Free North Dakota Property practice questions

Answer: B. Twenty days

Among the grounds on which the commissioner may suspend, revoke, place on probation, or refuse to issue or continue a license, after notice and hearing, is an applicant's or licensee's refusal to answer the commissioner's written request for information about a potential violation within twenty days. Ten, thirty and sixty days are not the period stated in that ground.

Answer: C. A salaried administrator, paid no commission, whose work only indirectly touches sales

North Dakota exempts an officer, director, or employee of an insurer or producer whose work is executive, administrative, managerial, or clerical and only indirectly related to selling, soliciting, or negotiating insurance, provided the person receives no commission on policies covering risks in the state. The salaried administrator meets both conditions. The clerical employee loses the exception because of the commission on North Dakota policies. The employee who sells to walk-in customers and the executive who solicits applications in person are engaged in the sale and solicitation of insurance itself, so their work is more than indirectly related to it.

Answer: A. At replacement cost or actual cash value, as the policy provides

The valued policy law does not apply to a claim for loss of an appurtenant or separate structure. Such a claim is paid at actual replacement cost or actual cash value, whichever the policy's terms for that structure call for. The exception would be a separate structure individually described in the policy with a value assigned to it before the loss, and this garage was neither. Because the valued policy law does not reach the garage, neither its face-amount rule nor its sixty-day lesser-of formula applies, and the statute provides no size-based share of the dwelling limit.

Answer: C. The transferring insurer must give the policyholder notice that the policy has been transferred

North Dakota requires the insurer that transfers a policy to another insurer within the same insurance holding company system to notify the policyholder of the transfer. The duty sits with the transferring insurer and runs to the policyholder. The statute does not make the transfer depend on the policyholder's consent, does not excuse notice because the insurers are affiliated, and does not direct a producer to notify the commissioner.

Answer: B. An insurer unlicensed in North Dakota, for coverage no licensed insurer will provide

The North Dakota definition of a surplus lines insurance producer has two parts: the policy comes from an insurer that is not licensed to transact business in North Dakota, and the coverage is something that cannot be obtained from an insurer licensed here. A licensed insurer that declines the risk is not the insurer the definition describes, because the surplus lines producer places the policy with an unlicensed insurer. An insurer licensed in another state does not qualify where licensed insurers here would provide the coverage, since the definition requires that the coverage be unobtainable from a licensed insurer. A reinsurer taking a share of a licensed insurer's risk is a different arrangement; the definition speaks of procuring a policy from an unlicensed insurer.

Answer: B. It does not apply, because the producer kept money due after a written demand

North Dakota ordinarily requires an insurer that terminates a producer's appointment to allow renewal and endorsement of the producer's contracts for one year. The section states that this requirement does not apply when the termination results from the producer's failure, after a written demand, to pay over money due the insurer. The section provides no shortened six-month period, does not apply regardless of the reason for termination, and contains no commissioner approval step.

Answer: C. Five days after execution

The standard fire policy law treats the standard policy as an interest policy, construed to protect whatever interest a named insured holds. Once a written document transferring an interest in the insured property is signed, the law allows a five-day grace period during which the policy must still give full protection on its terms. Ten days and thirty days overstate that grace period, and the statute does not carry protection forward to the next policy anniversary.

Answer: B. It covers practices the act defines as unfair and practices determined under the act to be unfair

The general prohibition bars any person from engaging, in North Dakota, in a trade practice that the act defines as unfair competition or an unfair or deceptive insurance practice, or that is found under the act to be one. Because it reaches practices determined under the act as well as those it defines, it is wrong to say only listed practices are covered. It applies to any person, not only insurers. Nothing in the prohibition requires a prior court finding or a financial loss to a policyholder.

Answer: C. The person must have acted with intent to deceive when circulating the false statement

The provision applies to any person, not only to insurers or their officers, and reaches filing a false statement of an insurer's financial condition with a public official as well as publishing, circulating or delivering one to any person or to the public. The element it adds is intent to deceive. Nothing in it confines the prohibition to officers or directors, requires that the statement first be filed with the commissioner, or requires that anyone relied on the statement and lost money.

Answer: D. A concerted boycott tending to cause unreasonable restraint of insurance business

It is an unfair method of competition to agree to commit, or to commit through concerted action, a boycott, coercion, or intimidation that results in, or merely tends to result in, unreasonable restraint of the business of insurance. The agencies' joint refusal to place business is a boycott by agreement. Because conduct that only tends toward the restraint is enough, the section does not require proof that the insurer actually lost premium. Its text contains no requirement of a prior criminal conviction, and it does not depend on publicizing the agreement.