Free Minnesota Property & Casualty practice questions

Answer: B. Tell the insured the name and address of the person who made the report

Minn. Stat. Sec. 65B.19, subd. 1 provides that an insurer may take action on an automobile policy based on another person's statements or charges about an insured's allegedly unsafe driving habits only if it concurrently discloses to the insured the name and address of the person who supplied the information. The required step is disclosure of the source to the insured. The subdivision imposes no duty to check the driving record first, makes the disclosure independent of the informant's consent, and requires no report to the commissioner.

Answer: C. The agent cannot bind; the plan issues a policy if preliminary underwriting is met

Section 65A.36, subdivision 1, states that agents are not permitted to bind coverage under the Minnesota FAIR plan. Instead, the plan itself issues a policy when the risk meets its preliminary underwriting requirements. The prohibition is stated without qualification, so no temporary binding period, payment of premium, or completed inspection report gives the agent binding authority.

Answer: D. End the appointment immediately and notify the commissioner of the termination.

Misappropriating money received in the course of insurance business is one of the activities listed as a cause for license discipline. When an insurer discovers that an appointed producer has engaged in such an activity, or is otherwise unqualified or unfit, Minnesota requires the insurer to terminate the appointment immediately and notify the commissioner. The duty does not wait for the commissioner to revoke the license, so delaying until then is not compliance. Supervision by a sponsor is not an alternative to termination under this rule. Waiting until the next renewal date is not immediate.

Answer: B. It is valid, and it is treated as including the terms of the standard fire policy

A binder or other contract of temporary insurance may be made orally as well as in writing, and it is deemed to include all the terms of the Minnesota standard fire insurance policy plus any applicable endorsements the binder designates. So the phone binder is valid without a writing, and its terms are not confined to what the producer said aloud. The binder may also override the standard policy's clause fixing the hour coverage starts, so a binder stated to be effective immediately is not pushed to 12:01 a.m.

Answer: A. They now apply, because the pre-July 1, 1980 exclusion ends once the parties amend the policy by mutual agreement

Section 72C.03 keeps a policy issued before July 1, 1980 outside sections 72C.01 to 72C.13 when the insurer holds no unilateral right to cancel, nonrenew, amend, or change it, but that exclusion lasts only until the parties amend or change the policy by mutual agreement. The 2026 mutual amendment therefore ends the exclusion, so the issue date alone does not keep the policy outside the sections. The exclusion is lifted by a change the parties agree to, not by the insurer gaining a unilateral right. A group master contract covering ten or more persons is itself excluded by the same section, so converting to one could not bring a policy within these sections.

Answer: C. Until all fines imposed are paid, and for one year after that

Minn. Stat. Sec. 72A.02 adds a disqualification to the criminal penalties: a company that issues a policy in willful violation of the law may not do insurance business in Minnesota until every fine imposed has been paid, and then for one more year. Paying the fines does not end the disqualification by itself, because the extra year still has to run. A one-year period counted from the violation ignores the requirement that the fines be paid first, and the statute sets no two-year period.

Answer: A. A one-wheeled trailer while it is being towed by a registered passenger car

The act defines a motor vehicle as a vehicle with at least four wheels that must be registered under chapter 168 and is designed to be engine-powered mainly for use on public roads. The definition also includes a trailer with one or more wheels when it is connected to or towed by a motor vehicle, so a one-wheeled trailer being towed by a registered car fits. The three-wheeled vehicle fails because the definition excludes any vehicle with fewer than four wheels, whatever its registration. The unhitched trailer fails because a trailer counts only while connected or being towed. The off-road vehicle fails because it is not required to be registered and is not designed primarily for public roads.

Answer: A. Within 15 days after that first application is submitted to the insurer.

A licensed Minnesota producer may not do business with an insurer unless the producer has been appointed by it, or has the insurer's permission to transact business for it and obtains an appointment within 15 days after the first application is submitted. The clock runs from submission of the first application, not from issuance of a policy. Thirty days and ten days are not the period this rule sets for the producer's appointment.

Answer: B. The commissioner may fine the insurer without showing a general business practice

Minn. Stat. Sec. 72A.201, subd. 1 allows the commissioner to seek and impose administrative remedies, including fines, for a violation of the section or its rules, and states that the commissioner need not show a general business practice when taking that action. Requiring proof of a general business practice first is therefore wrong. The same subdivision says no individual violation constitutes an unfair, discriminatory or unlawful practice for purposes of section 8.31, so a single violation is not automatically one. The subdivision itself authorizes the commissioner to seek and impose these remedies, so the power is not reserved to a court.

Answer: C. The commissioner

Minnesota's examination section requires that the examinations it calls for be approved by the commissioner. The same subdivision says the exam tests the applicant on the lines of authority applied for, the duties and responsibilities of a producer, and Minnesota's insurance laws and rules. It gives no approval role to the NAIC, to an insurer that may later appoint the producer, or to the school that taught the prelicensing course.