Free Georgia Property & Casualty practice questions

Answer: C. The required coverage does not apply, because a written rejection by any named insured is enough.

Paragraph (a)(3) makes the required uninsured motorist coverage inapplicable where any insured named in the policy rejects it in writing. Dana is a named insured and rejected in writing, so the coverage required by paragraph (1) does not apply to the policy. The paragraph says any named insured, not every named insured, so Lee's signature is not needed. It mentions no review by the Commissioner, and it does not divide the rejection so that coverage survives for a named insured who did not sign.

Answer: C. $50,000

Sec. 33-7-11(j) makes an insurer that refuses in bad faith to pay within 60 days of the insured's demand liable, in addition to the recovery, for up to 25 percent of the recovery or $25,000.00, whichever is greater, plus reasonable attorney's fees. Twenty-five percent of $200,000 is $50,000, which is greater than $25,000, so $50,000 is the cap. The $25,000 figure governs only when it is the larger of the two, $75,000 wrongly adds the two figures together, and $100,000 is half the recovery, a share the statute does not use.

Answer: C. The supervising resident agent's name and Georgia license number

The resident temporary license rule lists what the application process must include: insurer sponsorship (unless the applicant seeks a temporary hardship license), electronic fingerprints for new applicants, and the name and license number of the resident agent who will supervise the temporary licensee. A bond, proof of a completed prelicensing course and a passing examination score are not among the listed elements. Course completion and a passing examination are what lead from the temporary license to a regular agent license under the same rule.

Answer: B. 15 percent

Sec. 34-9-133(e) gives the Commissioner of Insurance discretion to waive some or all of the Plan's policy assessments and surcharges when the Plan's operating deficit for a Plan policy year improves by at least 15 percent, measured against the deficit for that year calculated on the rates in effect for the preceding Plan policy year. The subsection does not use 5, 10 or 25 percent as its threshold.

Answer: A. File for license renewal on or before the required date

The rule exempts an agent holding a nonactive license from continuing education, provided the agent files for renewal on or before the required date, and the exemption is valid only while the license remains nonactive. Nothing in this exemption requires the agent to complete Ethics hours. A professional designation relates to a separate reduction in the same rule, not to the nonactive exemption. The rule sets no minimum length of nonactive status; the exemption applies during the nonactive period.

Answer: A. The insured tenders, and the insurer must accept, a 30 day pro rata share of the premium

Rule 120-2-53-.04 provides that during the review of a cancellation or nonrenewal the insured tenders, and the insurer accepts, a 30 day pro rata portion of the premiums that applied to the policy when the cancellation or nonrenewal was issued. The rule sets 30 days, not 60, and makes acceptance mandatory rather than optional for the insurer. It calls for a tender to the insurer, not payment of the full annual premium into escrow with the Commissioner, and it does not excuse the insured from paying during the review.

Answer: A. Preventing or limiting access to the premises

The list in O.C.G.A. Sec. 33-33-8(d) includes prevention or limitation of access to the premises among the emergency property protection measures the Commissioner may require during temporary coverage. A surety bond, a higher deductible and added liability coverage are financial or coverage terms, and none of them appears among the measures the subsection lists.

Answer: C. The Commissioner directs the association to cover the county on a temporary basis.

Under O.C.G.A. Sec. 33-33-8(b), when a local public entity appealing an adverse underwriting decision of the association faces a cancellation or expiration of its coverage during the appeal, the Commissioner is required to direct the association to provide coverage on a temporary basis, on the terms that Code section sets out. A county is one of the local public entities the section covers. The section places the obligation on the association, at the Commissioner's direction. It imposes nothing on the county's current insurer, it does not suspend the appeal, and it does not make the temporary coverage depend on the association's board judging the appeal likely to succeed.

Answer: D. Its count of lost-time claims in the latest one-year period with available statistics

Sec. 34-9-133(j)(2) bases the merit rating plan on the number of lost-time claims the policyholder had during the most recent one-year period for which statistics are available, which is the period that would otherwise be used for experience rating purposes. The plan counts lost-time claims rather than dollars paid or a loss ratio, and it looks at one year rather than three or five years or the current policy term.

Answer: B. The notice must state every reason for the action specifically and in clear, plain language

Rule 120-2-53-.03(1)(c) requires a notice of cancellation or nonrenewal to state specifically any and all reasons for the action, in clear, easy to understand language. A label such as 'underwriting reasons' that leaves out the three reasons actually relied on fails that requirement. Because the rule reaches all reasons, one principal reason is not enough, and because it calls for clear, easy to understand language, the insurer's technical terms are not what it asks for. The nonrenewal form does mention reasons furnished on request, but paragraph (1)(c) separately requires the notice itself to state them, so waiting for the insured to ask does not satisfy the rule.