New York Property & Casualty Insurance License, Practice Exams

Under the CGL, the duty to defend ends when:

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

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

Section 2403 prohibits a person from engaging in any trade practice in this state that constitutes:

1. A breach of the producer's appointment agreement
2. A misdemeanor under the penal law only
3. A defined violation or a determined violation as defined in the article ✓
4. An act that the National Association of Insurance Commissioners has flagged

Why: Section 2403 states that no person shall engage in this state in any trade practice constituting a defined violation or a determined violation as defined in the article.

Under §3426(e), a renewal that increases premium (excluding exposure/experience-rating changes) triggers a 'conditional renewal' notice only if the premium increase exceeds:

1. 15 percent
2. 10 percent ✓
3. 5 percent
4. 25 percent

Why: §3426(e)(1)(B) treats a renewal as a conditional renewal (requiring notice) when it is conditioned upon a premium increase in excess of ten percent (excluding increases from added exposure or experience/loss/retro rating or audit).

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

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

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

Under §13, an employer's liability for medical treatment causally related to a compensable injury is:

1. Limited to the first two years of treatment after the date of accident
2. Capped at $10,000 per claim, after which the employee's group health plan pays
3. Provided for such period as the nature of the injury or process of recovery may require, without a dollar cap ✓
4. Available only for hospital care ordered by a Board-authorized physician, not for outpatient therapy

Why: Section 13 requires the employer to provide medical, surgical, and related care for such period as the nature of the injury or the process of recovery may require. Causally related medical benefits are not capped in dollars or duration.

Under the PAP, "occupying" means:

1. Seated behind the wheel with the engine running and the transmission in gear
2. Driving the vehicle on a public road open to traffic
3. In, upon, getting in, on, out, or off a vehicle ✓
4. Holding title to or leasing the vehicle

Why: "Occupying" is defined as in, upon, getting in, on, out, or off of a vehicle, which is broader than merely riding inside it.

The RETROACTIVE DATE on a claims-made policy:

1. Establishes the earliest date of loss for which a claim will be covered ✓
2. Is always the same as the policy expiration date shown in the declarations
3. Doubles the general aggregate limit for the first year
4. Extends the window for reporting claims for sixty days after the policy expires

Why: The retroactive date sets the earliest injury/damage date that can be covered; losses occurring before it are excluded.

"Your covered auto" under the PAP includes:

1. Any car the insured happens to drive, owned or not, anywhere in the world, so long as the owner has given permission
2. Only vehicles the insured leases under a written agreement of six months or longer, with owned autos added by endorsement
3. Vehicles shown in the Declarations, newly acquired autos, trailers owned, and temporary substitutes (per terms) ✓
4. Only the first auto listed in the Declarations, with later additions needing a new policy

Why: "Your covered auto" encompasses vehicles in the Declarations, certain newly acquired autos, owned trailers, and qualifying temporary substitute autos.

The CGL's coverage for 'damage to premises rented to you' generally does NOT apply to:

1. Damage the insured causes to premises it owns ✓
2. Fire damage to a building rented to the insured
3. Lightning damage to rented premises
4. Explosion or smoke damage to short-term rented premises

Why: This coverage applies to rented premises, not to property the insured owns, which would need property insurance.

The policy period condition specifies:

1. The deductible that applies to each covered loss during the term
2. The territory within which a covered loss must occur for coverage to apply
3. The number of persons who may qualify as insureds under the contract
4. The dates and times during which coverage is effective ✓

Why: The policy period sets the effective and expiration dates/times defining when coverage applies.

A nonresident producer changes his home state to another state. Under § 2134, what must he do?

1. Surrender the New York license and file a completely new nonresident application together with the required license fee and photograph
2. Within thirty days provide certification of the change from the new home state, with no fee or license application required ✓
3. Retake and pass the New York producer examination for each line of authority held, within ninety days after the change of home state
4. Obtain a fresh certificate of appointment from every insurer the producer represents in this state before writing any more business

Why: Section 2134(b) requires a producer who changes home state to provide certification from the new home state within thirty days, and no fee or application is required.

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.

With auto liability split limits of 50/100/25, the maximum paid for bodily injury to any one person in an accident is:

1. $100,000
2. $50,000 ✓
3. $175,000
4. $25,000

Why: The first number (50) is the per-person bodily injury limit: $50,000.

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

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

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

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

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

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

In the Homeowners policy, the term 'insured location' generally includes all of the following EXCEPT:

1. Other premises acquired during the policy period for use as a residence
2. The residence premises
3. A commercial warehouse rented to a third party ✓
4. Vacant land owned by the insured

Why: Insured location includes the residence premises, newly acquired residences, vacant land, and certain other personal-use premises, but not a separately rented commercial property.

Under §18, the required notice of injury to the employer must be:

1. Filed with the nearest state police barracks within twenty-four hours of the accident
2. In writing, stating the time, place, nature, and cause of the injury ✓
3. Notarized and countersigned by the physician who first treated the injury
4. Given orally to a supervisor on the day of the accident

Why: Section 18 requires the notice to be in writing, containing the employee's name and address and stating in ordinary language the time, place, nature, and cause of the injury.

Business Income coverage is designed primarily to cover:

1. Theft of money and securities from the premises by employees or outsiders
2. Liability claims brought by customers injured on the insured's premises
3. Loss of net income and continuing expenses during a covered shutdown ✓
4. The cost to rebuild the damaged building

Why: Business Income covers the actual loss of net income plus continuing normal operating expenses (including payroll) during the period of restoration after a covered loss.

In insurance, exposure refers to:

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

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

A products liability claim alleges a manufactured part injured a user three years after sale. This is covered under the CGL as:

1. Premises and operations, because the part injured the user away from the insured's premises
2. Damage to premises rented to the insured, subject to the fire damage sublimit
3. Coverage B, because selling a defective part is an advertising injury offense
4. Products and completed operations, subject to that separate aggregate ✓

Why: Injury from a sold product is a products liability claim subject to the Products-Completed Operations Aggregate.

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

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

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

A common carrier's legal liability for cargo it transports is generally:

1. Identical to that of a bailee for hire, requiring only ordinary care of the goods
2. Nonexistent, because the shipper's own cargo policy is the sole source of recovery
3. Limited and based on negligence, with several exceptions like acts of God ✓
4. Absolute and unlimited for every loss

Why: Common carriers have a high but not absolute liability for goods; they are excused for losses from acts of God, public enemy, inherent vice, shipper's fault, and public authority.

A peril is best described as:

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

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

Under § 2611, before an insurer may require an individual proposed for coverage to undergo an HIV related test, it must obtain:

1. A written referral from the individual's attending physician stating that the test is medically indicated
2. The written informed consent of the individual, and must provide general information about AIDS and HIV transmission ✓
3. The individual's oral agreement, recorded by the producer at the application interview and noted in the underwriting file
4. Prior approval of the testing protocol from the state department of health

Why: Section 2611(a) bars requiring an HIV related test without the written informed consent of the individual and without providing general information about AIDS and the transmission of HIV infection.

Under the standard fire policy's 'Conditions suspending or restricting insurance,' the insurer is not liable for loss occurring while a described building is vacant or unoccupied beyond a period of:

1. 60 consecutive days ✓
2. 45 consecutive days
3. 90 consecutive days
4. 30 consecutive days

Why: The clause suspends coverage while a described building is vacant or unoccupied beyond a period of sixty consecutive days, unless otherwise provided in writing.

Pure risk differs from speculative risk in that pure risk involves:

1. Only the chance of loss or no loss ✓
2. Voluntary participation for reward
3. Guaranteed profit
4. Both loss and gain possibilities

Why: Pure risk presents only the possibility of loss or no loss, with no opportunity for gain, making it the only insurable type of risk.

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.

After a covered auto policy has been in effect for 60 days (or on a renewal), permissible grounds for cancellation are limited to which of the following?

1. Nonpayment of premium ✓
2. The insured's age
3. The insured filed a single small claim
4. A change in the insured's occupation

Why: §3425(c)(1) limits post-60-day cancellation of auto policies to nonpayment of premium, license suspension/revocation, or fraud/material misrepresentation.

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.

New York's Disability Benefits Law (Article 9, §204) differs from workers' compensation in that it covers:

1. Only permanent total disability
2. Death benefits for dependents only
3. On-the-job injuries only, as §10 does
4. Off-the-job (non-occupational) disabilities ✓

Why: Article 9's Disability Benefits Law (§204) provides benefits for non-occupational (off-the-job) disabilities and, since 2018, paid family leave, in contrast to workers' compensation, which covers work-related injuries.

Which loss would be covered under HO-3 on the dwelling but NOT on personal property, due to the difference in covered perils?

1. A fire loss originating in the home's attached garage
2. An accidental, non-named-peril physical loss to the structure ✓
3. A lightning strike that damages the roof
4. A windstorm loss to the siding and shingles

Why: HO-3 covers the dwelling open-peril, so an accidental loss not on the named-perils list is covered for the structure but not for Coverage C personal property, which is named-peril only.

A qualified person injured by a KNOWN uninsured motorist must file an affidavit (notice of claim) with MVAIC within how many days of the accrual of the cause of action?

1. 120 days
2. One year
3. 90 days
4. 180 days ✓

Why: §5208(a)(1) requires a qualified person to file the affidavit within one hundred eighty days of accrual as a condition precedent to applying for payment.

Under §28, a claim for compensation generally must be filed with the Board within:

1. One year after the accident, the same period §18 allows for notice to the employer
2. Three years after the accident, measured from the date the employer's report of injury is filed
3. Two years after the accident (or two years after death in a death case) ✓
4. Ninety days after the accident

Why: Section 28 bars the right to claim compensation unless a claim is filed with the Chair within two years after the accident, or within two years after death if death results.

A PAP liability limit shown as 100/300/50 means:

1. $100,000 per person BI, $300,000 per accident BI, $50,000 PD per accident ✓
2. $100,000 of property damage, $300,000 of bodily injury per person, and $50,000 of medical payments
3. $100,000 combined for the whole accident, with the other two figures showing the deductibles
4. $100,000 of total coverage subject to a $300 deductible and a $50 per-claim service charge

Why: Split limits 100/300/50 mean $100,000 bodily injury per person, $300,000 bodily injury per accident, and $50,000 property damage per accident.

Under § 2137, the written examination and prelicensing education for a life settlement broker's license are NOT required of which applicant?

1. An applicant sponsored in writing by a licensed life settlement provider
2. An applicant who has held a New York property and casualty broker license for ten years
3. An insurance producer with a life line of authority licensed in this state for at least one year ✓
4. An applicant employed by a life settlement provider for the past six months

Why: Section 2137(f)(1)(A) waives the exam and prelicensing education for a producer with a life line of authority licensed in this state for at least one year.

Concurrent causation losses involving ordinance or law, earth movement, water damage (flood), and neglect are addressed by:

1. The liberalization clause, which restores coverage whenever two perils combine and one of them is otherwise excluded from the form
2. Coverage A, which pays the full dwelling limit whenever any covered peril joins an excluded one in producing the damage
3. The anti-concurrent causation language excluding loss when an excluded peril contributes, regardless of other causes ✓
4. Coverage F, the medical payments section, which apportions a loss among its contributing causes and pays the insured's share

Why: Homeowners forms use anti-concurrent causation language to exclude losses when an excluded peril such as flood or earth movement contributes, regardless of any other cause.

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.

Which best describes the difference between replacement cost and actual cash value?

1. ACV is always higher than replacement cost
2. They are identical
3. Replacement cost includes depreciation; ACV does not
4. ACV is replacement cost minus depreciation ✓

Why: Actual cash value equals replacement cost minus depreciation, so it pays less than replacement cost on older property.

A manufacturer being held liable for injury caused by a defective product, without the injured party needing to prove negligence, is an example of:

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

Why: Strict liability in product cases holds the manufacturer responsible for defective products regardless of the level of care exercised.

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

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

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

An agent files her renewal application late, after the sixty-day deadline. What additional consequence does § 2103 specify?

1. She is subject to a further fee for late filing of ten dollars ✓
2. The superintendent must hold a hearing before the renewal can be processed
3. Her existing license is immediately void and she must reapply as a new applicant
4. She must complete an additional forty hours of continuing education

Why: Section 2103(j)(10) imposes a further fee of ten dollars for late filing when the renewal is not filed at least sixty days before expiration.

The Motor Vehicle Accident Indemnification Corporation (MVAIC) exists primarily to:

1. Write automobile liability policies for drivers rejected by three or more authorized insurers
2. Pay losses to innocent victims of accidents caused by financially irresponsible motorists ✓
3. Set the rates charged for compulsory automobile coverage in this state
4. Pay first-party no-fault benefits to every New York driver

Why: Ins. Law §5201(b) establishes MVAIC to recompense innocent victims of accidents caused by uninsured, unidentified, stolen, or disclaimed-coverage vehicles.

Section 2609 bars a person engaged in issuing performance or surety bonds from refusing to issue such a bond solely because of which set of characteristics?

1. Citizenship, immigration status, or length of residence in the state
2. The applicant's credit rating, bonding history, or prior claim record
3. The applicant's net worth, trade, or the dollar size of the contract bonded
4. Race, creed, color, sex, national origin, age, or marital status ✓

Why: Section 2609 prohibits refusing to issue a performance or surety bond solely because of the race, creed, color, sex, national origin, age, or marital status of the applicant.

Private crop-hail insurance is distinguished from federal MPCI in that crop-hail:

1. Covers every natural peril capable of reducing a crop yield, including drought and excess moisture
2. Covers only the farm dwelling and its contents
3. Is administered by FEMA alongside the National Flood Insurance Program for agricultural producers
4. Is a private, narrowly focused policy covering primarily hail (and often fire) damage to crops ✓

Why: Crop-hail is sold by private insurers and typically covers hail (often with fire) on a per-acre basis, separate from the broad federal MPCI program.

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

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

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

Under the Auto Dealers (garage) program, "garagekeepers" coverage protects:

1. Customers' autos left in the dealer's care, custody, or control for service or storage ✓
2. Employees' personal vehicles while parked at their own homes overnight, before they report to the dealership
3. Pedestrians injured anywhere in the city, paying their medical bills without regard to the dealer's fault
4. The dealer's own showroom building and the office contents inside it against fire and windstorm

Why: Garagekeepers coverage insures damage to customers' vehicles in the insured's care, custody, or control, such as cars left for repair.

Part EE of Chapter 58 of the Laws of 2026 amended the §5102(d) definition of 'serious injury' for actions and proceedings commenced on or after 26 May 2026. Which category did that amendment DELETE?

1. The '90/180' category — a medically determined injury of a non-permanent nature preventing substantially all usual and customary daily activities for not less than 90 of the 180 days immediately following the occurrence ✓
2. Significant disfigurement
3. A fracture
4. Permanent consequential limitation of use of a body organ or member

Why: Part EE of Chapter 58 of the Laws of 2026 (effective 26 May 2026) deleted the 90/180-day limb from Insurance Law §5102(d). Death, dismemberment, significant disfigurement, a fracture, loss of a fetus, permanent loss of use, permanent consequential limitation of use and significant limitation of use all remain. See DFS Insurance Circular Letter No. 3 (2026).

Under the law of agency, the acts of the producer (agent) are generally considered to be the acts of the:

1. Reinsurer
2. Insured
3. State insurance department
4. Insurer ✓

Why: An agent represents the insurer; under the law of agency, the agent's actions within authority are treated as those of the insurer (principal).

A maintenance bond is best described as a surety bond that:

1. Guarantees the workmanship and materials of completed construction for a stated period ✓
2. Covers loss from dishonest acts of the contractor's employees on the job site
3. Guarantees payment to subcontractors, laborers, and material suppliers on the project, which is the function of a payment bond
4. Guarantees the contractor will honor the bid price it submitted

Why: A maintenance bond guarantees that completed work will be free from defects in workmanship/materials for a specified time.

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

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

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

To appoint a producer, within how many days from the date the agency contract is executed or the first application is submitted must the appointing insurer file the notice of appointment?

1. Within ninety days
2. Within fifteen days ✓
3. Within sixty days
4. Within thirty days

Why: Section 2112(b) requires the appointing insurer to file the notice of appointment within fifteen days from execution of the agency contract or submission of the first application.

For purposes of an insurance consultant's license, which kinds of insurance constitute 'life insurance'?

1. Only ordinary whole life and term life policies, excluding annuities
2. The kinds authorized in paragraphs one, two and three of § 1113(a) ✓
3. All kinds authorized in paragraphs four through twenty-three of § 1113(a)
4. Variable life and variable annuity products exclusively

Why: Section 2107(a)(1) defines the life-insurance consultant category by reference to paragraphs one, two and three of § 1113(a); general insurance covers paragraphs four through twenty-three.

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

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

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

Inland marine transportation coverage frequently insures property:

1. That is permanently attached to the insured's building foundation
2. Only while it is aboard an ocean vessel
3. Only while it sits inside the insured's own warehouse
4. While being shipped by truck, rail, or other land conveyance ✓

Why: Inland marine transportation coverage protects goods in transit over land (and inland waterways), reflecting marine insurance's roots in covering moving property.

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

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

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

A mutual insurer is owned by its:

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

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

A worker suffers a permanent 50% loss of use of the hand (the hand schedule is 244 weeks). How many weeks of SLU benefit does the schedule yield?

1. 244 weeks
2. 312 weeks
3. About 122 weeks ✓
4. 205 weeks

Why: Section 15(3) assigns the hand 244 weeks for total loss; a 50% loss of use yields roughly half, about 122 weeks, paid at 66 2/3% of the average weekly wage subject to the maximum.

The New York standard fire policy insures against direct loss by which perils in its base insuring agreement?

1. Fire and theft, but not lightning damage
2. Fire, lightning, and removal from premises endangered by the perils insured against ✓
3. All risks of direct physical loss to property except perils specifically excluded
4. Fire and windstorm only, with lightning added by endorsement

Why: The insuring agreement covers direct loss by fire, lightning, and by removal from premises endangered by the perils insured against; theft is expressly excluded.

What is the standard waiting period before Business Income coverage begins?

1. No waiting period
2. 72 hours ✓
3. 24 hours
4. 30 days

Why: The standard ISO Business Income form has a 72-hour waiting period from the time of direct physical loss before coverage applies.

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

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

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

Under § 2612, the fact that a person is or has been a victim of domestic violence is treated how for underwriting?

1. It may be designated as a preexisting condition
2. It is not a permitted underwriting criterion ✓
3. It is a permitted criterion if actuarially supported
4. It may be used only for health insurance

Why: Section 2612(b) states that the fact that a person is or has been a victim of domestic violence is not a permitted underwriting criterion.

A licensed agent charges a client a fee for reviewing and evaluating the client's existing policies. Under § 2119, that fee is permitted only if:

1. The agent files the proposed schedule of fees with the Department of Financial Services and obtains the superintendent's written approval of it
2. The fee does not exceed ten percent of the annual premium on the policies reviewed and is disclosed orally before the review begins
3. The agent credits against the fee any commission earned on replacement coverage
4. It is based upon a written memorandum signed by the party to be charged specifying the amount or extent of the compensation ✓

Why: Section 2119(a)(1) allows such fees only when based on a written memorandum signed by the party to be charged that specifies the amount or extent of compensation.

In a reinsurance arrangement, the company that transfers (gives up) part of its risk is called the:

1. Attorney-in-fact
2. Reinsurer
3. Ceding insurer ✓
4. Surplus lines broker

Why: The ceding insurer is the original insurer that cedes a portion of its risk to a reinsurer.

A homeowner stores a guest's furniture temporarily. Property of others while on the residence premises is:

1. Covered only under Section ii liability, since the guest is not an insured
2. Subject to the $200 special limit for money
3. Never covered while owned by a non-insured
4. Coverable at the insured's option under Coverage C ✓

Why: Coverage C may, at the insured's option, apply to property of others while on the part of the residence premises occupied by an insured.

The standard mortgage clause in a Homeowners or Dwelling policy protects the mortgagee by:

1. Increasing the Coverage A limit automatically to the outstanding loan balance whenever the mortgagee reports a higher payoff figure
2. Covering the unpaid mortgage balance as a liability of the insured
3. Allowing the mortgagee to collect even if the insured's act voids coverage, and requiring notice of cancellation ✓
4. Eliminating the deductible on losses paid to the lender

Why: The standard (union) mortgage clause preserves the mortgagee's right to recover despite acts of the insured and entitles the lender to advance notice of cancellation or nonrenewal.

An employer carries a valid workers' compensation policy. An employee injured on the job attempts to sue the employer in negligence for the same injury. The suit will most likely be:

1. Barred by the exclusive-remedy provision of §11 ✓
2. Transferred to federal court
3. Allowed, because negligence was alleged
4. Allowed if damages exceed statutory benefits

Why: Because the employer secured compensation, §11 makes workers' compensation the employee's exclusive remedy, barring the tort suit against the employer (absent a statutory exception).

Section 2606 prohibits an entity under the superintendent's supervision from discriminating as to premiums or rates because of which of the following sets of characteristics?

1. Age, occupation, or hobby
2. Marital status, sex, or gender identity
3. Credit score, driving record, or claims history
4. Race, color, creed, national origin, or disability ✓

Why: Section 2606(a) prohibits distinctions or discrimination as to premiums or rates because of race, color, creed, national origin, or disability.

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

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

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

For an occupational disease claim under §28, the two-year filing period generally runs from:

1. The anniversary of the claimant's date of hire with the employer where the hazardous exposure took place
2. Disablement and the time the claimant knew or should have known the disease was work-related ✓
3. The date on which the employer first secured workers' compensation coverage for the exposed workforce
4. The first day of employment in the occupation that produced the exposure, whenever symptoms may appear

Why: Section 28 provides that an occupational disease claim is not barred by the general two-year rule if filed within two years after disablement and after the claimant knew or should have known the disease was due to the nature of the employment.

Which is a permissible ground to cancel an auto policy AFTER the 60-day underwriting period under §3425(c)(1)?

1. The named insured has been involved in two at-fault accidents during the preceding thirty-six months
2. Suspension or revocation of the driver's license of the named insured or a customary operator ✓
3. The insured's credit-based insurance score has fallen below the insurer's underwriting guideline
4. The insured has moved to a higher-rated territory within the state

Why: §3425(c)(1)(B) permits mid-term cancellation for suspension or revocation of the driver's license of the named insured or any other customary operator during the required policy period.

Under a BOP, a small office building owner wants liability coverage for slip-and-fall injuries to visitors. This is provided by:

1. Section iii conditions
2. Section I property
3. Section ii liability ✓
4. An inland marine floater

Why: Bodily injury to third parties on the premises is covered under Section II (Liability) of the BOP, similar to commercial general liability.

A building with exterior walls, floors, and roof made of combustible wood materials is classified as:

1. Fire-resistive construction
2. Frame construction ✓
3. Joisted masonry
4. Modified fire-resistive

Why: Frame construction has combustible exterior walls (typically wood), giving it the highest fire-rate classification and risk.

After a loss, within how many days must the insured render a signed and sworn proof of loss to the insurer under the standard fire policy (unless the time is extended in writing)?

1. 45 days
2. 91 days
3. 60 days ✓
4. 30 days

Why: 'Requirements in case loss occurs' requires the insured to render a proof of loss within sixty days after the loss, unless extended in writing by the company.

Under New York's compulsory financial security limits, what is the minimum coverage for bodily injury to two or more persons in one accident?

1. $100,000
2. $25,000
3. $50,000 ✓
4. $300,000

Why: VTL §311(4)(a) sets a limit of fifty thousand dollars because of bodily injury to two or more persons in any one accident.

A producer who exceeds the actual authority granted by the insurer but acts within the authority the public reasonably believes the producer has may still bind the insurer because of:

1. Express authority
2. Subrogation
3. Apparent authority ✓
4. The law of large numbers

Why: Apparent authority can bind the insurer when a third party reasonably relies on the appearance of authority the insurer permitted to exist.

The New York State Insurance Fund (NYSIF), as one of the §50 securing options, is:

1. A guaranty fund that pays compensation claims only after an authorized carrier becomes insolvent
2. A federal reinsurance pool that takes the catastrophe layer of state workers' compensation risks
3. A state-operated workers' compensation insurance carrier available to New York employers ✓
4. A private stock insurance company whose shares are owned by the employers that buy its policies

Why: Section 50(1) allows an employer to insure with the state fund. NYSIF is a state-operated competitive insurer offering workers' compensation coverage as one of the three statutory methods of securing compensation.

Which of the following is a ground for the superintendent to revoke or suspend a producer's license under § 2110?

1. Failing to advertise the financial condition of every appointing insurer
2. Earning more than twenty-five thousand dollars in commissions in a single year
3. Maintaining an office in more than one county of the state
4. Having been convicted of a felony ✓

Why: Section 2110(a)(7) lists conviction of a felony as a ground for revocation or suspension.