetary penalty being available because no licence exists against which the commissioner might otherwise proceed under this part of the chapter as enacted here.
4. In addition to the requirements and penalties described in 33-17-201 and 33-17-411, a person who acts in this state without authority under a licence issued and in force under the chapter is subject to the provisions of 33-1-317 and 33-1-318. ✓

Why: MCA 33-17-1004: IN ADDITION TO THE REQUIREMENTS AND PENALTIES DESCRIBED IN 33-17-201 AND 33-17-411, A PERSON WHO, IN THIS STATE, ACTS WITHOUT HAVING AUTHORITY TO DO SO BY VIRTUE OF A LICENSE ISSUED AND IN FORCE PURSUANT TO THIS CHAPTER IS SUBJECT TO THE PROVISIONS OF 33-1-317 AND 33-1-318 - the commissioner's fine and the cease and desist provisions.

Section I of a Businessowners Policy provides:

1. Liability coverage
2. Auto coverage
3. Common conditions
4. Property coverage ✓

Why: Section I of the BOP addresses property coverage (building and business personal property), while Section II addresses liability.

What do MCA 33-17-612 and 33-17-616 require of an administrator with respect to advertising and to documents the insurer sends it?

1. Advertising must be filed with the commissioner 30 days before use and may be used unless disapproved within that period, and documents received from the insurer must be delivered to policyholders within ten working days of receipt whether or not instructions accompany them.
2. An administrator may use only such advertising pertaining to the business underwritten by an insurer as is approved by the insurer in advance of its use; and written communications given to it for its policyholders shall be delivered promptly after the insurer instructs it. ✓
3. Advertising may be used without the insurer's approval provided it does not name the insurer, and documents received from the insurer must be delivered within the time the written agreement specifies, the statute leaving the period to the parties to fix between them.
4. Advertising must be approved by the insurer and by the commissioner before use, and termination notices must be sent by the insurer directly to policyholders rather than through the administrator, other written communications passing through the administrator as usual.

Why: MCA 33-17-612: AN ADMINISTRATOR MAY USE ONLY SUCH ADVERTISING PERTAINING TO THE BUSINESS UNDERWRITTEN BY AN INSURER AS IS APPROVED BY THE INSURER IN ADVANCE OF ITS USE - the insurer's approval, not the commissioner's, and in advance. MCA 33-17-616: ANY POLICIES, CERTIFICATES, BOOKLETS, TERMINATION NOTICES, OR OTHER WRITTEN COMMUNICATIONS DELIVERED BY THE INSURER TO THE ADMINISTRATOR FOR DELIVERY TO ITS POLICYHOLDERS SHALL BE DELIVERED BY THE ADMINISTRATOR PROMPTLY AFTER RECEIPT OF INSTRUCTIONS FROM THE INSURER TO DO SO.

What are the remaining powers in MCA 33-1-1203(1), and may the commissioner prosecute?

1. To examine the books of any insurer suspected of fraud and to refer the matter to the attorney general, who alone may prosecute; the commissioner has no power to assemble evidence or prepare charges, those being functions of the prosecuting authority in each county.
2. To conduct examinations and to report violations, but not to prosecute in any circumstances, the separation of the regulatory and prosecuting functions being a settled feature of the part and the commissioner's role ending with the delivery of the report to the prosecutor.
3. To conduct examinations to determine the extent of insurance fraud, deceit or intentional misrepresentation; to report any meritorious alleged violation to the prosecuting authority or licensing agencies; and to assemble evidence, prepare charges and prosecute if asked. ✓
4. To conduct examinations, report violations, prosecute any alleged violation the commissioner thinks meritorious whether or not a prosecuting authority has asked for assistance, and compel the attorney general to appear in support of the charges the commissioner prepares.

Why: MCA 33-1-1203(1)(d): CONDUCT INDEPENDENT EXAMINATIONS OF INSURANCE FRAUD TO DETERMINE THE EXTENT OF INSURANCE FRAUD, DECEIT, OR INTENTIONAL MISREPRESENTATION. (e): AFTER INVESTIGATION, REPORT ANY MERITORIOUS ALLEGED VIOLATION OF THE LAW TO THE APPROPRIATE PROSECUTING AUTHORITY OR LICENSING AGENCIES. (f): ASSEMBLE EVIDENCE, PREPARE CHARGES, AND PROSECUTE, IF REQUESTED, OR OTHERWISE ASSIST ANY PROSECUTING AUTHORITY THAT HAS JURISDICTION, INCLUDING THE ATTORNEY GENERAL. The words IF REQUESTED govern the power to prosecute.

How is a Montana guaranty association assessment calculated, and what is the ceiling?

1. In equal shares among all member insurers, the association being a mutual undertaking in which each member bears the same burden; the ceiling is 5% of a member's surplus as regards policyholders, and 60 days' notice must be given before an assessment falls due.
2. In proportion to each insurer's written premiums for the current calendar year, estimated at the date of the assessment and adjusted when the year's figures are known; there is no statutory ceiling, the association assessing whatever is needed to meet its obligations.
3. In the proportion that the net direct written premiums of the member insurer for the preceding calendar year bear to those of all member insurers for that year. Each must be notified not later than 30 days before it is due, and no member may be assessed in any year more than 2% of its net direct written premiums for that year. ✓
4. In proportion to each member's net direct written premiums for the preceding year, with a ceiling of 2% of those premiums in any one year; a member must be notified not later than 10 days before the assessment is due, and no exemption or deferral is available to any member.

Why: MCA 33-10-116(2): THE ASSESSMENTS OF EACH MEMBER INSURER SHALL BE IN THE PROPORTION THAT THE NET DIRECT WRITTEN PREMIUMS OF THE MEMBER INSURER FOR THE PRECEDING CALENDAR YEAR BEAR TO THE NET DIRECT WRITTEN PREMIUMS OF ALL MEMBER INSURERS FOR THE PRECEDING CALENDAR YEAR. EACH MEMBER INSURER SHALL BE NOTIFIED OF THE ASSESSMENT NOT LATER THAN 30 DAYS BEFORE IT IS DUE. NO MEMBER INSURER MAY BE ASSESSED IN ANY YEAR AN AMOUNT GREATER THAN 2% OF THAT MEMBER INSURER'S NET DIRECT WRITTEN PREMIUMS FOR THE PRECEDING CALENDAR YEAR. (1): the association assesses what is necessary to pay ITS OBLIGATIONS UNDER 33-10-105(1)(a), THE EXPENSES OF HANDLING COVERED CLAIMS, THE COST OF EXAMINATIONS UNDER 33-10-108, and other authorized expenses.

To insure a $25,000 diamond ring for all-risk coverage with no special sublimit and often no deductible, the best option is:

1. Increase the Coverage A dwelling limit so the ring falls within the larger amount of insurance
2. Add the inflation guard endorsement
3. Add a Scheduled Personal Property endorsement / Personal Articles Floater ✓
4. Rely on the unendorsed Coverage C jewelry limit

Why: Scheduling the ring on a Personal Articles Floater (scheduled personal property endorsement) provides broad coverage above the Coverage C jewelry sublimit, typically with no deductible.

An insurer sends an out-of-state adjuster into Montana to handle a series of losses arising from a single hailstorm. What does MCA 33-17-301(5) say?

1. A temporary emergency adjuster licence must be obtained from the commissioner before the adjuster begins work, is valid for 90 days from the date of the catastrophe, and may be renewed once by the sending insurer on a showing that the adjustment is not yet completed.
2. The exemption for a series of losses applies only where the governor has declared a state of emergency for the affected counties, and the sending insurer must file with the commissioner a list of every adjuster it deploys within ten days of the declaration and again as the list changes.
3. The adjuster is exempt from examination but not from licensure, and must apply for and receive a Montana adjuster licence within 15 days of entering the State, the fee being waived where the adjustment arises out of a catastrophe common to all the losses.
4. No adjuster licence or qualifications are required of an adjuster sent into this State by and on behalf of an insurer or adjusting business entity to investigate or adjust a particular loss, or a series of losses resulting from a catastrophe common to all. ✓

Why: MCA 33-17-301(5): AN ADJUSTER LICENSE OR QUALIFICATIONS ARE NOT REQUIRED for an adjuster SENT INTO THIS STATE BY AND ON BEHALF OF AN INSURER OR ADJUSTING BUSINESS ENTITY for the purpose of INVESTIGATING OR MAKING ADJUSTMENTS OF A PARTICULAR LOSS under an insurance policy, or for the ADJUSTMENT OF A SERIES OF LOSSES RESULTING FROM A CATASTROPHE COMMON TO ALL THE LOSSES. No emergency filing, declaration or temporary licence is called for by the statute.

Why does Part One (Workers Compensation) of the standard policy contain no dollar limit of liability?

1. Because benefits are capped by the policy's aggregate limit
2. Because the benefit amounts are set by the state's WC statute ✓
3. Because the insurer can choose how much to pay
4. Because Part One only covers medical bills

Why: Part One has no policy limit because the insurer agrees to pay whatever benefits the state statute requires; the statute, not the policy, controls the amount.

What power of exemption does MCA 33-1-501(7) give the Montana commissioner?

1. To exempt a particular insurer from the filing requirement for a period not exceeding one year on a showing that the insurer's volume of business in this State does not justify the expense of the filing, the exemption being renewable on a fresh showing each year.
2. To exempt a class of forms by rule adopted under the Montana Administrative Procedure Act, the commissioner having no power to exempt a document or form individually and every exemption therefore being published and open to comment before it takes effect.
3. To exempt surety bonds and forms of unique character, which are the documents the section cannot practicably reach, the exemption power being the mechanism by which those two classes are taken out of the filing requirement in the first place under this section.
4. To exempt from the requirements of the section, for so long as the commissioner considers proper, an insurance document, form, or type of form to which, in the commissioner's opinion, the section may not practicably be applied, or whose filing and approval are not necessary for the protection of the public. ✓

Why: MCA 33-1-501(7): THE COMMISSIONER MAY EXEMPT FROM THE REQUIREMENTS OF THIS SECTION, FOR SO LONG AS THE COMMISSIONER CONSIDERS PROPER, AN INSURANCE DOCUMENT, FORM, OR TYPE OF DOCUMENT OR FORM TO WHICH, IN THE COMMISSIONER'S OPINION, THIS SECTION MAY NOT PRACTICABLY BE APPLIED OR THE FILING AND APPROVAL OF WHICH ARE NOT DESIRABLE OR NECESSARY FOR THE PROTECTION OF THE PUBLIC. Surety bonds and unique-character forms are excluded by subsection (1)(a) itself, not by this power.

A Montana domestic insurer uses a form in another state which that state does not review. Can the Montana commissioner reach it?

1. Yes. MCA 33-1-501(8) applies the section to a form used by a domestic insurer for delivery outside Montana if the supervisory official there informs the commissioner that the form is not subject to approval by the official, and upon the commissioner's order requiring it to be submitted. The same standards apply. ✓
2. No. The section reaches only forms delivered or issued for delivery in Montana; a form used by a Montana insurer elsewhere is a matter for the supervisory official of the jurisdiction concerned, whatever that official's practice about reviewing forms may happen to be.
3. Yes, and without any condition: every form used anywhere by an insurer domiciled in this State must be filed with and approved by the Montana commissioner, the commissioner being the domiciliary regulator and answerable for the insurer's conduct in every jurisdiction.
4. Yes, but only where the other jurisdiction has adopted the interstate insurance product regulation compact, in which case the commission provided for in 33-39-101 approves the form and the Montana commissioner reviews the commission's decision on the insurer's request.

Why: MCA 33-1-501(8): THIS SECTION APPLIES TO A FORM USED BY A DOMESTIC INSURER FOR DELIVERY IN A JURISDICTION OUTSIDE MONTANA IF THE INSURANCE SUPERVISORY OFFICIAL OF THE JURISDICTION INFORMS THE COMMISSIONER THAT THE FORM IS NOT SUBJECT TO APPROVAL OR DISAPPROVAL BY THE OFFICIAL AND UPON THE COMMISSIONER'S ORDER REQUIRING THE FORM TO BE SUBMITTED TO THE COMMISSIONER FOR THE PURPOSE. THE SAME STANDARDS APPLY TO THESE FORMS AS APPLY TO FORMS FOR DOMESTIC USE. Both conditions - the official's information AND the commissioner's order - are required.

A Montana principal has specially deprived its agent of part of the statutory authority. As to whom is the restriction effective under MCA 28-10-404?

1. The agent still has the statutorily described authority ostensibly, except as to persons who have actual or constructive notice of the restriction upon the agent's authority. Either kind of notice will do, and the restriction is otherwise of no effect against a third person. ✓
2. The restriction is effective as against everyone from the moment it is imposed, whether or not any third person knows or could know of it, since an agent may not exceed the limits of the agent's actual authority and a person dealing with an agent is bound to inquire what that actual authority is before relying upon it.
3. The restriction is effective only as against persons who have actual notice of it in writing, constructive notice being insufficient to limit an agent's ostensible authority, so that a third person who could have discovered the restriction by reasonable inquiry may still hold the principal to the full statutory authority of the agent.
4. The restriction is effective as against every person who deals with the agent after it is imposed, except a person who has in good faith and without ordinary negligence parted with value upon the faith of the authority, that person being entitled to hold the principal to the full authority which the statute describes.

Why: MCA 28-10-404: EVERY AGENT HAS THE AUTHORITY AS DESCRIBED BY TITLE 30, CHAPTER 11, PARTS 5 AND 6, AND THIS CHAPTER UNLESS SPECIALLY DEPRIVED OF THAT AUTHORITY BY THE AGENT'S PRINCIPAL AND HAS EVEN THEN THE STATUTORILY DESCRIBED AUTHORITY OSTENSIBLY EXCEPT AS TO PERSONS WHO HAVE ACTUAL OR CONSTRUCTIVE NOTICE OF THE RESTRICTION UPON THE AGENT'S AUTHORITY. ACTUAL OR CONSTRUCTIVE - either kind of notice defeats the ostensible authority.

What may the commissioner delegate under MCA 33-1-304, and who answers for the result?

1. The exercise in the commissioner's name of any power, duty or function, whether ministerial or discretionary, vested in the commissioner by the code; and the commissioner is responsible for the official acts of the person acting in that name. ✓
2. Ministerial functions only, the section reserving every discretionary power to the commissioner personally; and the delegate is answerable for the delegate's own official acts rather than the commissioner, who is responsible only for the choice of delegate.
3. Any power the code confers, but only to a deputy commissioner and only by a written instrument filed with the Secretary of State, and the delegate then exercises the power in the delegate's own name and on the delegate's own responsibility.
4. No power at all without the Governor's written approval, the section treating the commissioner's authority as personal to the office holder, and a delegate's act being voidable at the instance of any person affected by it in this State.

Why: MCA 33-1-304: (1) THE COMMISSIONER MAY DELEGATE TO ANY DEPUTY, ASSISTANT, EXAMINER, OR EMPLOYEE of the department THE EXERCISE OR DISCHARGE IN THE COMMISSIONER'S NAME OF ANY POWER, DUTY, OR FUNCTION, WHETHER MINISTERIAL OR DISCRETIONARY, vested by the code in the commissioner. (2) THE COMMISSIONER IS RESPONSIBLE FOR THE OFFICIAL ACTS of that person ACTING IN THE COMMISSIONER'S NAME AND BY THE COMMISSIONER'S AUTHORITY.

Under MCA 33-1-1202(1), what is the first way a person commits administrative or civil insurance fraud?

1. By knowingly making a false statement to an insurer with intent to defraud it, the section requiring proof of an intention to deceive as well as of the falsity of the statement and of the materiality of the fact to which the statement relates in the claim concerned.
2. By presenting, or causing to be presented, to any insurer, purported insurer, producer, or administrator any written or oral statement containing false, incomplete, or misleading information material to or in support of a claim, for the purpose of obtaining money. ✓
3. By presenting a claim for a loss that did not occur, the first subsection being directed at wholly fabricated claims and the later subsections at claims which are genuine but inflated or supported by documents which have been altered after they were first issued.
4. By presenting a statement containing false information to an insurer, whether or not the person sought any money or benefit by doing so, the subsection reaching the false statement itself and leaving the person's purpose to go to the penalty rather than to liability.

Why: MCA 33-1-1202(1): a person commits the act of administrative or civil insurance fraud when the person, FOR THE PURPOSE OF OBTAINING ANY MONEY OR BENEFIT, PRESENTS OR CAUSES TO BE PRESENTED TO ANY INSURER, PURPORTED INSURER, PRODUCER, OR ADMINISTRATOR, AS DEFINED IN 33-17-102, ANY WRITTEN OR ORAL STATEMENT, INCLUDING COMPUTER-GENERATED DOCUMENTS, CONTAINING FALSE, INCOMPLETE, OR MISLEADING INFORMATION CONCERNING ANY FACT OR THING MATERIAL TO, AS PART OF, OR IN SUPPORT OF A CLAIM FOR PAYMENT OR OTHER BENEFIT PURSUANT TO AN INSURANCE POLICY. Note INCOMPLETE as well as false, and ORAL as well as written.

What sort of body is the Montana insurance guaranty association, and who belongs to it?

1. A state agency within the office of the commissioner, funded by appropriation and staffed by the commissioner's employees; membership is voluntary, and an insurer which chooses not to join is not assessed but its policyholders receive no protection from the association.
2. A nonprofit corporation organized under the laws of this State, in which membership is open to any insurer writing any line of insurance here on payment of the annual subscription fixed by its board, whether or not the insurer holds a Montana certificate of authority.
3. A nonprofit unincorporated legal entity. All insurers defined as member insurers shall be and remain members as a condition of their authority to transact insurance in this state. It acts under a plan of operation under 33-10-106 and through a board of directors under 33-10-104. ✓
4. An unincorporated association of insurers formed voluntarily by agreement among them, which the commissioner has recognized for the purposes of this part; an insurer may withdraw on giving notice to the board, and its authority to transact insurance is unaffected.

Why: MCA 33-10-103: THERE IS CREATED A NONPROFIT UNINCORPORATED LEGAL ENTITY TO BE KNOWN AS THE MONTANA INSURANCE GUARANTY ASSOCIATION. ALL INSURERS DEFINED AS MEMBER INSURERS SHALL BE AND REMAIN MEMBERS OF THE ASSOCIATION AS A CONDITION OF THEIR AUTHORITY TO TRANSACT INSURANCE IN THIS STATE. THE ASSOCIATION SHALL PERFORM ITS FUNCTIONS UNDER A PLAN OF OPERATION ESTABLISHED AND APPROVED UNDER 33-10-106 AND SHALL EXERCISE ITS POWERS THROUGH A BOARD OF DIRECTORS ESTABLISHED UNDER 33-10-104.

What do HOME STATE, LAPSE and SUSPEND mean under MCA 33-17-102?

1. Home state is the District of Columbia or any state or territory where a licensee maintains a principal place of residence or a principal place of business; lapse is the expiration of the license for failure to renew by the biennial renewal date; suspend is to bar the use of a person's licence for a period of time. ✓
2. Home state is the state in which a licensee was first licensed as a producer; lapse is the surrender of a licence by the licensee; and suspend is to cancel a licence permanently, the three expressions describing how a producer's authority in this State begins and how it comes to an end under the chapter as enacted.
3. Home state is the state of the licensee's birth or naturalisation; lapse is the failure of an insurer to renew an appointment; and suspend is to bar the use of a licence indefinitely until the commissioner is satisfied that the ground of suspension has been removed by the licensee concerned in this State.
4. Home state is the state whose examination the licensee passed; lapse is the expiration of a licence for failure to complete continuing education; and suspend is to restrict a licence to fewer lines of authority than it originally carried, each term being defined by reference to the licensing process rather than to residence.

Why: MCA 33-17-102: (8) HOME STATE MEANS THE DISTRICT OF COLUMBIA OR ANY STATE OR TERRITORY OF THE UNITED STATES IN WHICH A PERSON LICENSED UNDER THIS CHAPTER MAINTAINS A PRINCIPAL PLACE OF RESIDENCE OR A PRINCIPAL PLACE OF BUSINESS. (11) LAPSE MEANS THE EXPIRATION OF THE LICENSE FOR FAILURE TO RENEW BY THE BIENNIAL RENEWAL DATE. (24) SUSPEND MEANS TO BAR THE USE OF A PERSON'S LICENSE FOR A PERIOD OF TIME. Residence OR business will do for a home state - it is not confined to where the person lives.

What special deadline does MCA 33-18-245 set for small motor vehicle damage claims, and what takes a claim out of it?

1. An insurer must pay any motor vehicle property damage claim of $5,000 or less within 30 calendar days of the proof of loss, the deadline being disapplied only where the insurer has reported a suspicion of insurance fraud to the commissioner as the prompt payment section requires.
2. An insurer must offer to pay a motor vehicle claim of $2,500 or less within 20 working days of the proof of loss, the section applying to bodily injury as well as property damage claims and yielding only where the claimant has failed to complete the proof of loss correctly.
3. An insurer shall make an offer to pay or shall pay all approved claims for covered services or damages that solely involve the recovery of property damages of $2,500 or less arising out of the ownership, maintenance or use of a motor vehicle within 30 working days of receipt of a correctly completed proof of loss. ✓
4. An insurer must pay all approved motor vehicle claims within 30 working days whatever their size, the figure of $2,500 being the threshold above which the insurer may instead make an offer to pay rather than pay, and prepaid providers being subject to the same deadline.

Why: MCA 33-18-245(1): EXCEPT FOR PROVIDERS WHO ARE PREPAID OR AGREE TO A DIFFERENT PAYMENT SCHEDULE, AN INSURER SHALL MAKE AN OFFER TO PAY OR SHALL PAY ALL APPROVED CLAIMS FOR COVERED SERVICES OR DAMAGES THAT SOLELY INVOLVE THE RECOVERY OF PROPERTY DAMAGES IN AN AMOUNT OF $2,500 OR LESS ARISING OUT OF THE OWNERSHIP, MAINTENANCE, OR USE OF A MOTOR VEHICLE WITHIN 30 WORKING DAYS OF RECEIPT OF A PROOF OF LOSS THAT IS CORRECTLY COMPLETED AND SUBMITTED. Subsection (2): it DOES NOT APPLY to an insurer WHO HAS NOTIFIED THE INSURED OR THE INSURED'S ASSIGNEE OF THE REASONS FOR ITS FAILURE TO PAY THE CLAIM IN FULL, or that HAS MADE A REASONABLE REQUEST FOR ADDITIONAL INFORMATION OR DOCUMENTS.

What disclosure must a Montana personal lines insurer make at application about credit information, under MCA 33-18-607?

1. The insurer must obtain the applicant's written consent before it obtains a credit report, the consent being valid for the life of the policy and revocable at any time on written notice to the insurer, in which case credit information may no longer be used at renewal.
2. The insurer or its agent shall disclose, either on the application or when it is taken, that it may obtain credit information - written, or in the same medium as the application. It need not repeat it to an insured on a renewal policy who has been given one already. ✓
3. The insurer must disclose in writing, within ten days of taking the application, the name and address of the consumer reporting agency from which it proposes to obtain the report, and must repeat that disclosure at each renewal of the policy while it remains in force.
4. No disclosure is required at application; the part requires notice only where the insurer takes an adverse action on credit information, in which case the consumer is told the reasons and the factors which were the primary influences of the insurer's decision.

Why: MCA 33-18-607(1): if an insurer writing personal insurance USES CREDIT INFORMATION IN UNDERWRITING OR RATING A CONSUMER, THE INSURER OR ITS AGENT SHALL DISCLOSE, EITHER ON THE INSURANCE APPLICATION OR AT THE TIME THAT THE INSURANCE APPLICATION IS TAKEN, THAT IT MAY OBTAIN CREDIT INFORMATION IN CONNECTION WITH THE APPLICATION. The disclosure MUST BE EITHER WRITTEN OR PROVIDED TO AN APPLICANT IN THE SAME MEDIUM AS THE APPLICATION. THE INSURER DOES NOT HAVE TO PROVIDE THE DISCLOSURE STATEMENT TO ANY INSURED ON A RENEWAL POLICY IF THE CONSUMER HAS PREVIOUSLY BEEN PROVIDED A DISCLOSURE STATEMENT. Subsection (2) supplies a safe-harbour form of words, use of which CONSTITUTES COMPLIANCE.

What penalty does MCA 33-18-1005 impose for violating a cease and desist order?

1. A civil penalty not to exceed $1,000, each day of violation being a separate violation, with the total not to exceed A $10,000 aggregate; the Attorney General or the county attorney petitions the District Court to recover it. ✓
2. A civil penalty not to exceed $10,000 for each violation, with no aggregate ceiling, each day being treated as a separate violation so that a continuing breach becomes progressively more expensive for the person concerned.
3. A fine not to exceed $25,000 imposed by the commissioner under 33-1-317, the cease and desist provisions carrying no separate penalty of their own and being enforced through the general penalty section of the code.
4. A civil penalty not to exceed $1,000 for the whole of a continuing violation however long it lasts, the section deliberately declining to multiply the penalty by the number of days in order to keep it proportionate to the conduct.

Why: MCA 33-18-1005: (1) any person who VIOLATES A CEASE AND DESIST ORDER issued pursuant to 33-18-1004 IS SUBJECT TO A CIVIL PENALTY NOT TO EXCEED $1,000. EACH DAY OF VIOLATION CONSTITUTES A SEPARATE VIOLATION. THE TOTAL PENALTY MAY NOT EXCEED A $10,000 AGGREGATE. Upon the department's request, THE ATTORNEY GENERAL OR THE COUNTY ATTORNEY of the county where the violation occurred SHALL PETITION THE DISTRICT COURT to impose, assess and recover it. (2) such an action IS NOT A BAR to enforcement by injunction or other remedies. (3) MONEYS COLLECTED SHALL BE DEPOSITED IN THE STATE GENERAL FUND.