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Property and Casualty Insurance Producer Exam

Insurance terms and concepts: practice questions

Our Property & Casualty Insurance bank has 118 questions on this topic. Here are 5 of them with answers; the full mock exam draws from every topic, like the real one.

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Question 1

In NAIC's glossary, a 'soft market' is:

  1. A seller's market with scarce coverage and rising premiums for most buyers
  2. A market for surplus lines only
  3. A market regulated by the federal government
  4. A buyer's market with ample coverage and falling premiums
Show the answer

D. A buyer's market with ample coverage and falling premiums — A soft market is a buyer's market with abundant supply of insurance driving premiums down.

Question 2

In NAIC's glossary, an admitted company is an insurer that is:

  1. Not licensed in the state
  2. Owned by its policyholders
  3. Formed under a foreign country's laws
  4. Licensed to do business in the state
Show the answer

D. Licensed to do business in the state — An admitted company is licensed to do business in a state.

Question 3

An act cannot be certified under TRIA if property and casualty insurance losses from it total no more than:

  1. $1 million
  2. $5 million
  3. $100 million
  4. $200 million
Show the answer

B. $5 million — The Secretary may not certify an act if P&C losses do not exceed $5,000,000.

Question 4

Under the Fair Credit Reporting Act, a consumer report may be furnished to someone who intends to use it for:

  1. Underwriting insurance involving the consumer
  2. Marketing to the consumer's neighbors
  3. Any purpose the buyer chooses
  4. Setting a consumer's political district
Show the answer

A. Underwriting insurance involving the consumer — Underwriting insurance involving the consumer is a permissible purpose under 15 U.S.C. 1681b.

Question 5

A tort is:

  1. A crime prosecuted by the state, with fines paid to the government
  2. A breach of an insurance contract
  3. A tax on insurance premiums
  4. A civil wrong that causes injury or harm to another
Show the answer

D. A civil wrong that causes injury or harm to another — A tort is an act or omission that gives rise to injury or harm and amounts to a civil wrong.

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