Free Maryland Property practice questions

Answer: D. They are terminated as of June 30, the same day the license expired

Under Md. Code Ann., Ins. Sec. 10-115(a)(2), when a license expires under the every-other-year rule, the producer's appointments are terminated as of the day of expiration, here June 30. The statute gives no 30-day carryover, does not wait for insurers to file terminations, and does not hold the appointments in suspension for later revival. Because no renewal application was filed, the rule that keeps a license in effect while a timely renewal is pending does not apply.

Answer: C. It is a condition of license renewal, subject to the exemptions the section lists

Md. Code Ann., Ins. Sec. 10-116(a)(1) directs the Commissioner to require producers to receive continuing education as a condition of renewing their licenses, subject to the exemptions in subsection (b) and the nonresident rule in subsection (c). It is tied to renewal, not to first issuance of a license. It is a requirement the Commissioner imposes, not an option left to insurers. The requirement applies to insurance producers generally, and the same section sets specific topics for property and casualty producers, such as those who sell flood insurance.

Answer: C. An offer to give more supporting information on written request, plus an address for it

Under Sec. 27-605(b)(3), when an insurer cancels or nonrenews a commercial policy for a reason other than nonpayment, its statement of the actual reason must also offer to provide additional information supporting the action if the insured asks in writing, and must give an address where the insured can send that request. The section does not require the insurer to enclose its underwriting standards or a quotation from an affiliated insurer. The only 15-day figure in the section is the insurer's deadline to answer, in writing, a request for more information received before the action takes effect; it does not create a hearing right for the insured.

Answer: B. Holding up a clear claim under one part of a policy to sway settlement of another part.

Among Maryland's unfair claim settlement practices is failing to settle a claim promptly when liability under one part of a policy is reasonably clear, in order to influence settlements under other parts. Delaying the clear collision payment for leverage on the disputed medical payments claim is that practice. The statement-of-coverage requirement concerns what must accompany a paid claim, and no payment has been sent here. No facts or policy provisions are misrepresented in the scenario. No denial has been issued, so the duty to explain a denial on request is not the issue.

Answer: C. No, because paying the producer bars a nonpayment cancellation

Maryland bars an insurer from canceling a policy for nonpayment of premium when the premium due has been paid to the insurance producer. The insured here paid the producer in full, so the insurer may not cancel for nonpayment even though the money was never forwarded. The statute gives the insurer no right to demand a second payment after a grace period, and it does not depend on how long the producer has been appointed.

Answer: A. A document the Commissioner issues authorizing producer activity in the kinds of insurance it specifies

The subtitle defines a license as a document from the Commissioner that authorizes a person to act as a producer in the kind or subdivision of insurance, or combination of them, named in the document. A limited lines license is also a license under the definition. Because the Commissioner is the issuer, a document from the appointing insurer does not fit the definition, and because the license is tied to the kinds of insurance it names, it does not reach every kind of insurance sold in Maryland. The definition names the Commissioner, not an advisory board, as the issuer.

Answer: C. A subsidiary that is owned or controlled by an authorized insurer

Section 2-205(b)(1) names five kinds of entity: an authorized insurer, a management company of an authorized insurer, a subsidiary an authorized insurer owns or controls, a rating organization, and an authorized health maintenance organization. A subsidiary owned or controlled by an authorized insurer is therefore on the list. An appointed producer, a complaining consumer, and an outside auditing firm are not among the five entities this paragraph names.

Answer: B. The Commissioner is to order the person to cease and desist, since past engagement is covered

Section 27-103(a)(1) applies once the Commissioner finds that someone in the State has engaged, or is engaging, in conduct that Title 27 defines or prohibits, and it says the Commissioner shall order that person to cease and desist. Because the provision covers a person who has engaged in the practice, the fact that the conduct has stopped does not remove the duty. The paragraph sets no condition that the practice resume, and the order is the Commissioner's to issue rather than a court's, although a court acts on it if an appeal is taken.

Answer: B. October 31

For a personal policy, Sec. 27-602(c)(1) requires written notice of intention not to renew at least 45 days before expiration, sent by a first-class mail tracking method to the named insured's last known address. Forty-five days before December 15 is October 31, so that is the latest compliant mailing date. December 5 reflects the 10-day period that Sec. 27-602(d) sets for cancellation for nonpayment of premium, which is a different notice. November 15 gives only 30 days. September 16 would satisfy the minimum, but it is 90 days out and is not the latest date that complies.

Answer: B. The applicant's blindness

Sec. 27-501(a)(1) names race, color, creed, sex and blindness as forbidden bases for canceling, refusing to underwrite or refusing to renew a risk, and it also bars any arbitrary, capricious or unfairly discriminatory reason. Blindness is on that list. Age, occupation and length of residence at an address are not among the characteristics the paragraph names.