Free Oregon Property & Casualty practice questions

Answer: D. The flyer is prohibited as an untrue statement about a person in the insurance business

Oregon prohibits any person from making or circulating an advertisement, announcement or statement that is untrue, deceptive or misleading, whether it concerns the business of insurance or any person engaged in that business. A false claim that a competing agency lost its license is a statement about a person in the business, so describing a competitor rather than a policy is no defense. The medium does not matter: the section names circulars, pamphlets, letters and posters as well as publications and broadcasts, and adds any other way. The section's test is whether the statement is untrue, deceptive or misleading, and it states no requirement that the speaker intended harm.

Answer: B. It may assess the diabetes under the standards it applies to sighted applicants

Oregon's rule treats it as unfair discrimination for an insurer, solely because of blindness or partial blindness, to refuse or stop insuring a person, to limit the amount, extent or kind of coverage, or to charge a different rate for the same coverage. For all other conditions, including the condition that caused the blindness, a blind or partially blind person is held to the same actuarial or experience standards as a sighted person. The insurer may therefore evaluate the diabetes exactly as it would for a sighted applicant, but may not raise the rate or cap the coverage because of the partial blindness itself, and it is not required to ignore the diabetes.

Answer: D. 2 credit hours

Oregon requires a resident producer to complete 12 hours of continuing education a year or 24 hours in each two-year renewal period. Within those hours, a producer who negotiates, sells or solicits flood insurance must include at least 2 credit hours on flood subjects, which may be any mix of current state and federal flood insurance law, the National Flood Insurance Program or private flood insurance. Three hours is the minimum for each of two other required subjects, Oregon statutes and rules and professional ethics, not for flood. Twelve and 24 are the overall totals, not the flood minimum.

Answer: A. The fee is barred, because household coverage counts as individual coverage

Oregon's general rule, subject to an exception stated in a separate rule, is that a service fee may not be charged on insurance covering an individual's person, property or liability. The rule also treats coverage of several members of the same family or household as individual coverage. So a policy covering three household members is still individual coverage, not group coverage, and the fee is barred. The rule reaches liability coverage expressly, so describing auto coverage as liability coverage does not help, and the bar does not depend on whether the policy covers anyone's injuries.

Answer: C. Restitution on the policyholder's behalf for the actual damages suffered

Oregon lets the director, as part of or in addition to an enforcement action against an insurer, seek restitution on a consumer's behalf for actual damages caused by the insurer's violation of the Insurance Code or applicable federal law, or by its breach of the consumer's policy. The director may also seek other equitable relief. The statute does not condition restitution on the consumer first winning a private suit, and it does not provide for tripled damages. Because restitution for the consumer is expressly authorized, the director is not limited to fines.

Answer: B. As a Class A misdemeanor

Oregon's catch-all criminal penalty makes an Insurance Code violation a Class A misdemeanor when neither the Code nor other Oregon law provides a greater penalty, and it applies on top of any license or certificate action or civil forfeiture that also applies. The same statute reserves the Class C felony for violations of the insurance holding company provisions. The Class C misdemeanor covers an officer, director or employee of a holding company system who willfully and knowingly makes a false statement or filing intended to deceive the director in holding company matters. Civil consequences do not displace the criminal classification, since the misdemeanor applies in addition to them.

Answer: B. He currently holds a resident producer license there in good standing

One condition for an Oregon nonresident producer license is that the applicant currently holds a resident producer license in good standing in his home state. A license held at some earlier time fails the requirement that it be current, and a pending application is not a license at all. Passing Oregon's own producer examination is not among the conditions listed in that provision.

Answer: A. When acting for a producer appointed by Insurer K, within conditions set by director rule

Oregon allows a producer to act as agent of an insurer in two situations only: the producer is appointed by that insurer, or the producer transacts insurance on behalf of another producer who is appointed by it, subject to conditions and limitations the director sets by rule. Ana has no appointment with Insurer K, so acting through a producer Insurer K has appointed is the route open to her. A license covering the line does not by itself make her the insurer's agent. Notifying the director of a planned appointment is not one of the two routes, and neither is a signed form from the applicant.

Answer: C. Only if sound actuarial principles or actual or expected experience support it

Oregon prohibits an insurer from discriminating in its underwriting standards or rates based solely on an applicant's or insured's reaching or passing age 65, unless sound actuarial principles clearly support it or it is related to actual or reasonably anticipated experience. Age can therefore be used with that justification, so a flat ban is wrong. Filing notice with the director is not the exception the statute provides. The protection begins at 65 and covers anyone at or above that age, so there is no upper cutoff at 75.

Answer: D. Payment is barred, because Jordan solicited insurance without a required license

An insurer or a producer may not pay a commission, service fee, brokerage or other valuable consideration to someone for selling, soliciting or negotiating insurance in Oregon if that person must be licensed and is not. Jordan solicited insurance without a required license, so the producer may not share the commission. The prohibition reaches producers as well as insurers, covers any valuable consideration rather than only payments labeled commissions, and sets no percentage below which a share is allowed.