Free Illinois Casualty practice questions

Answer: D. The company or person that is the subject of the examination

Section 402(1) allows the Department, when needed to supplement its examination procedures, to retain outside help such as independent actuaries or certified public accountants, and it places the cost of that help on the company or person being examined. Section 402(1) does not assign that cost to the Department's budget, to the company's policyholders, or to a legislative appropriation.

Answer: B. It is prohibited, because the section covers verbal statements and misleading dividend estimates.

Section 149(1) bars any person, including an agent, from making or circulating a verbal or written statement that misrepresents a policy's terms or benefits, and it names a misleading estimate of dividends expressly. An oral projection the agent knows is misleading is therefore prohibited. The view that only printed material is reached fails because the section covers verbal statements. The view that a dividend projection is mere opinion fails because misleading dividend estimates are listed by name. The section's text contains no element of reliance or purchase by the prospect.

Answer: D. Pat's entire $3,000 collision loss claim, including the $500 deductible amount

Under 215 ILCS 5/143b, a collision insurer that reduced its payment by a deductible is subrogated to the insured's whole collision loss claim, deductible included, unless the insured has already recovered the deductible some other way. Here that is the full $3,000, so the insurer does not stop at the $2,500 it paid and leave Pat to chase the $500. When the deductible is part of the subrogated claim, the insurer must pay Pat the full pro rata deductible share out of the net recovery, and when it collects in installments Pat receives that share as soon as it is collected and before the money goes to any other use, so the insurer cannot hold everything until its own payment is repaid. The insurer's administrative expenses also cannot be taken out of the gross recovery.

Answer: B. As though written for successive policy terms of 6 months each

Under Section 143.13(d), a policy with a term shorter than 6 months, or with no fixed expiration date, is considered written for successive 6-month periods, both for the meaning of renewal and for the Section 143.17 nonrenewal notice. A 3-month policy therefore takes 6-month deemed terms rather than 12-month terms. The definition does not let the short term stand on its own, and it does not treat the policy as a single unrenewed term.

Answer: B. No, mass-media advertising with no intent to solicit in Illinois is exempt

Illinois exempts from producer licensing a person whose activity in the state is limited to advertising, without intent to solicit in Illinois, in printed publications or electronic mass media whose distribution is not limited to Illinois residents, so long as the person does not sell, solicit or negotiate insurance on Illinois risks. The national magazine fits, so reaching Illinois readers does not trigger a license, and no registration step is part of the exemption. Distribution confined to Illinois residents would take the advertising outside the exemption, not inside it.

Answer: C. Replacement of a child restraint system in use by a child during a covered crash

215 ILCS 5/143.32 requires a policy of automobile insurance to cover replacement of a child restraint system that a child was using during a crash to which the policy's coverage applies. The requirement turns on the seat being in use in a covered crash; the statute does not make replacement depend on the child being injured. What it requires is replacement coverage, not a purchase discount, and it reaches a seat in use during a covered crash rather than the purchase of a seat when no crash has occurred.

Answer: C. No, a certificate may not warrant that the policy meets a contract

Section 155.45(f) prohibits a certificate of insurance from containing a warranty that the referenced policy complies with a contract's insurance or indemnification requirements. Printing the contract number does not change the answer: the section says a contract number or description on a certificate is not itself a warranty of compliance, and it still forbids the warranty statement. The section makes no allowance for a producer's review of the contract or for insurer approval of the wording.

Answer: C. 90 days

Section 500-25 requires a resident individual seeking a producer license to pass the written examination, unless exempt, and both parts of that examination must be passed within 90 days of each other. The section sets no 30-day, 60-day or 180-day window for the two parts.

Answer: C. $100 for each day

Section 401.1(6)(a) allows a forfeiture not to exceed $100 for each day the violation or failure to comply continues. The same paragraph caps the total at $5,000, so $5,000 is the overall maximum, not a daily amount. Neither $500 nor $1,000 is a figure Section 401.1(6)(a) uses.

Answer: D. A reasonable and accurate explanation of the policy or legal basis for the offer

Section 154.6(n) lists, as an improper claims practice, failing to promptly give a reasonable and accurate explanation of the basis in the policy or applicable law when the insurer denies a claim or offers a compromise settlement. The duty therefore reaches a compromise offer as well as an outright denial. Section 154.6(n) does not require the insurer to hand over its claim file, offer arbitration, or refund premium; what it requires is the explanation of the basis.