Free Montana Casualty practice questions

Answer: C. Up to $10,000 for each policy under which the refund is claimed

Montana sets a separate, lower cap for unearned premium: the association pays no more than $10,000 for each policy on a covered claim for return of unearned premium. The cap is measured per policy, not per insured, so it is not a single combined amount across all of an insured's policies. The $300,000 figure is the general per-claim cap, and the statute carves unearned premium out of it with the $10,000 limit. Because the statute states a dollar ceiling, the association does not owe the entire unearned premium without limit.

Answer: B. It is confidential and is kept out of the licensee's public file

Sec. 33-17-220(1)(b) makes the background examination confidential and bars holding it as part of the licensee's public file. Nothing in the subsection makes the report public when the license issues, after details are redacted, or after discipline.

Answer: C. No, because commissions may be shared only with a person licensed for the same kind of insurance

Montana law prohibits an insurance producer from sharing commissions or other compensation from a transaction under the producer's license, directly or indirectly, with anyone who is not also licensed under the producer licensing chapter for the same kind of insurance. The friend holds no license, so the producer may not share the commission, whatever the size of the share and whether or not the client consents; the section states no exception for either. Sharing is not barred across the board: a person licensed for the same kind of insurance may receive a share, and the section expressly leaves untouched regular salaries paid to the licensee's employees.

Answer: C. 5 years

Montana requires an insurer to keep its books and records so that data about complaints, claims, rating, underwriting and marketing materials can be reached and retrieved when the commissioner examines it, and that data must be kept for at least 5 years. Periods of 2 or 3 years fall short, and 7 years overstates the minimum the statute sets. The same section separately requires a complete record of all complaints received since the insurer's last examination, and it defines a complaint as a written communication primarily expressing a grievance.

Answer: D. 18 years of age

Before approving a resident producer application, the commissioner must find, among other things, that the applicant has reached 18 years of age. An applicant younger than that falls short of the minimum, and the other ages offered are not the minimum Montana sets.

Answer: C. Interest at 10% per year, calculated from the date the claim was due

When an insurer that is liable on a claim fails to meet the statutory payment deadline, it must pay the claim plus 10% annual interest running from the date the claim was due. A claim is treated as due 30 days after the insurer receives the proof of loss, or 60 days after if the insurer made a reasonable request for information. The interest goes to the person who receives the claim payment and is payable only if it exceeds $5. The statute imposes the interest without any written demand, it is interest rather than a flat penalty to the commissioner, and it runs from the due date rather than the date of loss.

Answer: D. Within 30 days after the order is mailed or delivered to those entitled to it

Montana's rehearing statute measures the deadline from the order, not from the hearing: the written request must be filed with the commissioner within 30 days after the order made on the hearing has been mailed or delivered to the persons entitled to receive it. The commissioner then may grant a rehearing or reargument. An oral announcement does not start the period, and the statute sets no 10-day limit. A 60-day window running from the end of the hearing misstates both the length and the starting point. The filing of a transcript is not the trigger, and 15 days is not the period the statute sets.

Answer: D. $5,000 per violation, lower than the cap that applies to persons generally

Mont. Code Ann. Sec. 33-1-317 allows the commissioner, after a hearing held under Sec. 33-1-701, to fine a person found to have violated the code or a commissioner's regulation up to $25,000. The same section carves out insurance producers and adjusters: a fine imposed on them may not exceed $5,000 per violation. The $25,000 figure is the general cap and does not apply to a producer. The section sets no $10,000 or $1,000 limit for producers, and it does not route larger fines through a court.

Answer: B. The producer holds binding authority from the insurer or has learned from it that coverage was granted

Montana Code Ann. Sec. 33-2-308(4) forbids a surplus lines producer from issuing evidence of insurance, or representing that an eligible surplus lines insurer has written or will write the risk, unless one of two things is true: the producer has authority from the insurer to cause the risk to be insured, or the insurer, in its ordinary course of business, has told the producer the coverage was granted. A reasonable expectation of acceptance is neither of those. Approval by the producing insurance producer does not come from the insurer, and collecting tax and fees from the insured is not the condition this subsection sets.

Answer: C. Notify the commissioner in writing within 10 days after the disapproval

When the commissioner has waived the requirement of home-state approval, Montana still requires the insurer to tell the commissioner in writing within 10 days when the home state disapproves, denies, or withdraws approval of the form. Thirty days is not the period the section sets. The waiver does not end the notice duty, because that duty applies precisely when the requirement has been waived. The section does not make withdrawal and refiling the insurer's response; withdrawing an approval is a power the commissioner holds, exercised after notice and for cause shown.