Free Minnesota Casualty practice questions

Answer: C. $20,000 for medical expense and $20,000 combined for income loss and the other listed losses

Section 65B.44 sets the per-person minimum at $40,000, made up of $20,000 for medical expense loss and a combined $20,000 covering income loss, funeral expense loss, replacement services loss, and the two survivor's loss categories. The minimum is therefore split into two equal halves. Each of the other answers misstates that split by moving money between the medical portion and the combined portion.

Answer: D. Two 200-word samples per page, with the samples separated by at least 20 printed lines

Section 72C.09, clause (1) requires the whole contract to be analyzed when it contains 10,000 words or fewer of text. For a longer contract, such as this 14,000-word policy, the readability of two 200-word samples from each page may be analyzed instead, and those samples must be at least 20 printed lines apart. A sample from only every second page, a single passage from selected sections, and 100-word samples all depart from the method the clause permits.

Answer: D. An unfair method of competition and an unfair and deceptive practice

Minn. Stat. Sec. 72A.20, subd. 1 treats a misrepresentation to someone insured with any company, made to induce or tend to induce that person to lapse, forfeit or surrender the coverage, as an unfair method of competition and an unfair and deceptive act or practice. Because the provision reaches statements that merely tend to induce a surrender, the homeowner does not have to drop the policy for the statement to be prohibited. Its reference to a policyholder insured in any company covers a client of another insurer, so the conduct is not lawful competition. This clause is written for any policyholder, so it is not limited to life insurance.

Answer: B. Chapter 60K generally does not apply, but the broker must still hold a producer license

Minnesota's producer licensing chapter states that it does not apply to surplus lines agents or brokers licensed under the surplus lines statutes, with two kinds of exception. The first is the underlying requirement that such a broker obtain an insurance producer license. The second is the specific provisions the section names, Sec. 60K.39 and Sec. 60K.53, subd. 2. So the broker still needs a producer license, while the rest of the chapter does not govern the broker. Saying the chapter applies in full ignores the exclusion. Saying the broker is wholly exempt ignores the preserved license requirement. Saying the chapter replaces the surplus lines statutes reverses the rule, because the chapter steps aside for brokers licensed under those statutes.

Answer: A. No; the bar on accepting covers service fees, not only commissions

Minnesota bars a person who is required to be licensed under the producer licensing chapter, and is not, from taking compensation of any kind, whether called a commission, service fee, brokerage, or other valuable consideration, for selling, negotiating, or soliciting insurance in the state. The prohibition binds the person accepting, separately from the rule addressed to payers, and relabeling the money as a service fee leaves it inside the statute. The ban turns on licensure, so an appointment does not change the result for someone who is unlicensed.

Answer: D. Boldface type of at least ten points, plus an attached form in duplicate

Before the contract is made, a Minnesota public adjuster must give the insured a boldface statement, in type no smaller than ten points, explaining the right to cancel within 72 hours after signing. The adjuster must also furnish the insured a fully completed notice of cancellation form in duplicate, attached to the contract and easily detached, likewise in boldface type of at least ten points. Twelve points is not the stated minimum, and the statute calls for a duplicate form furnished to the insured rather than one form held by the adjuster. Ordinary type or an oral reading does not meet a requirement written in terms of a printed boldface statement and form.

Answer: B. The program must provide 20 hours for each major line sought, so 40 hours in total for the two lines.

Minnesota requires a commissioner-approved program of studies, by classroom study, verifiable self-study, or both, and the program must provide 20 hours for each major line of authority the applicant is seeking. Two major lines therefore call for 40 hours, so a single 20-hour program falls short. A course that an insurance company or its producers sponsor, offer, or are affiliated with does not qualify, which rules out the appointing insurer's course. The examination may be given only after the program is completed, so testing first is not permitted.

Answer: C. It must notify the commissioner within 30 days after the termination takes effect.

Minnesota requires an insurer that terminates a producer's appointment, employment, or contract for a reason other than the grounds listed for license discipline to notify the commissioner within 30 days following the effective date of the termination. So a termination without cause is reported too, not only one for cause. The notice is owed regardless of any request; a written request from the commissioner is what triggers the insurer's duty to supply additional information about the termination. Ninety days is not the period the statute sets.

Answer: B. She has a right to basic economic loss benefits since the crash was in Minnesota

For an accident in Minnesota, section 65B.46, subdivision 1 gives a right to basic economic loss benefits to every person suffering loss from injury arising out of the maintenance or use of a motor vehicle, and it separately names a person struck as a pedestrian by a motorcycle. Because the provision names the motorcycle and pedestrian case on its own terms, the answer denying a right because of the vehicle type misreads it. The right belongs to every such person, so it does not depend on Dana owning an insured vehicle. The provision also attaches the right to the injury and loss, with no requirement that anyone be proven at fault.

Answer: B. Reparation obligors that provide basic economic loss insurance in Minnesota

Section 65B.63, subdivision 1 places the duty on reparation obligors providing basic economic loss insurance in the state, subject to the commissioner's approval and regulation, and requires every such obligor to participate. The commissioner organizes and maintains the bureau and plan only if the obligors fail to do so in a manner consistent with the act, so the commissioner does not run them in every case. The bureau's governing committee has four members chosen by insurer members and one chosen by self-insurer members alongside two public members appointed by the governor, so it is not a public-only body. Section 65B.63 assigns the organizing duty to reparation obligors, not to the automobile insurance plan.