Free Massachusetts Property practice questions

Answer: B. The board of directors of the reinsurer it represents

A reinsurance intermediary manager may represent a reinsurer only under a written contract that the reinsurer's board of directors has approved. The commissioner's role is different: a true copy of the approved contract must be filed with the commissioner at least thirty days before the reinsurer assumes or cedes business through the manager, which is a filing rather than an approval. The section gives the approval to the board, not to the shareholders. Ceding insurers are given no approval role in the section.

Answer: A. The names of the insurers that have appointed the licensee

Section 162M(e) requires the license to show the licensee's name, address and personal identification number, when it was issued, when it expires, and the lines of authority it grants, plus anything else the commissioner considers necessary. The names of insurers that have appointed the licensee are not among the items the section lists.

Answer: D. 1 year after issuance

Section 168(b)(i) provides that a special insurance broker license, which allows a suitable person to negotiate, continue or renew eligible coverage with unauthorized companies, expires 1 year from its date of issuance unless it is suspended or revoked before then. Section 168 sets no 2, 3 or 5 year term for this license.

Answer: D. For two years from receipt, along with a record of its disposition

Section 3(10) requires agents, brokers and adjusters to keep any written communication they receive that expresses a grievance for two years from receipt, together with a record of its disposition, available for the commissioner's examination at any time. A one-year period without a disposition record falls short on both counts. The ten-year figure does not appear in section 3(10). Retention does not end at the insurer's next examination; the two-year period runs from the date the broker receives the communication.

Answer: B. Five years after the date they are issued

Sec. 48 allows options or warrants to go to promoters only at original issue and only on stated conditions, one of which is that they cannot be exercised more than five years after the date of issuance. One, three and ten years are not the period in that condition. The number ten does appear in the same paragraph, but as a percentage cap on the shares the options may cover, not as a time limit.

Answer: D. 15 days

Section 162T(d)(1) requires the insurer, within 15 days after making its termination notification to the commissioner, to mail a copy of that notification to the producer at the producer's last known address. When the termination is for cause under section 162R, the copy must go by certified mail with return receipt requested, or by overnight delivery through a nationally recognized carrier. The 5-day, 10-day and 30-day figures are not the mailing period this paragraph sets.

Answer: B. At least 7 percent

Under chapter 175C, section 1, the association must have written at least 7 percent of the territory's homeowners premium, measured as an average of the most recent 3 calendar years, for the territory to be a large share territory, with the exact percentage fixed each year. Twenty percent is the threshold for a different defined term, the credit eligible territory. The 4 percent figure is a historical benchmark inside the same definition, tied to territories where the association's market share reached that level in the 3 years immediately before 1996. Thirteen is the cap on how many large share territories may be designated in a year, not a premium share.

Answer: A. A fine of not more than $50,000

Section 18(b) lists the penalties available when a person violates a cease and desist order issued under section 17. Where the commissioner finds the violations frequent enough to constitute a general business practice, section 18(b)(2) permits a fine of up to $50,000. The $1,000 figure belongs to section 18(a), a per-violation penalty for a knowing violation of the chapter found at a section 15 hearing, not a cease and desist violation. Neither $5,000 nor $100,000 is a ceiling that section 18 sets.

Answer: C. Pay or tender the full return premium owed under its terms, with no deductions

Section 187C says a company effects cancellation by serving the notice the policy provides and by paying or tendering the full return premium due under the policy's terms without any deductions, and a check from the company or its authorized agent counts as a sufficient tender. Subtracting a processing charge is a deduction the section forbids. Section 187C makes separate provision for a policy that itself provides for return premium when ascertained or upon demand, and this policy has no such provision, so waiting for a demand does not satisfy the section here. Crediting the money toward a future policy is neither payment nor tender.

Answer: D. Three years from the date of issue

Section 177O(D)(1) provides that a reinsurance intermediary license issued to a qualifying individual expires three years from its date of issue unless sooner revoked or suspended, and the commissioner may renew it for successive three-year periods. The one-year period in that section applies to a license issued to a partnership, firm, association or corporation, so it does not fit an individual licensee. Neither two years nor five years is a term the section sets.