Free Kentucky Casualty practice questions

Answer: C. The person must have acted with intent to deceive when circulating the false statement

The provision applies to any person, not only to insurers or their officers, and reaches filing a false statement of an insurer's financial condition with a public official as well as publishing, circulating or delivering one to any person or to the public. The element it adds is intent to deceive. Nothing in it confines the prohibition to officers or directors, requires that the statement first be filed with the commissioner, or requires that anyone relied on the statement and lost money.

Answer: D. 24 hours, including 3 hours of ethics

Kentucky requires a non-exempt agent licensee to complete at least 24 hours of approved continuing education in each biennium, and 3 of those hours must concentrate on ethics. Twelve hours falls short of the statutory minimum. Thirty hours with 6 of ethics overstates both figures. Twenty-four hours with no ethics component is wrong because the statute carves 3 ethics hours out of the 24.

Answer: B. A consultant license for the casualty line of authority

Kentucky's licensure section requires a consultant license to act as a consultant at all. It then adds that a consultant may act on a given kind of insurance only when licensed as a consultant for that line of authority. A life-only consultant license therefore does not reach casualty work. The license is tied to the line of authority, so it does not cover every kind of insurance. An agent license and appointment is what the same section requires before an agent places insurance with an insurer, which is a different activity from consulting. A signed engagement letter is not a substitute for the license the statute requires.

Answer: D. Restitution of $450

Paragraph (p) reaches two kinds of misdemeanor: one involving dishonesty, breach of trust, or moral turpitude, and one for which restitution is ordered in excess of $300. Because this conviction involves none of the listed qualities, only the restitution branch can apply, and $450 is more than $300. Restitution of exactly $300 is not in excess of $300, so it falls short. Restitution of $150 is below the threshold. A jail term with no restitution order does not satisfy the restitution branch of paragraph (p).

Answer: B. It is deemed to include Kentucky basic reparation benefits and minimum tort liability security

KRS 304.39-100(2) requires an insurer authorized in Kentucky to file a form declaring that its contracts of motor vehicle liability insurance, wherever issued, are deemed to provide the basic reparation benefits coverage and minimum tort security the subtitle requires while the vehicle is in Kentucky. Because the declaration applies wherever the contract was issued, the Indiana issue does not confine the policy to its printed terms, and the statute attaches no Kentucky-registration condition. A contract covering only liability above the required minimum is the exception to the declaration, not the trigger for it. Motorcycles are also outside the declaration, which is why the stem specifies a private passenger car.

Answer: C. Private passenger automobile liability insurance

KRS 304.36-030(2) applies Subtitle 36 to all kinds of direct insurance except those it lists. Title insurance, ocean marine insurance (which subsection (1) defines to include hull and machinery coverage) and mortgage guaranty insurance all appear among the exceptions. Automobile liability insurance is not among them, so it falls within the subtitle's scope.

Answer: C. Class C felony

KRS 304.47-020(2) grades the offense by the aggregate amount of the claim, benefit or money involved: a Class A misdemeanor below $500, a Class D felony from $500 to under $10,000, a Class C felony from $10,000 to under $1,000,000, and a Class B felony at $1,000,000 or more. A $25,000 claim falls in the $10,000 to under $1,000,000 band, so it is a Class C felony. The misdemeanor and Class D grades apply only to smaller amounts, and the Class B grade requires $1,000,000 or more.

Answer: B. The insured previously obtained auto coverage through a residual market mechanism

KRS 304.20-040(4) bars an insurer or agent from declining, nonrenewing or canceling an automobile policy solely because the applicant or insured previously got auto coverage through a residual market mechanism or from a nonstandard carrier. The other three choices describe grounds that subsection (2)(a) expressly allows as reasons for cancellation: nonpayment of premium, suspension of the named insured's driver's license during the policy period, and material misrepresentation by the named insured in obtaining the policy.

Answer: C. One year from when the cause of action accrues

KRS 304.14-370 bars any condition, stipulation or agreement in an insurance contract from limiting the time to sue a foreign insurer to less than one year from when the cause of action accrues. It also bars contract terms that would deprive Kentucky courts of jurisdiction over actions against foreign insurers. Six months and sixty days fall below that one-year floor, and the statute measures the period from accrual of the cause of action, not from the policy's effective date, and sets no two-year minimum.

Answer: A. It must sign on to the plan and stay a signatory as a condition of its authority

KRS 304.13-151(6) makes becoming and remaining a signatory to the Kentucky automobile insurance plan a condition of an insurer's authority to write casualty insurance in Kentucky, and it deems the plan a mandated residual market mechanism. Because the duty attaches to the authority itself, it does not depend on a premium-share threshold, it is not voluntary, and it is not triggered by an assessment following an insolvency.