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The free sample gives you about 20 questions per module. The full bank contains every question — general insurance plus state law — with written, statute-cited explanations. $49, one time, lifetime access on up to 3 devices — every state and line we add later included.
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Oklahoma issues a combined Property & Casualty producer licence and PSI administers the exam: 150 scored questions plus 5 unscored pretest items, 150 minutes, 70% to pass. The Oklahoma section is 38 of the 150, in four counted parts - 7 licensing, 16 on insurance statutes, rules and regulations, 10 on Oklahoma automobile insurance law and 5 on Oklahoma workers' compensation. This bank covers the first three plus the national property & casualty content; Oklahoma's five state workers' compensation questions do not yet have a dedicated Oklahoma module, and the national workers' compensation module covers the general principles rather than Oklahoma's own scheme.
You need 70%. Revise each module to that level in Revision Mode, then run the full exam simulation in Exam Mode before your test date.
No vendor publishes the live exam. Every question here is original, written to the official content outline and grounded in public-domain sources — including the Oklahoma Insurance Code, Title 36 of the Oklahoma Statutes for the state-law questions, with the statute section cited in each explanation.
The full Oklahoma bank contains 1009 questions (general insurance plus Oklahoma law), with written, source-cited explanations. The free sample gives you about 20 questions per module.
$49, one time, for lifetime access — and it includes every state and line we add later, at no extra charge. No subscription.
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It is organised into 18 modules that follow the exam's own content areas: P&C — General Insurance Concepts, P&C — Insurance Basics, P&C — Dwelling & Homeowners, P&C — Personal & Commercial Auto, P&C — Commercial Property, BOP & Marine, P&C — Commercial General Liability & Specialty, P&C — Workers' Compensation, P&C — Other Lines, Flood & Federal Regulation, Oklahoma — Insurance Department & Commissioner, Oklahoma — Producer Licensing, Oklahoma — Unfair Methods of Competition & Deceptive Acts, Oklahoma — Unfair Claims Settlement Practices, Oklahoma — Casualty Insurance Contracts & Auto, Oklahoma — Uninsured Motorist Coverage & Written Rejection, Oklahoma — Standard Fire Policy & Property Coverage, Oklahoma — Kinds of Insurance Defined, Oklahoma — Rate Regulation & Surplus Lines and Oklahoma — Property & Casualty Guaranty Association. Each module is drilled and scored separately, so you can see exactly which areas are exam-ready and which still need work.
Last updated 14 September 2026. The bank is revised whenever the source material it cites changes, and every question carries the source its explanation is drawn from.
A selection of free questions with answers and explanations. Use the interactive modules above for timed, scored drills.
An Oklahoma rental car company sells insurance in connection with and incidental to its rentals under a car rental limited lines licence. Section 1435.20 permits that only where the coverage satisfies three conditions and is limited to named kinds of insurance. Two of the conditions are that it is nontransferable and that it is offered in connection with a rental for a period of two years or less. The third is that it:
Why: 36 O.S. § 1435.20(A)(3) ties the coverage to the VEHICLE in the agreement, which is what keeps a limited lines licence from becoming a general motor licence. Preselection is expressly permitted rather than forbidden - the paragraph covers insurance offered 'whether at the rental office or by preselection of coverage in master, corporate, group or individual agreements'. The permitted kinds are also closed and are worth holding as a list: personal accident insurance for renters and other occupants, liability insurance for renters and other authorised drivers arising from operation or use of the rental car, personal effects insurance for loss of or damage to personal effects in the car, roadside assistance and emergency sickness protection, and any other coverage the Commissioner designates. The licence issued to the rental or leasing company authorises any employee or authorised representative to sell or offer the coverage at each location at which it operates, and those employees need not be individually licensed.
Under TRIA, federal sharing of terrorism losses is triggered only for a 'certified act of terrorism,' which is certified by:
Why: A terrorism event must be certified by the Secretary of the Treasury, in consultation with designated officials, before TRIA's loss-sharing applies.
Saying that a property insurance contract is personal means that it:
Why: A personal contract insures the individual against loss, not the property; it cannot be assigned to another party without the insurer's consent.
The 'collapse' coverage is provided under which dwelling/homeowners forms?
Why: Collapse is an additional coverage in the broad and special forms (such as DP-2, DP-3, HO-2, HO-3) but is not provided under the most basic DP-1.
A neighbor is injured by the insured's dog and incurs medical bills. Even though no lawsuit is filed and fault is unclear, payment may be available under:
Why: Coverage F pays reasonable medical expenses for injured third parties on a no-fault, goodwill basis without requiring a finding of legal liability.
The principle that allows insurers to predict losses more accurately as the number of similar exposure units increases is the:
Why: The law of large numbers states that the larger the number of similar exposures, the more predictable actual loss experience becomes.
Cyber/Network security liability insurance is designed primarily to address:
Why: Cyber policies cover first- and third-party costs from data breaches, privacy claims, and network security incidents.
The Oklahoma Legislature enacts a measure relating to a benefit plan. Section 124 states when that measure takes effect for existing plans. It provides that the measure shall be incorporated into any benefit plan that is:
Why: 36 O.S. § 124 is one sentence added in 2022 and it supplies a DEFAULT rule of transition, so that each new benefit-plan measure need not carry its own. RENEWAL is the operative event alongside issue, which is what brings existing plans within a new measure without disturbing a policy year already running. The default yields to anything the enacting measure says for itself - 'unless specifically provided for otherwise' - so a measure with its own transitional provision governs. Compare § 114, which does the opposite job for repeals rather than enactments.
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?
Why: Coverage A insures bodily injury and property damage liability. Coverage B is personal and advertising injury; Coverage C is medical payments.
An Oklahoma claimant has a covered claim against the Association and also has coverage for the same loss under another policy. Section 2012 requires him to exhaust all coverage provided by another policy arising from the same facts, injury or loss, whether or not that other policy was written by a member insurer. Two policies are exempt from that requirement, namely:
Why: 36 O.S. § 2012(A)(1) exempts the two policies exhaustion could not sensibly reach: the INSOLVENT INSURER'S OWN policy, which is the whole reason the claim is with the Association, and any LIFE INSURANCE policy, whose proceeds are not an indemnity for the loss at all. Everything else must be exhausted, expressly INCLUDING policies written by non-member insurers. Paragraph 2 then does the arithmetic, and it is severe: the covered claim is reduced by the FULL APPLICABLE LIMITS stated in the other policy, and the Association takes a FULL CREDIT FOR THE STATED LIMITS whether or not the claimant recovered them - unless the claimant demonstrates that he used REASONABLE EFFORTS to exhaust the other coverage, in which case the credit is for the total recovery instead. So a claimant who settles cheaply with another insurer bears the difference himself.
Section 1250.7 sets an outer limit on the time for investigating a property and casualty claim, subject to one exception and to the catastrophe extension. That limit, and the exception, are:
Why: 36 O.S. § 1250.7(C)'s hundred and twenty days is a ceiling on the whole investigation, and the exception is drawn tightly: possible FRAUD OR ARSON, and only where supported by specific information giving a reasonable basis for the investigation. No approval by the Commissioner is required, but the same evidential discipline applies as under subsection (A)'s fraud relief - the file must be able to justify the position. Note that the period runs from receipt of PROOF OF LOSS rather than from notification of the claim, so an insurer that receives late proofs gets its full period. Two things stop the clock or move it: subsection (G), under which the section's time limits do not apply at all if a lawsuit on the claim is initiated, and the Governor-declared catastrophe extension of twenty days.
An Oklahoma bank insures its securities and jewellery holdings against loss from any cause, including while they are moved between branches. Section 708's third paragraph covers such insurance for banks, bankers, brokers and financial or moneyed corporations, including loss while the property is being transported in armoured motor vehicles or by messenger. As to other movement of the property, the paragraph:
Why: 36 O.S. § 708(3) is the bankers' blanket bond, and its transit limb is deliberately narrow: armoured motor vehicles or a messenger, BUT NOT INCLUDING ANY OTHER RISKS OF TRANSPORTATION OR NAVIGATION. Ordinary shipment therefore falls to marine insurance under § 705, which covers precious stones, jewelry, gold and silver whether in course of transportation or otherwise - so the two articles between them leave no gap, and the boundary is drawn by HOW the property moves. The paragraph is otherwise very wide: loss RESULTING FROM ANY CAUSE of bills of exchange, notes, bonds, securities, evidences of debt, deeds, mortgages, warehouse receipts and other valuable papers, money, precious metals and articles made from them, jewelry, watches, necklaces, bracelets, gems and precious and semiprecious stones. It also reaches damage to the insured's own PREMISES, furnishings, fixtures, equipment, safes and vaults by burglary, robbery, theft, vandalism or malicious mischief.
Coverage E (Personal Liability) typically does NOT cover:
Why: Business pursuits are generally excluded from Coverage E unless a business pursuits endorsement is added; ordinary personal liability situations are covered.
The statutory uninsured motorist offer form in section 3636 offers a minimum limits option, and the section elsewhere required insurers to move existing policyholders below that figure up to it on the first renewal on or after 1 April 2005. Those minimum limits are:
Why: 36 O.S. § 3636 states twenty-five thousand and fifty thousand dollars in two places doing different jobs - as the minimum limits option in the subsection (H) form, and in subsection (K)'s transitional provision. That provision required an insurer, on the first renewal on or after 1 April 2005, to raise existing policyholders who had selected LOWER limits to those figures, charge the corresponding premium, and give notice of the change stating how the policyholder might instead reject the coverage or select higher limits. NO NOTICE WAS REQUIRED to policyholders who had rejected the coverage altogether or who already held limits equal to or greater than those figures. The subsection defines an existing policyholder as one who bought before 1 April 2005 on a policy renewing on or after that date.
Section 1202 defines three terms for the unfair trade practices article. Besides 'person' and 'Commissioner' it defines 'Name', and that definition is:
Why: 36 O.S. § 1202(3) is a Lloyd's provision, and it exists because paragraph 1's definition of 'person' expressly lists a 'Lloyd's insurer', a 'Lloyd's Name' and a 'Lloyd's Syndicate Name' among the entities the article reaches - so the article bites on the individual underwriter as well as on the syndicate and the market. That matters chiefly to property and casualty and surplus lines business, where Lloyd's capacity is commonly used. The distractors are drawn from real provisions elsewhere: 'actual or trade name' is the phrase in § 1204(13)(c), the misrepresenting policy title is § 1204(1), and the producer's assumed name is § 1435.11 in the Producer Licensing Act.
Section 2007 states how the Association's obligation on a covered claim is satisfied, and the amount differs with the kind of claim. Leaving aside cybersecurity claims, the three amounts are:
Why: 36 O.S. § 2007(A)(1)(a) to (c) uses three different measures and the UNITS matter as much as the figures, which is what the fourth option tests: unearned premium is capped PER POLICY, everything else PER CLAIMANT, and workers' compensation is not capped at all. The uncapped workers' compensation obligation is the figure candidates least expect and it follows from the nature of the benefit - a statutory entitlement to indemnity and medical care that cannot sensibly be cut off at a number. Two outer limits sit above all three: the Association is never obliged to pay more than the insolvent insurer's own obligation under the policy, nor more than the limits of the Association's obligation EXISTING ON THE DATE THE ORDER OF LIQUIDATION IS FILED. Do not merge these with the life and health guaranty association's limits in § 2025(C)(2) of a different act.
Because insurance contracts are drafted by the insurer and the insured must accept them as written, they are characterized as contracts of:
Why: A contract of adhesion is prepared by one party, the insurer, and offered on a take-it-or-leave-it basis; ambiguities are construed against the drafter.
Section 1106 requires a surplus lines insurer to have capital and surplus, or its equivalent under the laws of its domiciliary jurisdiction, equal to the greater of this state's minimum capital and surplus requirements for nonadmitted insurers or a stated figure. The Commissioner may accept less on an affirmative finding of acceptability, but not below a second figure. Those two figures are:
Why: 36 O.S. § 1106(1)(a) and (b) state the two figures as one rule, which is why they are keyed as one item: fifteen million as the ordinary requirement, expressed as the GREATER of that and this state's own minimum for nonadmitted insurers, and four million five hundred thousand as the point below which the Commissioner may make no affirmative finding of acceptability however good the case. The finding, where it is available, must be based on stated factors - QUALITY OF MANAGEMENT, capital and surplus of any PARENT COMPANY, company underwriting profit and investment income TRENDS, MARKET AVAILABILITY, and company RECORD AND REPUTATION within the industry - so it is a judgment about the whole enterprise rather than about the balance sheet alone. § 1112 then makes compliance with this section the test of whether a surplus lines insurer is financially sound.
The insuring agreement of the Oklahoma standard fire insurance policy states the perils it covers. Besides direct loss by fire and by lightning, it covers direct loss by:
Why: The form in 36 O.S. § 4803(G) covers 'all DIRECT LOSS BY FIRE, LIGHTNING AND BY REMOVAL FROM PREMISES ENDANGERED BY THE PERILS INSURED AGAINST' - three heads, and the third is a genuine coverage rather than a definition: property damaged while being moved out of the way of an approaching fire is covered although the fire never reaches it. Explosion, riot and smoke are not covered heads; explosion and riot appear instead among the SUSPENDING CONDITIONS, where loss occurring as a result of explosion or riot is excluded unless fire ensues, and in that event for the fire loss only. The insuring agreement also states its own duration convention - from noon (Standard Time) to noon (Standard Time) - although § 4803.1 now fixes expiration at 12:01 a.m. Standard Time.
In a Homeowners policy, Coverage D (Loss of Use) provides which of the following?
Why: Coverage D — Loss of Use pays additional living expenses while the home is uninhabitable and any lost fair rental value if part of the home was rented.
Section 123 governs the delivery and storage of electronic documents in insurance transactions. It defines 'delivered by electronic means' to include delivery to an electronic mail address at which a party has consented to receive notices, and also:
Why: 36 O.S. § 123(A)(1)(b) allows posting only WITH separate notice of it, and prescribes how that notice travels: by electronic mail to the address at which the party has consented to receive notice, or by any other delivery method the party has consented to. Consent runs through the whole definition - subparagraph (a)'s email address is one 'at which a party has CONSENTED to receive notices or documents'. The section's other definitions widen its reach considerably: 'party' means any recipient of a notice or document required as part of an insurance transaction, expressly including an applicant, an insured, a policyholder, a covered person or an annuity contract holder.
A peril is best described as:
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.
A crew member (seaman) injured aboard a vessel in navigation would most likely pursue a claim under which law?
Why: The Jones Act protects seamen (crew members of vessels in navigation), allowing them to sue their employer for injuries caused by negligence, borrowing FELA's fault-based framework.
The Protective Safeguards endorsement on a BOP or commercial property policy generally:
Why: Protective Safeguards conditions coverage on the insured maintaining specified systems such as automatic sprinklers or alarms; failure to maintain them can suspend coverage.
The primary purpose of the 30-day NFIP waiting period is to:
Why: The waiting period reduces adverse selection by preventing purchase of coverage immediately before a known or imminent flood.
Section 943 states what the Insurance Commissioner may do to a carrier that violates its prohibition on using traffic charges that did not result in a conviction. After notice and hearing the Commissioner may:
Why: 36 O.S. § 943(B) gives the Commissioner a graded response - the certificate of authority at one end, censure at the other, and a fine either alone or alongside - so a first or technical breach need not attract the maximum. NOTICE AND HEARING are required before any of them, which distinguishes this from provisions elsewhere in the Code that allow immediate action. Note what the subsection does NOT provide: no power to order restitution to the insured, which is what the fourth option offers, and no fixed maximum fine - the amount is left at large in the section itself. Sections 941, 942 and 944 carry no sanction provision of their own, so a violation of those is dealt with under the Code's general enforcement powers.
An Oklahoma surplus lines licensee fails to remit the surplus line tax, and separately a business that procured surplus lines coverage without going through a licensee fails to remit it too. Section 1116 fixes a civil penalty for each. Those penalties are:
Why: 36 O.S. § 1116 uses twenty-five dollars twice and the two penalties are quite differently shaped: the licensee's runs PER DAY AND PER POLICY, which compounds quickly across a book, while the direct procurer's is a monthly percentage with the twenty-five dollars as a FLOOR - 'whichever shall be the greater'. In both cases the Commissioner collects the tax BY DISTRAINT and recovers the penalty by an action in the name of the State of Oklahoma, and may request the Attorney General to appear in the name of the state by relation of the Commissioner. The tax itself is in § 1115: where Oklahoma is the home state of the insured and the insurance covers risks in and out of the state, the sum payable is SIX PERCENT of the TOTAL GROSS PREMIUMS wherever the risks are located, and the licensee is PROHIBITED FROM REBATING ANY PART OF THE TAX for any reason.
Under the PAP, an insured loses control on ice and slides into a tree. This loss is covered under:
Why: Striking a tree as the result of losing control is a collision loss, since collision includes upset or impact with an object.
Which statement about how coverage parts combine in a CPP is correct?
Why: In a package, two or more coverage parts attach to common declarations and common conditions; a single coverage part written alone is monoline.
In a monopolistic state fund jurisdiction, employers must generally obtain workers' compensation coverage from:
Why: In monopolistic fund states, the state fund is the sole source of WC coverage and private insurers may not write it; employers must buy from the state fund.
Section 3639 defines both 'cancellation' and 'nonrenewal' for its own purposes, and the two definitions turn on the same date. They are that cancellation means termination of a policy:
Why: 36 O.S. § 3639(B)(3) and (5) divide the whole field by reference to the EXPIRATION DATE and nothing else - not by who acts and not by the reason - so a termination one day early is a cancellation with the ten days' notice and eight-ground restriction that go with it, and a termination on the day is a nonrenewal with its forty-five days' notice. The definition of 'expiration date' in paragraph 4 is what makes that workable for long policies: it means the date coverage ends and ALSO, for a policy written for a term longer than one year or with no fixed expiration date, EACH ANNUAL ANNIVERSARY DATE. So a three-year policy has three expiration dates for this section's purposes. Paragraph 1 defines renewal to include the issuance of a succeeding policy by the same insurer OR AN INSURER WITHIN THE SAME GROUP, and paragraph 2 defines nonpayment of premium to reach payments due indirectly under a premium finance plan or extension of credit.
Section 3621 states how every insurance contract is to be construed. It requires construction according to the entirety of the terms and conditions set forth in the policy and as amplified, extended or modified by:
Why: 36 O.S. § 3621 uses the same two-part test as § 3602's definition of 'policy' - ATTACHED TO and MADE A PART OF - so the application is capable of forming part of the contract but does not do so automatically, which is why the second and fourth options are each wrong at one end. The practical consequence is that an insurer wanting to rely on the application's answers as terms must attach it, and § 3608 supplies the evidential counterpart: in life insurance the application is inadmissible unless a true copy was attached to or made part of the policy when issued. 'Entirety of its terms and conditions' also forecloses reading a single clause in isolation, so an exclusion is construed against the whole rather than as a free-standing prohibition.
Coverage C under the Dwelling Policy insures:
Why: Coverage C — Personal Property covers the household contents and personal belongings of the insured. The Dwelling Policy contains no liability coverage by default.
The Association is defending an insured of an insolvent Oklahoma insurer under a liability policy. Section 2007 states when that obligation to defend comes to an end. It ceases upon the payment or tender by the Association of an amount equal to:
Why: 36 O.S. § 2007(A)(2) ends the defence at THE LESSER of the two ceilings, which follows from the Association never owing more than either - it cannot be required to keep defending after it has paid or tendered everything it could ever owe on the claim. Note that a TENDER suffices, so the Association need not wait for acceptance. Paragraph 5 gives it the corresponding control while the defence continues: it may investigate, adjust, compromise, settle and pay covered claims to the extent of its obligation and DENY ALL OTHER CLAIMS, it may pay claims in any order it deems reasonable, and it has THE RIGHT TO SELECT AND DIRECT LEGAL COUNSEL under liability insurance policies for the defence of covered claims.
An Oklahoma lender financing a residential mortgage requires the borrower to insure the dwelling for the full amount of the loan, which exceeds the replacement value of the dwelling and its contents. Section 3639.3 addresses that requirement. Under it the lender:
Why: 36 O.S. § 3639.3(A) makes REPLACEMENT VALUE the ceiling and says so 'regardless of the amount of the mortgage or other financing arrangement', which is the answer to the lender's instinctive argument that its security is the debt. It reaches homeowner, mobile or manufactured home, dwelling fire and other residential property coverage, so mobile homes are within the section rather than being its whole subject. Two definitional points keep the ceiling honest in the lender's favour and in the borrower's: 'replacement value' does NOT include cleanup costs or the value of outbuildings where their limits are separate from the dwelling limits, and by subsection (B) a lender MAY NOT INCLUDE THE FAIR MARKET VALUE OF THE LAND. Subsection (C) lets the lender accept the insurer's determination of value or use its own appraisal of the real property. 'Lender' and 'borrower' are both defined broadly in subsection (D), the former reaching loan agents, servicing agents and mortgage brokers.
An Oklahoma insured believes his insurer has misapplied its rating system to his policy and asks in writing for it to be revised. Section 904 requires every advisory organization and every insurer that makes its own rates to provide reasonable means within the state whereby such a person may be heard. It then fixes two periods, and they are that:
Why: 36 O.S. § 904(C) uses thirty days twice and the first is a DEEMED REJECTION rather than a deadline for deciding - silence gives the applicant the same position as a refusal, so an organization cannot defeat the right by not answering. The appeal is available to ANY PARTY AFFECTED by the action, not only the applicant, and runs from WRITTEN NOTICE of the action. The Commissioner must give NOT LESS THAN TEN DAYS' WRITTEN NOTICE of the hearing to the appellant and to the advisory organization or insurer, and may then MODIFY, AFFIRM OR REVERSE. The right this machinery protects is about the APPLICATION of a rating system to a particular insured rather than about the rate itself, which is challenged by different means.
An Oklahoma property and casualty insurer holds specific information, available for review by the Insurance Commissioner, giving a reasonable basis to believe a first party claimant fraudulently caused the loss. Under section 1250.7 the insurer is then:
Why: 36 O.S. § 1250.7(A) suspends the duty rather than extending it, and it does so on the insurer's own assessment - no prior notification to or approval by the Commissioner is required. But the relief is conditional in a way that keeps it honest: the basis must be REASONABLE, it must be SUPPORTED BY SPECIFIC INFORMATION, and that information must be AVAILABLE FOR REVIEW BY THE COMMISSIONER, so the insurer's file has to be able to justify the position after the event. The provision reaches a claimant who fraudulently CAUSED OR CONTRIBUTED TO the loss. Subsection (C) carries a parallel exception for the investigation clock, framed as possible fraud OR ARSON supported by specific information giving a reasonable basis for the investigation.
A commercial umbrella policy provides which three basic functions?
Why: Umbrellas provide excess limits over underlying policies, broader coverage that drops down for certain gaps, and coverage for losses not covered by underlying subject to a self-insured retention.
A cybersecurity insurance policy issued by an insolvent Oklahoma insurer produces numerous first-party and third-party claims from a single ransomware incident. Section 2007 caps what the Association must pay on such a policy. That cap is:
Why: 36 O.S. § 2007(A)(1)(d) is aggregated DIFFERENTLY FROM EVERY OTHER CAP IN THE ACT, and that is the whole item: three hundred thousand dollars for the whole event, first-party and third-party together, however many claims and however many claimants - where subparagraph (c)'s one hundred fifty thousand is per claimant and subparagraph (b)'s ten thousand is per policy. The reason is the nature of a cyber loss, where one intrusion can generate thousands of claimants and a per-claimant cap would be no cap at all. The subparagraph is drafted to catch the policy however it is described: it applies to a policy OR ENDORSEMENT 'providing, or that is found to provide, cybersecurity insurance coverage', so a court's later characterisation brings it in. Subparagraph (c) excludes cybersecurity claims expressly so the two do not overlap.
An Oklahoma surety is asked to guarantee the honesty of a court-appointed receiver, who is nobody's employee. Section 708 brings fidelity insurance within surety insurance and defines it as insurance guaranteeing:
Why: 36 O.S. § 708(1) is defined by the POSITION rather than by the relationship, and it names both kinds - PUBLIC OR PRIVATE trust - so a public official's bond and a commercial employee dishonesty cover are the same kind of insurance under this article. There is no requirement of employment, which the second option supplies: a trustee, a receiver and an administrator are all within it. Paragraph 2 is the neighbouring and quite different head - guaranteeing the performance of CONTRACTS, other than insurance policies, and guaranteeing and executing bonds, undertakings and contracts of suretyship - and the exclusion of insurance policies from it is what keeps a surety from guaranteeing an insurer's own promises. Note that fidelity is also the quality named in § 1435.20(A)(5)'s limited lines surety category, which reaches 'faithlessness in a position of public or private trust'.
An Oklahoma insurance producer chooses to use a facsimile signature stamp in his business, and a document relating to an insurance transaction is signed with it. Under section 1435.27 the stamp:
Why: 36 O.S. § 1435.27 is one sentence long and it does something quite strong: the producer's own choice to use the stamp is itself the proof of authority for anything signed with it, with no filing, registration or specimen required and no limitation on who may rely on it. Read practically, the risk of a stamp used by someone in the office without permission falls on the producer who adopted it. Nothing in the section makes the stamp compulsory or displaces a manuscript signature - it addresses only the evidential effect of a stamp the producer has chosen to use.
A primary reason an organization purchases an umbrella in addition to its CGL, auto, and employers liability is to:
Why: Umbrellas provide a consolidated high limit of catastrophic excess protection over multiple underlying liability policies.
An Oklahoma claimant recovers the liability limits from an insured tort-feasor and then claims under her own uninsured motorist coverage for the balance of her damages. Her insurer contends that the amount already recovered should be deducted from her uninsured motorist limits. Under section 3636:
Why: 36 O.S. § 3636(F)'s second proviso makes uninsured motorist coverage additive rather than a top-up: the insured recovers the tort-feasor's limits AND has the full amount of her own uninsured motorist limits available for the balance of her damages. That is the answer to the setoff argument the second option states, which is how many policies would otherwise be written and how several other states approach underinsurance. The proviso is what gives the underinsured limb of subsection (C) real content - if the tort-feasor's payment were credited, an insured whose limits matched the tort-feasor's would recover nothing extra. Her damages must of course still be proved: the coverage responds only so far as she is LEGALLY ENTITLED TO RECOVER.
A key feature of a risk retention group under federal law is that it:
Why: The federal Liability Risk Retention Act allows an RRG chartered and licensed in one state to do business in other states without obtaining a full license in each.
Persons with a financial interest in an Oklahoma insurer believe it to be in an unsound condition and want the Department to examine it. Under section 309.2 the Commissioner may make an examination on their request, provided they:
Why: 36 O.S. § 309.2(A) requires an AFFIDAVIT with specified reasons from one or more persons PECUNIARILY INTERESTED - so a sworn and particularised complaint, and nothing about numbers, money on account or the insurer's consent. The power sits at the end of a subsection otherwise concerned with the Commissioner's own timetable, and it is discretionary: he MAY make the examination. Subsection (B) lets him adopt rules setting out the factors that may lead him to examine a domestic insurer BEFORE the ordinary interval expires, so an insurer's own conduct can bring an examination forward independently of any request.
An Oklahoma insured and his fire insurer cannot agree on the actual cash value of the loss, and one of them demands an appraisal. Under the appraisal clause of the standard form each party selects a competent and disinterested appraiser and notifies the other of the selection, and the appraisers select an umpire. The two periods the clause fixes are:
Why: The appraisal clause in 36 O.S. § 4803(G) is triggered by the WRITTEN DEMAND of either party and is available where the parties fail to agree as to the ACTUAL CASH VALUE OR THE AMOUNT OF LOSS - a valuation dispute, not a coverage dispute. Where the appraisers fail for fifteen days to agree on an umpire, either party may request that a JUDGE OF A DISTRICT COURT in the county where the loss occurred select one, after notice of hearing to the non-requesting party BY CERTIFIED MAIL. The appraisers then appraise the loss STATING SEPARATELY actual cash value and loss to each item, and submit only their DIFFERENCES to the umpire; an award in writing, so itemised, of any two of the three, when filed with the company, determines the amount.
An officer of an Oklahoma insurer deliberately leaves a material fact about the insurer's business out of one of its books, intending that an examiner appointed to look into its affairs should not learn of it. Under section 1204's false financial statements paragraph the omission is:
Why: 36 O.S. § 1204(5)'s second limb closes the obvious gap: after prohibiting a false entry made with intent to deceive, it adds 'or, with like intent, willfully omitting to make a true entry of any material fact pertaining to the business of such insurer'. 'Like intent' carries the deceptive intent across from the false-entry limb, and 'wilfully' is the omission's own qualifier. The audiences are named and are wider than 'examiner': an agent OR examiner lawfully appointed to examine into the insurer's condition or any of its affairs, and any public official to whom the insurer is required by law to report or who has authority by law to examine it. The paragraph's FIRST limb - a false statement of financial condition, with no named audience - is a distinct offence and is keyed separately.
A civilian working for a U.S. defense contractor on a military base overseas is injured. Which act most likely provides workers' compensation coverage?
Why: The Defense Base Act extends LHWCA-style workers' compensation benefits to civilian employees of U.S. government contractors working on overseas military bases and similar locations.
The primary purpose of a coinsurance clause in property insurance is to:
Why: Coinsurance encourages insureds to insure to value (e.g., 80%, 90%, or 100%) by penalizing underinsurance at the time of a loss.
An Oklahoma insurer submits a rate filing and the Insurance Commissioner finds it incomplete. Section 901.3 lists what a complete filing must contain: a memorandum summarising its gist, an index, a clear and concise statement of the action desired, references to the sections of law and rules authorising or supporting it, an explanation of the application of the filing factors with assumptions and conclusions, references to supporting exhibits, and any other information the Commissioner requires. Where a filing is incomplete the Commissioner:
Why: 36 O.S. § 901.3(C) requires WRITTEN NOTICE OF WHAT IS MISSING rather than a rejection, and it fixes no period for supplying it - which the fourth option adds. The materials may be required by the article, by the Commissioner's rules or by his orders, so a filer cannot answer that the statute did not name the document. Paragraph 5 of subsection (A) is the one that carries most of the work: an explanation of the application of THE FILING FACTORS, which are those in § 902.2(A) or in § 985(B) of the Property and Casualty Competitive Loss Cost Rating Act, together with the filer's assumptions and conclusions. Subsection (B) relieves an advisory organization or joint underwriting association from filing member by member: summary form for all its members and subscribers is sufficient.
Injuries to civilian federal government employees (such as a postal or federal agency worker) are covered under:
Why: FECA provides workers' compensation benefits to civilian employees of the federal government for job-related injuries and illnesses.
Section 1109 provides that insurance contracts procured as surplus line coverage in accordance with the article are fully valid and enforceable as to all parties and are given recognition to the same effect as like contracts issued by admitted insurers. It then requires such contracts to carry a notification, stamped by the licensee, broker or insurer on the declaration page in bold-face type, that the contracts:
Why: 36 O.S. § 1109(B) singles out the one consequence of buying from a nonadmitted market that an insured could not discover for himself and could not fix afterwards - THE ABSENCE OF GUARANTY ASSOCIATION PROTECTION - and requires it in BOLD-FACE TYPE on the DECLARATION PAGE, where it will be seen. No waiver is required or contemplated, which the fourth option adds. The Commissioner is authorised to promulgate rules establishing FURTHER disclosure requirements for the purpose of protecting consumers of surplus line coverage, so the statutory notice is a floor. Subsection (A)'s validity rule matters as much: a properly procured surplus lines contract is not a second-class contract, and § 1102 adds that a contract effectuated in VIOLATION of the Code is voidable EXCEPT AT THE INSTANCE OF THE INSURED - so the insured may enforce it and the insurer may not escape it.
Under a Homeowners HO-4 (renters) policy, the Coverage A (Dwelling) limit is typically:
Why: Because tenants do not own the structure, HO-4 has no meaningful Coverage A; the emphasis is on Coverage C personal property and Section II liability.
Where no comparable motor vehicle is available in the local market area, section 1250.8 allows an insurer to establish the cost of a comparable vehicle by dealer quotation. As to how many quotations and how many dealers, the subparagraph requires:
Why: 36 O.S. § 1250.8(A)(2)(b) carries two separate 'two or more' requirements and they qualify different things - the number of QUOTATIONS and the number of DEALERS - so a pair of quotes from one dealer will not do. What the insurer may then use is 'ONE OF' those quotations, not their average, which is the point the fourth option tests: the statute lets the insurer choose among the quotes it obtained rather than requiring an arithmetic mean. The dealers must be QUALIFIED and must be located WITHIN the local market area, even though the subparagraph applies precisely because no comparable vehicle is available there. The remaining alternative is subparagraph (c): the cost as quoted in the latest edition of the NADA Official Used Car Guide or the monthly edition of any other nationally recognised published guidebook.
An Oklahoma insurer indemnifies the producer of a televised sporting event against loss if the event is cancelled because a principal participant falls ill. Section 707 names the kind of insurance this is, and defines it as indemnifying the producer of a motion picture, television, radio, theatrical, sport, spectacle, entertainment or similar production, event or exhibition against loss from interruption, postponement or cancellation due to:
Why: 36 O.S. § 707(10), entertainments insurance, is confined to a HUMAN cause - death, accidental injury or SICKNESS - and to a defined class of people: performers, participants, directors or other principals. So a cancellation for weather, for a venue failure or for want of an audience is outside the paragraph, which is what the second option tests, and so is the illness of someone outside the named class. The three consequences it answers for are stated in ascending order of severity - INTERRUPTION, POSTPONEMENT OR CANCELLATION - so a delayed production is within it as much as an abandoned one. The class of productions is drawn widely enough to be future-proof, closing with 'or similar production, event, or exhibition'.
Which of the following is NOT an element of an ideally insurable risk?
Why: Insurable losses should NOT be catastrophic to the insurer; insurers avoid risks that could cause simultaneous, ruinous losses across the pool.
An Oklahoma insurer writes cover on a road bridge against fire, tornado, sprinkler leakage, hail, explosion, earthquake, riot and civil commotion, and against nothing else. Section 705 brings insurance on bridges, tunnels and other instrumentalities of transportation and communication within marine insurance, excluding buildings, their furniture and furnishings, fixed contents and supplies held in storage. As to this policy the paragraph provides that it is:
Why: 36 O.S. § 705(4) uses its seven-hazard list as a TEST OF WHAT THE POLICY IS, not as an exclusion: a bridge policy is marine insurance unless those hazards are the ONLY hazards covered, in which case it is an ordinary fire and allied lines policy wearing a bridge as its subject. Add one non-listed peril - collision by a vessel, say, or washout - and the paragraph applies again to the whole. THE SAME SEVEN HAZARDS APPEAR IN PARAGRAPH 5 AND DO THE OPPOSITE THING: insurance on piers, wharves, docks and slips is marine insurance EXCLUDING those risks, so there they are carved out however much else the policy covers. The two paragraphs were verified as one group, and the difference is worth learning as the point rather than the detail.
A bookkeeper embezzles $50,000 from her employer over two years. Which form responds?
Why: Employee theft of employer funds is covered by a fidelity bond/employee dishonesty coverage, not the CGL.
The element of negligence requiring an unbroken chain of events linking the act to the injury is called:
Why: Proximate cause is the direct, uninterrupted causal connection between the negligent act and the resulting injury.
Which describes the typical underwriting attitude of a surety toward the principal?
Why: Surety underwriting evaluates the principal's character, capacity, and capital like a credit risk, anticipating no loss because the principal must indemnify the surety.
Section 1250.6 requires every property and casualty insurer to acknowledge receipt of notification of a claim. The period allowed, and the one thing that dispenses with the acknowledgement altogether, are:
Why: 36 O.S. § 1250.6(A) treats PAYMENT as the best acknowledgement there is: an insurer that has paid the claim inside the thirty days need not also acknowledge it. Nothing else in the subsection excuses the acknowledgement - not representation by an attorney, not the size or kind of the claim. The duty is stated for the property and casualty insurer specifically, which is what distinguishes this section from § 1250.4, the general provision that requires any insurer to furnish an adequate response within thirty days after receipt of a written communication from a claimant that reasonably suggests a response is expected. Subsection (B) supplies an alternative route to compliance, and § 1250.7 then takes over once proofs of loss arrive.
Which marine coverage would insure a bank's exposure for valuable customer securities documents lost in a fire on premises?
Why: The Valuable Papers and Records inland marine floater covers the cost to reconstruct or replace important documents and records destroyed by a covered peril.
An Oklahoma insured holds one policy covering three vehicles, each with uninsured motorist coverage, and seeks to add the three limits together after an accident. The policy was renewed in 2019 and says nothing about stacking. Under section 3636 the position is that the policy:
Why: 36 O.S. § 3636(B) reversed the default in 2014: policies ISSUED, RENEWED OR REINSTATED after 1 November 2014 are not subject to stacking or aggregation of limits UNLESS EXPRESSLY PROVIDED FOR BY AN INSURANCE CARRIER. Two features repay attention. The rule attaches to the policy's issue, renewal or reinstatement rather than to the date of the accident, so an old policy renewed after the date falls under the new default. And the exception runs one way only - a carrier may expressly grant stacking, and silence means none - which is the opposite of the position before the amendment and the reason the second option is a trap for anyone relying on older learning.
Under a BOP, a small office building owner wants liability coverage for slip-and-fall injuries to visitors. This is provided by:
Why: Bodily injury to third parties on the premises is covered under Section II (Liability) of the BOP, similar to commercial general liability.
Section 306.1 requires a supervisory agency to make data available to a requesting agency in connection with the supervision of a person over which the requesting agency has DIRECT supervisory authority. The section says an agency has that authority in two situations: where it is specifically provided by statute, and where the agency itself granted something. What it granted is:
Why: 36 O.S. § 306.1(A) offers alternative routes to direct supervisory authority, and the second - having granted the charter, licence, registration or other permission - is what lets state banking, securities and insurance regulators exchange data about entities each licenses separately. The obligation is limited by relevance: the requested data must relate to the person, or an AFFILIATE of the person, over which the requesting agency has direct supervisory authority. Subsection (B) then permits onward sharing with a federal regulatory agency or self-regulatory association having concurrent jurisdiction, on terms - the recipient must RETURN the shared data unless the supervisory agency approves its retention, and 'federal regulatory agency' expressly does NOT include law enforcement agencies.
Section 1206 provides for the hearing that follows a statement of charges under the unfair trade practices article. At the time and place fixed, the person charged has an opportunity to be heard and to show cause why a cease and desist order should not be made. The section then provides that the Commissioner:
Why: 36 O.S. § 1206(B) makes intervention a right once good cause is shown - the verb is SHALL - and it is open to ANY PERSON rather than to a defined class of interested parties. That matters beyond the hearing itself, because § 1210 gives an intervenor a route to court that no one else has: where the Commissioner's final order does NOT charge a violation of the article, an intervenor may within thirty days cause an action for judicial review to be filed in the district court of Oklahoma County, and the court may enjoin the practice notwithstanding the Commissioner's order. So intervening is how a complainant keeps standing after the Commissioner declines to act. Subsection (A)'s duty to issue a statement of charges and a notice under the Administrative Procedures Act is keyed in the sibling bank.
In a competitive state fund jurisdiction, the state fund:
Why: A competitive state fund operates alongside private insurers; employers may buy WC from the state fund or from private carriers.
A stock insurer is owned by its:
Why: A stock insurer is owned by stockholders, who supply capital and receive dividends; policyholders are not owners.
In a liability policy, an 'occurrence' is best described as:
Why: An occurrence is defined as an accident, including continuous or repeated exposure to substantially the same general harmful conditions, broadening coverage beyond a single sudden event.
An Oklahoma named insured is injured while driving a second car that he owns and that is furnished for his regular use, but which he has not insured under any motor vehicle policy. He claims under the uninsured motorist coverage of his other policy. Under section 3636 there is:
Why: 36 O.S. § 3636(E) is the statutory version of the owned-vehicle or 'family car' exclusion, and it exists to stop an insured buying one policy and drawing uninsured motorist protection across a household fleet he has chosen not to insure. Three ownership categories are reached - the NAMED INSURED, a RESIDENT SPOUSE and a RESIDENT RELATIVE - and the vehicle need not be owned by any of them: it is enough that it is FURNISHED OR AVAILABLE FOR THE REGULAR USE of one of them, which brings in an employer's car or a long-term loan. The condition that unlocks the exclusion is the same throughout: the vehicle is NOT INSURED by a motor vehicle insurance policy. Insure it and the exclusion falls away.
Under the PAP, the duty to allow the insurer to inspect and appraise the damaged vehicle before its repair or disposal falls under:
Why: Part E requires the insured to permit the insurer to inspect and appraise the damaged property before repairs or disposal, as part of the post-loss duties.
Section 1204 contains a short interpretation provision governing two words wherever they appear in the section. It provides that the word 'insurance' includes suretyship, and that the word 'policy':
Why: 36 O.S. § 1204(8)(c) is one line long and it extends the whole section to the surety business: every prohibition in the fourteen paragraphs that speaks of insurance or of a policy speaks equally of suretyship and of a bond. So misrepresenting the terms of a bond is within paragraph 1, defaming a surety's financial condition is within paragraph 3, and a rebate on a bond premium is within paragraph 8 - which matters in Oklahoma practice because surety is a limited lines licensing category in its own right under § 1435.20 of the Producer Licensing Act, where it is defined as insurance or a bond covering obligations to pay another's debts or answer for another's default. The provision is placed inside the rebates paragraph but is expressed to apply 'as used in this section'.
A covered property loss totals $8,000 and the policy carries a $1,000 deductible. The insurer pays:
Why: The insurer pays the loss minus the deductible: $8,000 − $1,000 = $7,000.
An Oklahoma insurer intends to renew a commercial fire policy at a higher premium with a larger deductible, and gives the named insured no notice of the changes before the expiration date. Section 3639 requires at least forty-five days' written notice of a premium increase, change in deductible, or reduction in limits or coverage. Where the insurer fails to give it:
Why: 36 O.S. § 3639(E) freezes the OLD terms rather than voiding the new ones, and the freeze ends on the earlier of notice being given or the effective date of replacement coverage the named insured obtains. What happens next depends on the insured's choice: if he elects not to renew, earned premium for the period of extension of the terminated policy is calculated pro rata AT THE LOWER of the current or previous year's rate; if he accepts the renewal, the increase and the other changes take effect the day following the prior policy's expiration or anniversary date. THREE THINGS ARE OUTSIDE THE SUBSECTION and none of them is an individual underwriting decision: changes in a rate or plan filed with or approved by the Commissioner, or filed under the Property and Casualty Competitive Loss Cost Rating Act, applicable to an ENTIRE CLASS of business; changes based on the altered nature or extent of the risk insured; and changes in policy forms so filed or approved and applicable to an entire class. Subsection (F) makes proof of mailing to the address shown in the policy sufficient proof of notice.
Under the PAP, when an insured has two PAPs from DIFFERENT insurers covering the same liability loss on a non-owned auto, coverage is generally coordinated as:
Why: When the insured's coverage is excess (as on a non-owned auto) under two policies, they typically share the excess pro rata as provided in the other-insurance clause.
An employer with worse-than-average claims experience for its class would most likely have an experience modification factor that is:
Why: A debit mod above 1.00 reflects worse-than-average loss experience and increases the employer's premium relative to the class average.
Section 1250.7 forbids an insurer to continue or delay settlement negotiations directly with a claimant who is neither an attorney nor represented by one, for a length of time that causes the claimant's rights to be affected by a statute of limitations or a policy or contract time limit, without written notice that the time limit is expiring. As to when that notice must be given, the subsection provides that it shall be given:
Why: 36 O.S. § 1250.7(E) fixes a date rather than a lead time - ONE YEAR AFTER THE DATE OF THE LOSS - and it applies to first party and third party claimants alike, which is unusual in a section otherwise built around first party claims. The protection is confined to the unrepresented: a claimant who is an attorney, or who is represented by one, is outside it. Read it with subsection (F), which comes at the same subject from the other side: no insurer shall make statements indicating that a THIRD PARTY claimant's rights may be impaired if a form or release is not completed within a given time, unless the statement is made for the purpose of notifying him of a statute of limitations. So the article forbids using a limitation period as pressure and requires disclosing one that is about to bite.
Beyond the specific findings it requires for individual and for business entity producers, section 1435.7 imposes a general standard on an applicant for any licence required by the Oklahoma Producer Licensing Act. The applicant must demonstrate to the Insurance Commissioner that the applicant is:
Why: 36 O.S. § 1435.7(C) is a four-limbed standard and it applies to EVERY licence the Act requires, not only the producer licence - so it reaches the limited lines producer, the managing general agent and, through § 1435.1(C)'s 'specifically referenced' clause, the surplus lines broker. The burden is expressly on the applicant to DEMONSTRATE it. Financial responsibility appears again as a disciplinary cause in § 1435.13(A)(8), which reaches 'demonstrating incompetence, untrustworthiness or financial irresponsibility in the conduct of business in this state or elsewhere' - the same three qualities, stated as their opposites, for a licensee rather than an applicant.
An employer operates in a monopolistic state fund jurisdiction and also wants protection against employee lawsuits not covered by the fund. The appropriate solution is:
Why: Because monopolistic funds provide statutory benefits but not employers liability, a stop gap endorsement (employers liability) on the employer's general liability or WC policy fills that exposure.
Section 1108 states the circumstance in which a surplus lines licensee or broker may place coverage with a nonadmitted insurer or surplus lines insurer. That circumstance is that the particular insurance coverage, or type, class or kind of coverage:
Why: 36 O.S. § 1108's standard is READILY PROCURABLE, which is a good deal easier to satisfy than absolute unavailability but is not a price test either - the second and third options mark the two ways of getting it wrong. § 1106 supplies the corresponding procedural obligation, permitting placement with surplus lines insurers where the insurance required to protect the interest of the insured, for the amount, coverage terms and solvency requirements of the insured, cannot be procured from admitted insurers AFTER INQUIRY IN THE MARKET available to the producer - which is the diligent search the practice calls it. One coverage is exempted from that search entirely: by § 1106.2 a licensee need make no due diligence search when seeking to procure or place FLOOD INSURANCE with a nonadmitted insurer.