Free Delaware Property practice questions

Answer: C. The Insurance Commissioner

Chapter 48 defines the Commissioner as the Insurance Commissioner, and it defines a licensee as a premium finance company holding a license issued by that Commissioner. The definition does not name the State Bank Commissioner, the Attorney General or the Secretary of State, so none of them is the Commissioner the chapter refers to.

Answer: A. Through an association that assesses the cost of that protection among insurers

The law states its purpose as providing a way to pay covered claims without excessive delay and without financial loss to claimants or policyholders when an insurer becomes insolvent, helping detect and prevent insurer insolvencies, and providing an association to assess the cost of that protection among insurers. None of the other funding sources named in the choices appears in that purpose statement.

Answer: A. Authorized insurers, placing basic property applications for qualified property already inspected

Section 4106 provides that authorized insurers establish the industry placement facility, which designs and runs a program to distribute and place, on an equitable basis, applications for basic property insurance on qualified property that has been inspected. The section may allow separate classifications for that distribution. It assigns the facility to authorized insurers, so the Commissioner, the inspection bureau and licensed producers are the wrong bodies. It is also limited to basic property insurance on qualified, inspected property, so a facility handling every property application or any twice-refused property overstates its reach, and the section sets no single statewide rate.

Answer: D. Kim, who was let go involuntarily and jobless four months

Among the events for which an insurer using credit information must, on written request, provide reasonable exceptions is a temporary loss of employment that lasts 3 months or more and results from involuntary termination. Kim meets both conditions. Lee's layoff was involuntary but lasted only six weeks, and Dana and Sam left work by their own choice, so none of them fits the listed employment event.

Answer: D. The insured's annual household income for the year of the loss

Sec. 1754(a) requires a public adjuster to keep a complete record of each transaction that includes at least the insured's name; the date, location and amount of the loss; a copy of the adjuster's contract with the insured; the insurer's name and the amount, expiration date and number of each policy involved; an itemized statement of the insured's recoveries; and an itemized statement of all compensation the adjuster received on the claim. The insured's household income is not on that list.

Answer: A. Sufficient experience and training in adjusting first-party property loss claims, as judged by the Commissioner

Sec. 1751(b) directs the Commissioner to issue a public adjuster license to an applicant who passes a written examination and who has enough experience, training and instruction in adjusting first-party claims on policies covering the insured's real or personal property, as the Commissioner determines. An insurer appointment, a set period of prior producer work and a supervising adjuster's written certification do not appear among the conditions that Sec. 1751(b) lists.

Answer: C. The named insured failed to pay the premium owed on the policy.

Once a policy has been in force more than 60 days, or once a renewal has taken effect, the insurer may issue a cancellation notice only for a reason the statute lists, and nonpayment of premium is the first reason on that list. A decision to write less business in a county, a single covered claim, and an agent's departure are not listed reasons, so none of them supports a cancellation at five months.

Answer: A. It must be expeditious, fair and impartial, and the examiners must observe the NAIC Examiner's Handbook

Each examination must be conducted in an expeditious, fair and impartial manner. Once an examination is decided on, the Commissioner or a designee issues an examination warrant that appoints the examiners and instructs them on its scope, so examiners do not start without one or set the scope themselves. Examiners must observe the guidelines and procedures in the NAIC Examiner's Handbook, and the Commissioner may also use other guidelines or procedures the Commissioner considers appropriate, which is why the Handbook is not exclusive. The procedures come from the Handbook and the Commissioner, not from the company being examined.

Answer: A. By adopting the adjuster definition in the general licensing definitions of Sec. 1702

Sec. 1750(1) states that, for Sections 1750 through 1761, an adjuster means an adjuster as defined in Sec. 1702. Sec. 1702 describes an adjuster as a licensee who investigates or negotiates settlement of insurance claims, working as or for an independent contractor, insurer, self-insurer, producer or managing general agent. Acting for the insured on first-party property claims describes the separately defined public adjuster in Sec. 1750(4), and assessing motor vehicle damage describes an appraiser in Sec. 1702(3). The term is defined by statute, not left to regulation.

Answer: C. Make the files freely available to the examiners and help the examination proceed

Sec. 320(c) places the duty on the person examined and also on its officers, attorneys, employees, agents and representatives: they must make freely available to the Commissioner or the examiners the records and files in their possession or control that relate to the subject of the examination, and they must facilitate the examination. The section sets no subpoena precondition, gives the board no power to filter what is produced, and does not limit examiners to summaries.