Vermont Property & Casualty Insurance License, Practice Exams

What is the purpose and scope of Regulation I-2010-03, section 1?

1. Procedures for P&C form filings under 3541, rates and supplementary rate information under 4688, consent to rate under 4688(f), and workers compensation under 4687 - all lines, including title and surety bonds. ✓
2. To set the standards by which the Commissioner judges whether a rate is excessive, inadequate or unfairly discriminatory, the regulation being concerned with the substance of a filing rather than with the manner of its submission.
3. To replace the filing requirements of Title 8 with a single electronic procedure, the regulation superseding sections 3541 and 4688 as to any filing made after its effective date and governing both the procedure for filing and the grounds on which the Commissioner may disapprove what has been filed under it.
4. To set procedures for property and casualty filings other than title and surety, those two lines having their own filing rules, and to govern life and health filings so far as an insurer writes them alongside property and casualty business.

Why: Regulation I-2010-03, sections 1(A)(1) to (4), 1(B) and 1(C). TITLE AND SURETY ARE EXPRESSLY IN SCOPE, which matters because 8 V.S.A. 3541(a) exempts surety bonds from form filing.

When may a Vermont BUSINESS ENTITY's license be suspended, revoked or refused under 8 V.S.A. § 4804(b)?

1. Whenever an individual licensed through the entity commits a violation, the entity being answerable for the conduct of everyone who acts under its licence whatever its own officers knew about the matter at the time.
2. Where an individual licensee's violation was known or should have been known by a partner, officer, director or manager and was neither reported nor corrected. ✓
3. Only where the entity itself has committed one of the grounds listed in the section, the conduct of an individual producer being that person's own responsibility and no basis for action against the firm which employs that person.
4. Where an individual licensee's violation was known to the entity's officers, whether or not anything was done about it, the knowledge being enough and the reporting of the matter going to mitigation rather than to liability.

Why: 8 V.S.A. § 4804(b). Knowledge or constructive knowledge AND a failure both to report and to correct - all three limbs.

What penalty does 8 V.S.A. § 3368(c) carry?

1. An administrative penalty of not more than $5,000 for each violation, the subsection setting a ceiling but leaving the Commissioner free to impose a nominal penalty where the violation was inadvertent.
2. A fine of not more than $10,000 for each violation, recoverable by the Attorney General in a civil action, together with an order requiring the insurer to return every premium it has collected in this State during the period in which it was transacting business without a certificate of authority.
3. Revocation of the insurer's eligibility to apply for a certificate of authority for three years, in addition to an administrative penalty in whatever amount the Commissioner finds proportionate to the business written.
4. An administrative penalty of not less than $500 nor more than $5,000 for each violation of subsection (a), the floor being as much a part of the subsection as the ceiling. ✓

Why: 8 V.S.A. § 3368(c). THE FLOOR MATTERS: this is one of the few penalties in the title with a MINIMUM as well as a maximum.

What is MISREPRESENTATION OF SERVICES OR PRODUCTS under 8 V.S.A. § 4724(13)?

1. Any person offering services or insurance policies to the public in such a way as to mislead or to fail to adequately disclose to the public the true nature of the policies or the services offered. ✓
2. The use by a producer of a title or designation which the Commissioner has not approved, the subdivision requiring that any title suggesting financial or advisory expertise be filed with the Department before use.
3. The sale of an insurance policy in connection with any other product or service, the subdivision separating the business of insurance from other lines of commerce and requiring that a person who offers both disclose in writing which of the two the transaction concerns before taking any money from the customer.
4. Advertising a service which the person offering it is not licensed in this State to perform, together with any representation that the person acts for an insurer with which the person has no written agency agreement.

Why: 8 V.S.A. § 4724(13). It reaches the WAY THE OFFER IS MADE TO THE PUBLIC, which is what separates it from the individual-sale misrepresentation in (1).

How long before use must a form be filed under 8 V.S.A. § 3541(b), and what happens then?

1. Not less than sixty days in advance, at the end of which the form may be used unless the Commissioner has asked in writing for more time, in which case the insurer must wait for an express approval.
2. Not less than thirty days in advance, at the end of which the insurer must obtain the Commissioner's written approval before the form is used, the subsection making silence a refusal rather than an approval so that an insurer which has heard nothing may not put the form on the street.
3. Not less than fifteen days in advance for a form which follows a rating organization's filing, and not less than forty-five days in advance for any other form, the two periods running from the date the Department stamps the filing received.
4. Not less than 30 days in advance of any delivery. At the expiration of those 30 days the form is deemed approved unless it has first been affirmatively approved or disapproved by order. Approval by the Commissioner waives any unexpired part of the waiting period. ✓

Why: 8 V.S.A. § 3541(b). DEEMED APPROVAL - SILENCE IS CONSENT - is the rule, which is why the extension in the same subsection matters.

Several businesses pool their funds to collectively cover one another's losses without buying commercial insurance. This best illustrates risk:

1. Transfer to an insurer
2. Reduction
3. Avoidance
4. Sharing ✓

Why: Risk sharing or pooling spreads the cost of losses among a group of similarly exposed parties.

A civilian working for a U.S. defense contractor on a military base overseas is injured. Which act most likely provides workers' compensation coverage?

1. The Jones Act
2. FECA
3. FELA
4. The Defense Base Act ✓

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.

What does an appointment cover under 8 V.S.A. § 4813l(b) and (c)?

1. One appointment covers every line the producer is licensed for, the appointment being a relationship between the company and the producer rather than a permission for particular lines of business under the law of this State.
2. The appointment covers the lines named in the producer's license, so that adding a line to the license extends every existing appointment automatically without any further filing by the insurers concerned.
3. The insurer designates the producer as its agent for the lines of insurance the producer will be authorized to sell, solicit or negotiate for it; and an insurer shall make a separate appointment for each line of insurance, as section 4813g sets out. ✓
4. The appointment covers whatever lines the agency contract between the insurer and the producer describes, the filing with the Department being a notification of the contract rather than a designation of the lines authorized.

Why: 8 V.S.A. § 4813l(b) and (c). SEPARATE appointment per line - which is why § 4800(2)(A)(iii) charges the appointment fee PER QUALIFICATION.

Installing a sprinkler system and smoke alarms in a warehouse is an example of risk:

1. Avoidance
2. Transfer
3. Sharing
4. Reduction ✓

Why: Risk reduction lowers the frequency or severity of potential losses through measures like safety devices.

How is process served on a Vermont nonresident licensee under 8 V.S.A. § 4800(3)(B)(ii)?

1. The application designates the commissioner and successors as the applicant's true and lawful attorney for process arising out of the insurance business here; service is made on the commissioner with a twenty-five dollar fee, and a copy is forwarded by registered or certified mail. ✓
2. By personal service upon the licensee in the state of residence, in accordance with the law of that state, the designation in the application being a formality which does not displace the ordinary requirement of personal service in a civil action.
3. By publication in a newspaper of general circulation in the county in which the cause of action arose, together with a copy mailed to the licensee's last known address, which is the method the chapter prescribes for a party outside the jurisdiction.
4. By serving the Commissioner, without any fee, the Commissioner then serving the licensee personally through the insurance regulator of the licensee's home state under the reciprocal arrangements which the Department maintains with other states.

Why: 8 V.S.A. § 4800(3)(B)(ii). The designation makes service on the Commissioner AS GOOD AS PERSONAL SERVICE IN THIS STATE, and the fee is $25.

Which of the following is a residual market mechanism rather than a risk-financing alternative?

1. Captive insurer
2. Self-insurance
3. Joint underwriting association ✓
4. Risk retention group

Why: A joint underwriting association is a residual market providing coverage otherwise unavailable, whereas captives, self-insurance, and RRGs are alternative risk-financing techniques.

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:

1. Coverage E — Personal Liability
2. Coverage F — Medical Payments to Others ✓
3. Coverage C — Personal Property
4. Coverage D — Loss of Use

Why: Coverage F pays reasonable medical expenses for injured third parties on a no-fault, goodwill basis without requiring a finding of legal liability.

Which further grounds does 8 V.S.A. § 4804(a) list for Vermont license discipline?

1. Fraudulent, coercive or dishonest practices or proven incompetence or financial irresponsibility; suspension or revocation elsewhere; forgery; cheating on the examination; taking business from an unlicensed person; and child support or tax default. ✓
2. Any conduct unbecoming a licensee, the list being illustrative rather than exhaustive and the Commissioner retaining a general discretion to discipline for conduct which brings the business of insurance into disrepute in this State.
3. Suspension or revocation in another state, and forgery, which are the two grounds added to the section by the producer licensing model; matters such as child support and income tax are enforced by the agencies responsible for them rather than through a licence.
4. Incompetence or financial irresponsibility shown in the conduct of the licensee's own affairs, and nothing beyond it, the remaining paragraphs of the subsection describing the procedure rather than adding further grounds.

Why: 8 V.S.A. § 4804(a)(9) to (15). The child support and State income tax grounds are the two most easily forgotten.

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

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

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

The General Aggregate Limit in the standard CGL applies to all of the following EXCEPT:

1. Coverage A losses other than products-completed operations
2. Coverage B personal and advertising injury
3. Coverage C medical payments
4. Products-completed operations claims ✓

Why: Products-completed operations losses are subject to their own separate Products-Completed Operations Aggregate, not the General Aggregate.

A Vermont agency contract is executed on 1 March and the producer's first application reaches the insurer on 20 March. When is the appointment notice due?

1. By 16 March - fifteen days from the execution of the agency contract, which is the sooner of the two events 8 V.S.A. § 4813l(d) names. ✓
2. By 4 April, fifteen days from the submission of the first application, the filing obligation running from the point at which the producer actually begins to act for the insurer rather than from the signing of the contract between them.
3. By 31 March, thirty days from the execution of the agency contract, which is the period the chapter allows for the filing of an appointment with the Department in this State.
4. By 1 June, the date on which appointments expire, every appointment made during the year being filed together before that date so that the renewal list the Commissioner sends each insurer is complete.

Why: 8 V.S.A. § 4813l(d). WHICHEVER IS SOONER - the contract came first.

A producer (agent) represents the interests of the insurer, while a broker generally represents the interests of the:

1. Underwriting department
2. State insurance department
3. Insured (applicant) ✓
4. Reinsurer

Why: A broker typically represents the insured or applicant in seeking coverage, whereas an agent represents the insurer.

A Vermont resident producer's license is revoked. Which outside bodies must be told?

1. No outside body. The Department records the revocation and answers any inquiry made about the licensee's status, but has no duty to volunteer the information to another regulator or to any national organization.
2. Every state in which the licensee has ever held a license, whether or not a certificate was executed for it, so that no jurisdiction is left unaware of a revocation by the licensee's home state.
3. The NAIC central office, and the commissioner of each state for which the licensee has executed a certificate under 4800(3) - besides the prompt notice owed to the appointing insurers and the licensee. ✓
4. The National Association of Insurance Commissioners alone, which maintains the database from which other regulators obtain the information they need about producers licensed in more than one state.

Why: 8 V.S.A. § 4806(b), which applies on the suspension, revocation or termination of A RESIDENT'S license.

When must an insurer give the NOTICE OF ELIGIBILITY required by 8 V.S.A. § 4227?

1. Whenever a policy of automobile insurance is cancelled or nonrenewed for any reason, including nonpayment of premium, the notice being sent separately within ten days after the cancellation or nonrenewal notice has gone out.
2. Whenever an application for automobile insurance is declined, the insurer being obliged to tell the applicant of the Plan at the time it refuses the business so that the applicant can apply to the Plan without losing time, and to keep a record of the notice for three years.
3. Whenever a policy is cancelled for a suspended or revoked driver's licence, the Plan being the only market available to such an insured once the licence has been restored and the insurer being required to say so in the cancellation notice.
4. When automobile bodily injury and property damage liability coverage is cancelled other than for nonpayment of premium, or on a failure to renew such coverage to which section 4225 applies - the insurer must then tell the named insured of possible eligibility through the Vermont automobile insurance plan. ✓

Why: 8 V.S.A. § 4227. THE NONPAYMENT EXCEPTION IS THE POINT: an insured cancelled for not paying is not told about the Plan. SECTION 4225 IS NOT IN THIS CORPUS.

What notice does Regulation I-1979-02, section 6.E, require before a time limit expires?

1. Written notice to every claimant thirty business days before any applicable limitation period expires, whether or not the claimant is represented, the regulation drawing no distinction between first and third party claimants for this purpose.
2. Written notice sixty calendar days before the limitation period expires, together with a statement of the date on which the insurer calculates that the period will run out and of the steps the claimant would need to take to preserve the claim, which the insurer must set out in plain language in the notice it sends.
3. Written notice that a statute of limitations or policy time limit may be expiring, where the insurer negotiates directly with an unrepresented claimant: 30 business days before to a first party claimant, 60 to a third party. ✓
4. Written notice ten business days before the expiry of any policy time limit, and no notice at all of a statute of limitations, which is a matter of general law of which every claimant is taken to have notice.

Why: Regulation I-1979-02, section 6.E. 30 FIRST PARTY, 60 THIRD PARTY - and the duty arises only where the claimant IS UNREPRESENTED.

What do the definitions of AGENT and CLAIMANT in Regulation I-1979-02, section 4, cover?

1. An agent is a producer appointed by the insurer and licensed in this State, and a claimant is the named insured or any person named as an additional insured on the policy under which the claim is made.
2. An agent is an independent adjuster or public adjuster licensed under the adjuster chapter, and a claimant is any person who has given notice of a claim to the insurer, whether or not that person has any right to payment under the policy, the regulation reaching the handling of every notice the insurer receives.
3. An agent is any employee of the insurer with settlement authority, and a claimant is the person to whom payment is ultimately due, a legal representative or family member having no standing under the regulation unless a formal assignment has been made.
4. An agent is any person authorized to represent an insurer with respect to a claim. A claimant is either a first party claimant, a third party claimant, or both, and includes the claimant's designated legal representative and any member of the claimant's immediate family designated by the claimant. ✓

Why: Regulation I-1979-02, section 4.A and 4.B. THE FAMILY MEMBER MUST BE DESIGNATED BY THE CLAIMANT. The definitions of INSURANCE POLICY and INSURANCE CONTRACT come from 8 V.S.A. § 4722.

When may a Vermont nonresident be licensed without the written examination?

1. Whenever the applicant holds a like license in the home state, the examination requirement applying to residents alone, since a nonresident has already satisfied another regulator of competence to hold the license applied for.
2. Never. Every applicant for a Vermont license must personally take and pass the written examination, the reciprocal provisions of the chapter going to fees and to service of process rather than to the testing of professional competence.
3. At the commissioner's discretion, where the applicant has passed a comparable written examination or has been a continuous holder of a like license from before the examination was required; this does not reach those already exempt under section 4813i. ✓
4. Where the applicant's home state grants the same waiver to Vermont residents, the waiver being reciprocal in operation and available as of right rather than at the discretion of the Commissioner of this State.

Why: 8 V.S.A. § 4800(3)(B)(iv). Discretionary, and the carve-out for those already exempt under § 4813i.

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.

A covered property loss totals $8,000 and the policy carries a $1,000 deductible. The insurer pays:

1. $1,000
2. $7,000 ✓
3. $9,000
4. $8,000

Why: The insurer pays the loss minus the deductible: $8,000 − $1,000 = $7,000.

An insured increases jewelry coverage by scheduling items. Scheduled items differ from blanket Coverage C because they:

1. Are excluded from theft coverage unless a burglar alarm is installed
2. Have lower limits than Coverage C provides for the same class of property
3. Require a mortgage clause naming the lender before the schedule takes effect
4. Are individually listed and valued, often with broader perils and no deductible ✓

Why: Scheduled personal property is individually listed and valued, generally insured on a broader open-peril basis, often with no deductible and above Coverage C sublimits.

The authority that is not written but is reasonably necessary to carry out a producer's express authority is called:

1. Implied authority ✓
2. Apparent authority
3. Express authority
4. Statutory authority

Why: Implied authority is not written but is assumed to be granted because it is necessary to transact the business of the agency.

When do Vermont producer APPOINTMENTS expire, and how are they renewed?

1. At 12:01 A.M. On the first day of June following issuance. Annually the commissioner provides each insurer with an alphabetical appointment renewal list, and the insurer returns it identifying the appointments to be renewed and pays the annual fee. ✓
2. On the same date as the producer's license, so that the license and the appointment fall due together and one filing renews both, the insurer paying the appointment fee and the producer the license fee at that time.
3. Two years from the date of issuance, appointments running on the same 24-month cycle as licenses, and the insurer filing a fresh notice of appointment for each producer it wishes to keep appointed for a further term.
4. On the first day of April of the odd-numbered year, together with the producer licenses to which they attach, the Department having consolidated the two cycles so that an insurer deals with the Department once every two years.

Why: 8 V.S.A. § 4798(d). JUNE 1 for appointments; the Commissioner sends the list and the insurer marks it up.

What do Regulation I-2000-02, sections 10 and 11, establish?

1. An advisory board with power to approve courses on the Commissioner's behalf, and an outside vendor funded from the Department's own budget which administers records but takes no part in approvals.
2. A board of five insurance professionals appointed for fixed three year terms which hears appeals from the disapproval of a course or a provider, and a vendor selected by competitive tender whose fees are set by the Commissioner by order and collected with the producer's renewal fee at the time of application.
3. An advisory board of insurance professionals and consumers to recommend on the requirements; and power to contract with an outside vendor paid for by renewal applicants and providers. ✓
4. An advisory board of consumers only, so that the programme is judged by those it protects, and an outside vendor whose costs fall on the providers alone, producers paying nothing beyond their ordinary renewal fee.

Why: Regulation I-2000-02, sections 10(A), 10(B) and 11. THE VENDOR MAY APPROVE COURSES AND PROVIDERS, and its fees MAY BE PAYABLE DIRECTLY TO IT.

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

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

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

The 'mysterious disappearance' of property is typically covered under which?

1. DP-1 basic named-peril coverage, once the theft endorsement is attached to the policy
2. HO open-peril personal property scheduling (e.g., personal articles floater) ✓
3. Coverage F medical payments, which reimburses the value of property that cannot be located
4. Coverage D, loss of use, limited to 20% of the Coverage A limit

Why: Open-peril scheduled coverage (personal articles floater) can cover mysterious disappearance, which named-peril forms typically do not.

A bailee is a party who:

1. Insures only goods that the party itself owns and keeps at its own location
2. Has temporary possession of another's property for a specific purpose ✓
3. Is a federal regulator who licenses warehouses and other storage operations
4. Owns the property outright and holds clear legal title to it at all times

Why: A bailee has lawful temporary possession of another's property (e.g., a dry cleaner or repair shop) and may be liable for its safekeeping.

Injuries to civilian federal government employees (such as a postal or federal agency worker) are covered under:

1. FELA, since the employer is federal
2. The Defense Base Act, for postal routes
3. The Federal Employees' Compensation Act (FECA) ✓
4. The LHWCA, for federal facilities

Why: FECA provides workers' compensation benefits to civilian employees of the federal government for job-related injuries and illnesses.

How does section 2(C)(2) treat a consumer who is NOT a Vermont resident?

1. The regulation does not apply to that consumer at all, a Vermont licensee being free to follow whatever practice it chooses outside this State provided it does not thereby breach the law of the place where the consumer lives.
2. The licensee must apply the Vermont rule to every consumer wherever resident, the subsection extending this State's protection to the whole of a Vermont-domiciled licensee's book on the footing that a single privacy policy is easier to administer and that the consumer should not be worse off for dealing with a company here.
3. A licensee domiciled in this state is deemed to be in compliance with title V of the Gramm-Leach-Bliley act in this State as to that consumer if it complies with a law or regulation enacted in the state of the consumer's domicile that meets the requirements of title V. ✓
4. The consumer may elect in writing whether Vermont law or the law of the consumer's own state applies to the handling of that consumer's information, and the licensee must record the election in the consumer's file.

Why: Regulation IH-2001-01, section 2(C)(2). IT IS A SAFE HARBOUR, not an exemption, and it is keyed to THE CONSUMER'S DOMICILE meeting the federal standard.

Which of the following is one of the four required elements of a legally enforceable contract?

1. Aleatory exchange
2. Subrogation
3. Indemnification
4. Consideration ✓

Why: The required elements of a contract are offer and acceptance, consideration, competent parties, and legal purpose.

How is a CASH SETTLEMENT for a motor vehicle total loss calculated under Regulation I-1979-02, section 8.B.2?

1. On the average of three dealer quotations for a comparable vehicle obtained in the local market, less any deductible, the insurer furnishing copies of the quotations to the claimant with its settlement offer.
2. On the retail value shown in the NADA guide in effect at the time of the loss, less any deductible and less an allowance for the condition of the vehicle determined by the insurer's appraiser on an actual inspection of it, the guide being the sole source the regulation recognises for a vehicle of a make and model which it lists.
3. On actual cost, less any deductible, to buy a comparable vehicle including taxes and transfer fees - no less than the average of the NADA guide retail value and a third party vendor's. ✓
4. On the amount the claimant actually pays for a replacement vehicle within thirty days of the loss, the insurer advancing the guide value and adjusting the settlement once the purchase has been made and the invoice produced.

Why: Regulation I-1979-02, section 8.B.2(a) and (b). IT IS AN AVERAGE OF TWO SOURCES and the figure is A FLOOR - NO LESS THAN.

Which figures belong to Vermont's continuing education and trust account regulations?

1. 20 hours of CE in the preceding two years from 1 October 2000, 4(A); a maximum of 3 hours agency management, 7(B)(3); a minimum of 6 hours ethics and a one-time 6-hour NFIP course from the period ending 31 March 2007, 7(B)(4) and (5); 60 minutes to a credit hour, 3(C); a 12-month review period from 1 January, 3(I); 30 days to decide an application and 45 days to answer a query, 5(B) and 6(D); 90 days to renew, 5(E) and 6(F); 30 days to report a completion and 45 days to issue the certificate, 5(F); 3 years of provider records, 5(F)(9); 20 working days for an instructor's records, 8(B)(3); 12 months the maximum extension, 9(A); and under I-1995-01, remittance within 5 business days, S5(A).
2. 24 hours of CE in the preceding two years from 1 October 2002, 4(A); a maximum of 6 hours ethics and a minimum of 3 hours agency management, 7(B)(3) and (4); a one-time 3-hour NFIP course from the period ending 31 March 2009, 7(B)(5); 50 minutes to a credit hour, 3(C); a 24-month review period from 1 April of an even-numbered year, 3(I); 45 days to decide an application and 30 days to answer a query, 5(B) and 6(D); 30 days to renew, 5(E) and 6(F); 10 days to report a completion and 30 days to issue the certificate, 5(F); 3 years of provider records, 5(F)(9).
3. 24 hours of CE in each review period, 4(A); a maximum of 6 hours agency management, 7(B)(3); a minimum of 3 hours ethics, 7(B)(4); 50 minutes to a credit hour, 3(C); a 24-month review period, 3(I); 60 days to decide an application and 30 days to renew, 5(B) and 5(E); 30 days to report a completion, 5(F)(10); 7 years of provider records, 5(F)(9); 12 months the maximum extension, 9(A); and remittance within 5 business days under the trust account rule, S5(A).
4. 24 hours of CE in the preceding two years from 1 October 2002; a ceiling of 6 hours agency management and floors of 3 hours ethics and a one-time 3-hour NFIP course; 50 minutes to a credit hour; a 24-month review period from 1 April of an odd year; 45 days to decide and 30 days to answer a query; 60 days to renew; 15 days to report a completion and 20 days for the certificate; 5 years of provider records; 6 months the maximum extension. ✓

Why: Regulation I-2000-02, sections 3(C), 3(I), 4(A), 5(B), 5(E), 5(F)(9) to (11), 6(D), 6(F), 7(B)(3) to (5), 8(B)(3) and 9(A); Regulation I-1995-01, S5(A). THE 6 IS A CEILING AND THE TWO 3s ARE FLOORS - reversing them is the commonest error.

Which figures belong to Vermont's rate filing, renewal, cancellation and loss payment sections?

1. 60 days before the effective date to file rates in a competitive market, 4688(a); 60 working days to prefile under 4688(b) and in a noncompetitive market under 4688(c)(1), with 60 more available on written notice; 30 days to confirm a renewal and its premium, 3882(a) and 4715(a), to give notice of nonrenewal, 3881, and to give notice of a transfer to an affiliate; 90 days the age below which 3879 and 4711 do not reach a policy that is not a renewal; 90 days after satisfactory proofs for a fire loss to be due and payable, 3868; two years the maximum suspension under 3968.
2. 30 days before the effective date to file rates in a competitive market, 4688(a); 30 working days to prefile under 4688(b) and in a noncompetitive market under 4688(c)(1), with 30 more available on written notice; 60 days to confirm a renewal and its premium, 3882(a) and 4715(a), and to give notice of nonrenewal, 3881; 30 days the age below which 3879 and 4711 do not reach a policy that is not a renewal; 30 days after satisfactory proofs for a fire loss to be due and payable, 3868.
3. 30 days to file rates in a competitive market, 4688(a); 30 working days to prefile under 4688(b) and in a noncompetitive market, 4688(c)(1), with 30 more on written notice; 45 days to confirm a renewal and its premium, to give notice of nonrenewal, and to give notice of a transfer to an affiliate; 60 days the age below which 3879 and 4711 do not reach a policy that is not a renewal; 60 days after proofs for a fire loss to be due and payable, 3868. ✓
4. 45 days before the effective date to file rates in a competitive market, 4688(a); 45 working days to prefile in a noncompetitive market, 4688(c)(1); 45 days to confirm a renewal and its premium, 3882(a), and 30 days to give notice of nonrenewal, 3881; 90 days the age below which 3879 and 4711 do not reach a policy; one year the maximum suspension under 3968.

Why: 8 V.S.A. §§ 4688(a), (b) and (c)(1), 3882(a) and (b), 4715(a), 3881, 3882(c)(3), 3879(b), 4711(b), 3868 and 3968. THE CANCELLATION NOTICE PERIODS ARE NOT AMONG THEM: section 3880, which carries them, is not in this corpus.

What do Regulation I-1979-02, sections 6.D and 6.F, forbid?

1. Settling a first party claim before the liability of a third party has been determined, and asking a third party claimant to sign a release before the claimant has had an opportunity to take legal advice on it.
2. 6.D: failing to settle first party claims on the basis that responsibility for payment should be assumed by others. 6.F: statements that a third party claimant's rights may be impaired if a release is not completed in time. ✓
3. Referring a first party claimant to another insurer which may also be liable for the loss, and sending a release to a third party claimant at all, the regulation requiring that any release be presented in person by an adjuster who can explain its effect to the claimant before it is signed and returned to the company.
4. Paying a first party claim subject to a reservation of rights against another insurer, and telling a third party claimant that an offer will be withdrawn if it is not accepted, whether or not a limitation period is approaching.

Why: Regulation I-1979-02, sections 6.D and 6.F. THE STATUTE OF LIMITATIONS EXCEPTION IS NARROW: it permits a warning, not a deadline of the insurer's own making.

What does Regulation I-1979-02, section 6.A, require after proofs of loss are received?

1. Within 15 business days after receipt of properly executed proofs of loss, the first party claimant must be advised of the acceptance or denial of the claim. No claim may be denied on a specific policy provision, condition or exclusion unless reference to it is included in the denial. The denial must be in writing and a copy must be in the claim file. ✓
2. Within thirty business days after receipt of proofs of loss the claimant must be told whether the claim is accepted, and a denial must state the reason for it and be sent by certified mail to the claimant's last known address.
3. Within fifteen business days the insurer must either pay the claim or deny it, the regulation allowing no third course, so that an insurer which has not completed its investigation within that time must deny the claim and reopen it later if the investigation turns out to support payment after all.
4. Within fifteen calendar days after the loss is reported the insurer must advise the claimant of acceptance or denial, proofs of loss being required only where the policy expressly calls for them and the period running from the notice of loss in every other case.

Why: Regulation I-1979-02, section 6.A. 15 BUSINESS DAYS, FROM PROPERLY EXECUTED PROOFS OF LOSS, AND THE DENIAL MUST NAME THE PROVISION RELIED ON.

What does 8 V.S.A. § 4241 require of insurers and advisory organizations?

1. That every insurer writing automobile insurance in this State accept its proportionate share of applicants assigned to it by the Commissioner, the section creating the obligation to write rather than the obligation to build the mechanism.
2. That all insurers licensed to write automobile insurance against bodily injury, property damage, medical payments or other loss - including liability, collision, comprehensive and uninsured motorist coverages - and every advisory or service organization under chapter 128 cooperate in the formation, implementation, rating and operation of a plan. ✓
3. That every insurer writing automobile liability insurance contribute to a fund from which the claims of uninsured motorists are paid, the assessment being made in proportion to each insurer's share of the automobile liability premium written in this State in the preceding calendar year.
4. That every insurer licensed in this State file with the Commissioner a plan for writing applicants it would otherwise decline, the Commissioner approving or disapproving each such plan and reviewing it whenever the insurer changes its underwriting rules.

Why: 8 V.S.A. § 4241. The duty is TO COOPERATE IN THE PLAN, and it binds ADVISORY AND SERVICE ORGANIZATIONS as well as insurers.

What do Regulation I-1979-02, sections 7.A and 7.B, require?

1. 7.A: on denying a claim in whole or in part, the insurer must give the claimant appropriate reasons including reference to applicable policy provisions, conditions or exclusions. 7.B: all claim payments must include an appropriate explanation of the basis of the payment - for example a full explanation of all deductions for depreciation, deductibles or coinsurance. ✓
2. That a denial be sent by certified mail with a copy to the producer of record, and that every payment be accompanied by a copy of the adjuster's report on which the amount of the payment was calculated.
3. That a partial denial be treated as a full denial for the purposes of the fifteen-business-day clock, and that a payment which is less than the amount claimed be accompanied by a written offer to submit the difference to appraisal at the insurer's expense if the claimant is not content with the sum which has been offered.
4. That a denial state the reasons in the insurer's own words without reference to the policy, so that a claimant who is not familiar with insurance wording can understand it, and that a payment state only the net amount due.

Why: Regulation I-1979-02, sections 7.A and 7.B. 7.A REACHES A PARTIAL DENIAL, and 7.B's example - DEPRECIATION, DEDUCTIBLES, COINSURANCE - is in the text of the regulation.

What do 8 V.S.A. § 4688(d)(1) and (d)(2) require?

1. That rates be filed as the commissioner prescribes, with workers' compensation rates filed simultaneously for information with the designated organization; and that an incomplete filing is not deemed made. ✓
2. That every filing be made on a form the Commissioner publishes, and that a filing which is incomplete be returned to the insurer within ten working days with a statement of what is missing from it.
3. That workers' compensation rates be filed with the designated advisory organization for approval before they are filed with the Department, and that an incomplete filing in any market be treated as withdrawn if the missing information is not supplied within thirty days of the Commissioner's request for it.
4. That rates be filed electronically in the manner the Commissioner prescribes by rule, and that an incomplete filing in a competitive market be deemed made on the date the last missing item reaches the Department.

Why: 8 V.S.A. § 4688(d)(1) and (2). The NOT DEEMED MADE rule is expressly limited to A NONCOMPETITIVE MARKET, where the waiting period is what the filing buys.

A standard unendorsed DP-1 Basic Form covers which core perils as its base coverage?

1. Theft and vandalism
2. Fire, lightning, and internal explosion ✓
3. Earthquake and flood
4. Liability and medical payments

Why: The most basic DP-1 base coverage is fire, lightning, and internal explosion; Extended Coverage perils such as windstorm and hail are added on top of this core.

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

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

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

What does ANNUALLY mean for the notice required by Regulation IH-2001-01, section 6(A)?

1. Once in each calendar year, the regulation fixing the calendar year as the measure so that every licensee reports on the same cycle and a customer can tell when a notice is overdue.
2. Once in each period of twelve months running from the anniversary of the policy, the licensee having no discretion over the period because it is set by the date on which the customer relationship began, and a notice being overdue the day after that anniversary passes without one having been sent to the customer.
3. At least once every eighteen months, the regulation allowing a longer interval than the federal rule in recognition of the additional opt-in notices a Vermont licensee must send.
4. A clear and conspicuous notice reflecting the licensee's privacy policies not less than annually during the continuation of the customer relationship - and annually means at least once in any period of 12 consecutive months during which the relationship exists. The licensee may define the 12-month period but must apply it to the customer on a consistent basis. ✓

Why: Regulation IH-2001-01, section 6(A) and its example. If the licensee uses the calendar year and a customer opens an account in year one, the annual notice is due BY 31 DECEMBER OF YEAR TWO.

In commercial auto, motor carrier or trucking risks often need cargo coverage because the BACF/Motor Carrier liability form:

1. Pays the carrier's cargo liability claims under physical damage coverage once the trailer's deductible has been satisfied
2. Does not cover the carrier's liability for damage to the property (cargo) being hauled ✓
3. Covers cargo only for theft occurring while the tractor-trailer is parked at a secured terminal
4. Automatically covers cargo up to the liability limit shown in the declarations for each shipment

Why: Auto liability and physical damage forms cover the vehicle and third-party injury/damage, not the freight; motor truck cargo insurance is needed for hauled goods.

What must the notice of a transfer to an affiliate contain?

1. A statement of the affiliate's financial rating, a copy of the affiliate's certificate of authority, and the name and address of the producer who will service the policy after the transfer takes effect.
2. A comparison of the expiring and the transferred coverage clause by clause, a statement that the insured may decline the transfer and be treated as nonrenewed instead, and the telephone number of the Department's consumer services division for an insured who wishes to complain about the transfer or about the way it was explained.
3. The reasons for the transfer stated in full, the premium at which the affiliate will write the policy, and a notice that the insured's claims history has been furnished to the affiliate in connection with the transfer.
4. Compliance with any federal law requirements on notice of adverse credit determination; a telephone number of the insurer, or of the producer if any, and a toll-free number of the insurer in the case of personal lines, where the insured can learn more about the transfer and the reasons for it; and compliance with the section's other renewal provisions. ✓

Why: 8 V.S.A. § 3882(c)(3)(A), (B) and (C), and 4715(c)(3). The TOLL-FREE number is required ONLY FOR PERSONAL LINES POLICIES.

What do subdivisions (III) through (VI) of 8 V.S.A. § 4724(8)(C)(iv) require?

1. That the Commissioner approve the product or service before it is first offered, the subdivision making prior approval the condition of the exception and giving the Department sixty days in which to act on the filing.
2. That the insurer file the product or service with the Department annually with its rate filing, that the value of it be counted as a premium credit in the rating plan, and that the insured be permitted to decline the service and take the credit in cash instead at the insured's own election.
3. That the product or service be offered on identical terms to every customer in the State, that its cost never exceed one percent of the customer's annual premium, and that the insurer certify compliance to the Commissioner each quarter.
4. That the cost to the insurer be found by the Commissioner reasonable against that customer's premium or coverage for the class; that contact information be given; that availability rest on documented objective criteria. ✓

Why: 8 V.S.A. § 4724(8)(C)(iv)(III) to (VI). THE 10-DAY REPORT is made AFTER offering or providing, and must explain HOW EACH CRITERION IS MET.

What does Bulletin 77 provide if a driver cannot produce a card when asked?

1. The operator is charged at once and may raise the existence of coverage as a defence at the hearing, the burden resting on the operator to prove that a policy was in force on the date in question.
2. The operator has thirty days in which to produce proof to the Department of Motor Vehicles rather than to the officer, and the charge is dismissed on production, the bulletin routing the matter through the licensing authority because it is the registration rather than the operation of the vehicle which is at stake in such a case.
3. An identification card must be produced by the operator on the request of a law enforcement officer; but an operator unable to produce one shall not be charged with a violation of 23 V.S.A. 800 if a card showing coverage in effect on the date of the alleged violation is presented to the arresting officer within 15 days. ✓
4. The operator may be charged and the vehicle registration suspended immediately, reinstatement following on proof of coverage within fifteen days of the suspension taking effect.

Why: Bulletin 77, Rules Regarding Mandatory Insurance, paragraphs D and E. By paragraph F, an out-of-state licensee's proof is ACCEPTED HERE if it contains SUBSTANTIALLY THE SAME INFORMATION. A self-insured person uses a card prepared for the purpose or the CERTIFICATE OF SELF-INSURANCE.

What record and reporting duties do Regulation I-2000-02, sections 5(F)(8) to (11), place on a provider?

1. It must keep records for three years, report completions monthly, and issue certificates within thirty days, the three deadlines being set so that a provider can discharge them all in a single end-of-month process.
2. It must keep attendance records for five years and produce them on request, report completions to the Department within fifteen days, and issue a certificate only to a student who asks for one, the regulation treating the certificate as the student's evidence rather than as something owed to every person completing the course.
3. It must refuse credit to any student absent for any part of a course, keep records for seven years, notify the vendor within ten days and issue certificates within fifteen days of the course being completed.
4. It must refuse to award credit for periods it knows a student was absent; maintain accurate records of courses, instructors, attendance and completion for at least 5 years from the date of completion; notify the Commissioner or outside vendor of producers who completed a course within 15 days; and issue a certificate of completion within 20 days of completion. ✓

Why: Regulation I-2000-02, sections 5(F)(8), (9), (10) and (11). FOUR DIFFERENT CLOCKS: 5 years, 15 days, 20 days - and the absence rule turns on what the provider KNOWS.

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

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

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

What is the difference between PRIOR APPROVAL and USE AND FILE in Regulation I-2010-03, section 3?

1. Prior approval applies to rates and use and file to forms, the regulation reversing the ordinary arrangement because a rate affects what the consumer pays while a form merely records what was agreed.
2. Prior approval means a filing can be used, sold or offered for sale only after it has been filed and approved or deemed approved under 8 V.S.A. 3541 to 3542, 4688(b) to (c) and 4689. Use and file means a rate or supplementary rate information can be used if it is filed no later than 15 calendar days after its initial use under 4688(a), (d) to (e) and (g) to (h). ✓
3. Prior approval means the Commissioner must sign the filing before it is used, deemed approval having no place in this regulation, and use and file means a filing may be used at once provided it is submitted within thirty days and the Department raises no objection to it during that period after the submission.
4. Prior approval and use and file are alternatives the filer may choose between, a filer electing prior approval obtaining certainty in exchange for delay and one electing use and file taking the risk of a later disapproval.

Why: Regulation I-2010-03, sections 3(K) and 3(S). FORMS ARE PRIOR APPROVAL AND RATES ARE USE AND FILE - with the exceptions in 8(B)(1) running the other way.

A false statement of a material fact on an application that, if known, would have changed the insurer's underwriting decision is a:

1. Warranty
2. Representation
3. Misrepresentation ✓
4. Estoppel

Why: A misrepresentation is a false statement; if it is material it can void the contract.

What power does 8 V.S.A. § 4726(a) give the Commissioner?

1. The power to examine and investigate any person engaged in the business of insurance in this state in order to determine whether that person has been or is engaged in any unfair method of competition or any unfair or deceptive act or practice. ✓
2. The power to hold a hearing on any complaint referred to the Department and to make findings on it, the subsection confining the Commissioner to matters which a member of the public has first brought to the Department's notice.
3. The power to issue a cease and desist order against any person engaged in the business of insurance without prior notice or hearing, the order taking effect at once and the person against whom it is made having thirty days in which to ask the Commissioner to vacate or to modify it.
4. The power to examine an insurer's books once in every five years and to investigate a producer on the written request of an insurer which has appointed that producer in this State.

Why: 8 V.S.A. § 4726(a). By subsection (c) these powers are IN ADDITION TO any other powers to enforce penalties, fines or forfeitures authorized by law.

Which automobile coverages does 8 V.S.A. § 4241 name?

1. Automobile liability insurance at the limits required by the financial responsibility law, and no other coverage, the Plan being confined to the insurance a Vermont motorist is obliged to carry.
2. Automobile insurance against bodily injury, property damage, medical payments or other loss, including what are commonly known as liability, collision, comprehensive and uninsured motorist coverages. ✓
3. Automobile liability and physical damage insurance on private passenger vehicles only, commercial automobile risks being apportioned under a separate plan which the Commissioner approves for that class of business and which is administered by the same organization as the private passenger plan.
4. Bodily injury and property damage liability, medical payments and uninsured motorist coverages, collision and comprehensive being excluded because the Plan exists to protect the public rather than to insure the applicant's own vehicle.

Why: 8 V.S.A. § 4241. THE PHYSICAL DAMAGE COVERAGES ARE IN - collision and comprehensive are named expressly.

Which licenses does 8 V.S.A. § 4800 govern?

1. The licenses of an insurance producer, surplus lines broker, managing general agent, reinsurance intermediary, consultant, limited lines producer, business entity limited lines producer, adjuster, public adjuster and appraiser - none may be issued, continued or permitted to continue except in compliance. ✓
2. The insurance producer's license alone. Adjusters, appraisers and consultants are licensed under their own sections of the chapter, each with its own application, fee and examination requirements, and section 4800 is the general provision for producers only.
3. Every license the Department issues, including the certificate of authority of an insurer and the registration of a rating organization, the section being the general licensing provision of the insurance title of this State.
4. The licenses of individuals only. A business entity is licensed under the business entity provisions of the producer licensing subchapter and is outside section 4800, which speaks of natural persons who sell, solicit or negotiate insurance in this State.

Why: 8 V.S.A. § 4800. Ten license types, and the prohibition runs to ISSUING, CONTINUING and PERMITTING TO CONTINUE.

Which further transactions do 8 V.S.A. § 3368(a)(5), (7), (8) and (9) exempt?

1. Contracts issued by fraternal benefit societies, insurance on property owned by the State or a municipality, and any policy issued before the enactment of the chapter in which this section appears.
2. Contracts of a nonprofit company serving educational institutions; wet marine and transportation insurance; insurance on aircraft or railroads in interstate commerce. ✓
3. Contracts of a charitable organization issued without profit, insurance on watercraft of any description, insurance on rolling stock wherever it is operated, and policies issued before the date on which this State first required a certificate of authority of any insurer doing business within its borders.
4. Contracts issued to a college or university, ocean marine insurance of every kind, insurance on commercial aircraft only, and any policy which has been continuously renewed since before the section took effect.

Why: 8 V.S.A. § 3368(a)(5), (7), (8) and (9). The TWO DATES in (9) are the point of the subdivision: the aircraft and railroad exemption came twelve years after the others.

Coverage C of the BPP applies to:

1. Outdoor signs attached to the building, which are covered without a limit
2. The insured's own stock and merchandise held for sale
3. Personal property of others in the insured's care, custody, or control ✓
4. The building foundation below the lowest basement floor

Why: Coverage C — Personal Property of Others covers property of others in the insured's care, custody, or control while at the described premises.

What do Regulation I-2000-02, sections 5(H) and 5(I), require about fees and compulsion?

1. Fees must be approved by the Commissioner before a course is offered, refunds must be made within fourteen days of a cancellation, and a provider may require its own employees to attend its courses provided it does not charge them.
2. A cancelled course means a refund within 30 days or, at the producer's request, transfer of the fee to another course; each student gets a written refund policy; and a provider may not require its own producers to attend. ✓
3. A provider must publish a schedule of fees and may not vary from it, must refund in full any fee paid by a producer who withdraws before the course begins, and must permit an employer to nominate courses for its producers so long as the producers remain free to take additional courses elsewhere at their own expense.
4. Fees are refundable only where the provider cancels within seven days of the scheduled date, and a provider may require producers it employs to attend its courses where it bears the cost of their attendance.

Why: Regulation I-2000-02, sections 5(H)(1), 5(H)(2) and 5(I). 5(I) IS AN ANTI-TYING RULE: a captive audience may not be made to buy its education in-house.

What power does 8 V.S.A. § 3661(a)(1) give the Commissioner, and how is it reviewed?

1. The power to issue an order to cease and desist the violation or activity. The order is subject to de novo judicial review in the Washington Superior Court, but review does not stay enforcement unless the court so determines after a preliminary hearing that a stay will not unduly injure the interests of the people of the state. ✓
2. The power to issue a cease and desist order which takes effect only after a hearing before the Commissioner, an appeal from the order lying to the Supreme Court on the record made at that hearing.
3. The power to suspend the licence or certificate of authority of the person concerned pending an investigation, the suspension being reviewable in the Superior Court of the county in which the person resides or has its principal office, and the filing of a petition for review operating as a stay of the suspension until the court has heard the matter.
4. The power to order the person to cease the activity and to make restitution to any person harmed by it, the order being enforceable as a judgment of the Washington Superior Court without further process.

Why: 8 V.S.A. § 3661(a). The power is engaged WHEN THE COMMISSIONER BELIEVES an insurer, an officer or agent, OR ANY OTHER PERSON has violated the law, a Department rule or an order relating to insurance, or has not complied with its requirements.

Which endorsement would increase the Coverage C limit available for items used in a home business beyond the small special limit?

1. Inflation guard, which raises the special limit on business property annually
2. Personal injury endorsement, which broadens Coverage C to include property used in any trade or profession
3. Mortgage clause, which extends Coverage C to the lender's business equipment
4. A home business / permitted incidental occupancy or business property endorsement ✓

Why: Because business property on premises has a low special limit, a home business or permitted incidental occupancy endorsement is used to increase business property and add appropriate liability.

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

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

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

What does Regulation IH-2001-01 provide about NONDISCRIMINATION and VIOLATIONS?

1. A licensee may charge a higher premium to a consumer who declines to opt in, provided the difference reflects the additional cost of servicing that consumer, and a violation of the regulation carries an administrative penalty of not more than $1,000.
2. A licensee shall not unfairly discriminate against a consumer because they have not opted in as to nonpublic personal financial information, nor because they have not opted in as to nonpublic personal health information; and any violation of the regulation is deemed an unfair method of competition or an unfair or deceptive act under chapter 129. ✓
3. A licensee may decline to write a consumer who will not opt in, the regulation protecting the consumer's choice but not compelling the licensee to contract, and a violation is referred to the Attorney General for prosecution rather than dealt with administratively by the Department under the trade practices chapter.
4. A licensee must treat opted-in and non-opted-in consumers identically in every respect including rating, and a violation results in the automatic suspension of the licensee's certificate of authority until the Commissioner is satisfied it has been remedied.

Why: Regulation IH-2001-01, sections 23(A), 23(B) and 24. ROUTING A BREACH INTO CHAPTER 129 matters: it brings the 4726(b) penalties - $1,000, and $10,000 for a willful violation - to bear on a privacy failure.

A key feature of a risk retention group under federal law is that it:

1. Must be chartered and owned by the federal government rather than by its insureds
2. Once licensed in one state, may operate in other states without full licensing in each ✓
3. May write property coverage only, never liability
4. Is barred from issuing policies and may only broker them

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.

A producer who handles premium funds belonging to the insurer and the insured holds those funds in a:

1. Fiduciary capacity ✓
2. Personal capacity
3. Reciprocal capacity
4. Speculative capacity

Why: A producer holding others' money, such as premiums, acts in a fiduciary capacity and must handle those funds with trust and care.

Which Medicare marketing practices does 8 V.S.A. § 4804(a)(8) make an unfair practice in Vermont?

1. Selling any Medicare product at an in-person appointment, the subdivision requiring Medicare business to be written by mail or through the federal marketplace so that the consumer is not subjected to pressure in the home.
2. Soliciting Medicare business door-to-door, and nothing else, an appointment once made being open to the discussion of any product the consumer and the producer choose to talk about while the producer is there.
3. Marketing Medicare products to a consumer under sixty-five years of age, and using an appointment made for one Medicare product to discuss another, the subdivision confining each appointment to the product for which it was made.
4. Using a Medicare appointment to solicit any other product unless the consumer asks and the products are identified in writing 48 hours in advance; and soliciting Medicare products door-to-door before an invitation from the consumer has been received. ✓

Why: 8 V.S.A. § 4804(a)(8)(A)(ii) and (iii). MEDICARE PRODUCTS there means Parts A, B, C and D and Medicare supplement plans - subdivision (B). The health advertising limb in (A)(i) requires conspicuous disclosure that the purpose is SOLICITATION OF INSURANCE and that CONTACT WILL BE MADE BY AN AGENT OR COMPANY.

A Jewelers Block policy is designed primarily for:

1. Insurance brokers seeking errors and omissions protection for misplaced coverage
2. Automobile dealers insuring vehicles held for sale
3. Manufacturers of jewelry display cases insuring finished cases awaiting shipment
4. Retail and wholesale jewelers covering their stock and customers' property ✓

Why: The Jewelers Block policy is an inland marine form covering a jeweler's stock and customers' jewelry in the jeweler's care against a broad range of perils.

How long may a Vermont license under 8 V.S.A. ch. 131 subchapter 1 continue?

1. Not longer than 24 months, except as subsections (b) and (d) of section 4798 provide for the expiration dates of particular license types and for producer appointments. ✓
2. Not longer than 12 months, every license in this State running for a year from the date of issuance and expiring on its anniversary unless a renewal request and fee have reached the Commissioner before that date arrives.
3. Indefinitely, so long as the annual fee is paid. A Vermont license does not expire by effluxion of time but continues until it is surrendered, suspended or revoked, the renewal being a payment rather than a fresh grant of authority by the Commissioner.
4. Not longer than 36 months, which is the outside limit for every license under the chapter, with the particular expiration dates fixed by rule rather than by the section itself.

Why: 8 V.S.A. § 4798(a). Twenty-four months is the ceiling; the calendar dates in (b) and (d) are what actually fix the expiry.

What does 8 V.S.A. § 3661(a)(2) allow, and what fine follows?

1. The Commissioner may refer the violation to the State's Attorney for the county in which it occurred, who must bring a prosecution, the offender being liable to a fine of not more than $5,000 on conviction.
2. The Commissioner may report each violation, with any information he or she has about it, to the Attorney General, who shall prosecute if he or she deems it advisable. On such a prosecution the offender shall be fined not more than $2,000. ✓
3. The Commissioner may bring a civil action in the name of the State in the Washington Superior Court and recover a penalty of not more than $2,000 for each violation, together with the costs of the investigation, the Attorney General appearing for the Department in the action if the Commissioner requests it.
4. The Commissioner may report the violation to the Attorney General, who must then prosecute it, the offender being liable to a fine of not more than $2,000 for a first violation and not more than $10,000 for any later one.

Why: 8 V.S.A. § 3661(a)(2). THE DISCRETION IS THE ATTORNEY GENERAL'S - IF HE OR SHE DEEMS IT ADVISABLE - and this is a FINE ON A PROSECUTION, not an administrative penalty.

What must an insurer exempted by 8 V.S.A. § 3368(a)(4) still do when it issues to a Vermont resident?

1. File a copy of the certificate with the Commissioner within thirty days of delivering it, together with the name and address of the Vermont resident to whom it was delivered and the amount of the coverage it affords.
2. Appoint the Commissioner as its agent for service of process in this State, pay the premium tax on the Vermont portion of the business, and name a Vermont-licensed producer as the person to whom a certificate holder may address a question about the coverage or a complaint about its administration.
3. Obtain the written acknowledgment of the certificate holder that the coverage is not protected by the Vermont Property and Casualty Insurance Guaranty Association, retaining that acknowledgment for the life of the certificate.
4. Include a notice approved by the commissioner that the policy or certificate is not subject to regulation by Vermont, which the exemption from the certificate requirement does not excuse. ✓

Why: 8 V.S.A. § 3368(a)(4), closing paragraph. The exemption from the certificate requirement DOES NOT CARRY AN EXEMPTION FROM THE NOTICE.

How does 8 V.S.A. § 4675 limit a surcharge where a policy insures more than one automobile?

1. The surcharge must be divided equally among the automobiles insured under the policy, so that no one vehicle bears the whole of an increase which the household's record as a whole has produced.
2. The surcharge may be applied to every automobile on the policy where the operator who generated it has access to all of them, and to a single automobile only where the insurer can show that the operator drives that vehicle and no other, the burden being on the insurer to make the narrower application good.
3. The surcharge resulting from an accident or a conviction, or both, may only be applied to the automobile principally operated by the insured, applicant or other operator currently resident in the same household who generated the surcharge. ✓
4. The surcharge may be applied only to the automobile which was involved in the accident or which the operator was driving at the time of the offence which led to the conviction, whoever principally operates that vehicle.

Why: 8 V.S.A. § 4675. THE TEST IS PRINCIPAL OPERATION BY THE PERSON WHO GENERATED THE SURCHARGE - not which car was involved.

A risk purchasing group (RPG) differs from a risk retention group in that the RPG:

1. Cannot enroll members from the same industry, because federal law requires the group's risks to be unrelated
2. Writes only crop insurance for its farming members
3. Purchases liability insurance on a group basis from an existing insurer rather than forming its own ✓
4. Owns and capitalizes its own licensed insurer

Why: A risk purchasing group does not assume risk itself; its members band together to buy liability coverage as a group from a traditional insurer.

When an insurer's actions lead an insured to believe a right exists, and the insurer is later prevented from denying that the right exists, the legal principle is:

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

Why: Estoppel prevents a party from asserting a right or fact inconsistent with a previous position when another party has relied on that position.

What extension does Regulation I-2000-02, section 9, allow, and what follows if it is missed?

1. The Commissioner may extend the period by up to twelve months on written application, and a producer who fails to complete within the extension is fined rather than suspended, the licence continuing until the next renewal falls due.
2. For good cause shown the Commissioner may extend, for no longer than six months, the time for completing the CE requirements for a review period. The Commissioner shall suspend the license of any applicant who, having received such an extension, has still not satisfactorily completed the requirements. ✓
3. The Commissioner may grant an extension of up to six months on the recommendation of the Advisory Board, and a producer who does not complete within it must retake the licensing examination before the licence can be renewed, the regulation treating a prolonged failure to study as a lapse of qualification.
4. An extension of up to six months is available once in a producer's career, and a producer who misses it may not reapply for a licence for two years from the date the extension expired.

Why: Regulation I-2000-02, section 9(A) and (B). SUSPENSION IS MANDATORY - SHALL SUSPEND - once an extension has been granted and missed. By 6(G)(3) a licence is simply NOT RENEWED where there was no extension at all.

What is the scope of the subchapter under 8 V.S.A. § 3611, and what is it called?

1. It applies to all insurance written in this State by an admitted insurer other than life and health insurance, and is known as the Vermont Insurance Guaranty Act, the life and health lines having a guaranty association of their own.
2. It applies to all kinds of direct insurance except life, title, surety, health, credit, mortgage guaranty and ocean marine insurance, and is known as the Vermont property and casualty insurance guaranty association act. ✓
3. It applies to all direct property and casualty insurance written on risks located in this State, including surplus lines placements made through a licensed broker, and is known as the Vermont Property and Casualty Insurance Guaranty Association Act, its purpose being to pay the covered claims of an insolvent insurer.
4. It applies to every kind of direct insurance without exception, and is known as the Vermont Insurance Guaranty Association Act, the Association being funded by assessments on all admitted insurers in proportion to their Vermont premium.

Why: 8 V.S.A. § 3611. SEVEN LINES ARE EXCEPTED. Note that SURETY is outside the Act, as it is outside the form-filing requirement of 3541(a).

The maximum NFIP contents coverage available to a residential policyholder is:

1. $250,000
2. $50,000
3. $500,000
4. $100,000 ✓

Why: Residential contents coverage under the NFIP is capped at $100,000, separate from the building limit.

Which residual market would most likely provide coverage to a homeowner in a high-crime urban area who has been repeatedly denied property insurance?

1. An automobile assigned-risk plan
2. A risk purchasing group
3. A crop JUA
4. A FAIR Plan ✓

Why: FAIR Plans exist to make basic property insurance available to applicants, including those in urban or high-risk areas, who cannot obtain it voluntarily.