Free Kansas Property & Casualty practice questions

Answer: A. The Kansas automobile injury reparations act

The act's citation section states that it may be cited and is known as the Kansas automobile injury reparations act, often shortened to KAIRA. None of the other titles is the name the statute gives itself. The Kansas automobile insurance plan is a separate arrangement for applicants who cannot obtain auto liability coverage through ordinary methods, not the name of this act.

Answer: C. 60 days

When an insurer denies renewal of, or substitution of similar coverage for, a property or casualty policy used primarily for business or professional needs, Kansas requires at least 60 days' written notice of its intention not to renew. The notice goes to the named insured at the last known address, and the insurer may meet the duty by having a licensed agent give it. Ten and 30 days fall short of the required minimum for a business policy, and 90 days is more than this section requires.

Answer: C. The member insurers that have voluntarily elected to participate

The FAIR plan act exists to make basic property and casualty insurance available to people with property interests in Kansas who are entitled to it in good faith but cannot get it in the voluntary market. It directs the plan to distribute and place those risks equitably among the member insurers that have voluntarily elected to participate. Because participation is described as a voluntary election, it is not framed as a license condition for every property insurer, and nothing in the section places the risks with the state or the Department or limits them to insurers that declined the applicant.

Answer: C. The Commissioner, or a disinterested person the Commissioner appoints, must examine the company

Under Kan. Stat. Ann. Sec. 40-208, once a company organized under Kansas law has fulfilled the code's conditions precedent and notified the commissioner, the commissioner must examine it, or have a disinterested person appointed for that purpose do so, before issuing any certificate of authority. The company's corporators or officers must also certify under oath to the examiner that the money, notes, securities and other obligations shown are the company's bona fide property. The section calls for no operating period, no other state's examination report and no certification to the Secretary of State before the certificate issues.

Answer: D. Conducted a reasonable investigation that takes in all the information available

Kansas lists, among unfair claim settlement practices, refusing to pay claims without conducting a reasonable investigation based on all available information, when done flagrantly and in conscious disregard of the law or often enough to indicate a general business practice. Routinely denying claims without looking at the photographs and estimates the insureds supplied ignores information that was available. The provision does not call for a sworn proof of loss or examination under oath, prior review by the Commissioner, or an independent adjuster; its measure is a reasonable investigation of all available information.

Answer: C. A general liability policy for a retail clothing store

Kansas lets insurers raise or lower premiums on a given risk by up to 40% without documentation, based on any factor other than race, creed, national origin or religion. The variance cannot be used on personal risks such as homeowners coverage, on farms and ranches including crop insurance, or on workers compensation. A commercial liability policy for a retail store is outside those exclusions, so a 30% loss-based adjustment is allowed.

Answer: C. It must be recognized and medically accepted, whether or not surgery is involved

K.S.A. 40-3112(a) requires that a rehabilitation procedure or treatment be recognized and medically accepted, and it applies that standard whether or not surgery is involved, so surgery is neither required nor excluded. The section's other standards concern training, a substantial contribution to rehabilitation, and reasonable cost. None of them calls for advance approval by the commissioner or limits where the provider is located.

Answer: D. The hearing proceeds, and it is unaffected by the insurer's failure to attend.

K.S.A. 40-281(a) authorizes fact-finding hearings on any matter relating to the business of insurance, requires reasonable notice stating time, place and purpose, allows that notice to be sent by registered mail, and provides that a hearing held on such notice is unaffected when a party fails to attend or stay. Because registered mail is expressly permitted, the notice was not defective, and the subsection requires neither personal service nor a new notice before going ahead. A court order is not a precondition to holding the hearing under this subsection.

Answer: D. A concerted boycott tending to cause unreasonable restraint of insurance business

It is an unfair method of competition to agree to commit, or to commit through concerted action, a boycott, coercion, or intimidation that results in, or merely tends to result in, unreasonable restraint of the business of insurance. The agencies' joint refusal to place business is a boycott by agreement. Because conduct that only tends toward the restraint is enough, the section does not require proof that the insurer actually lost premium. Its text contains no requirement of a prior criminal conviction, and it does not depend on publicizing the agreement.

Answer: D. 18 years of age

Before approving a resident producer application, the commissioner must find, among other things, that the applicant has reached 18 years of age. An applicant younger than that falls short of the minimum, and the other ages offered are not the minimum Kansas sets.