Free Pennsylvania Property & Casualty practice questions

Answer: B. A written agreement with the client setting out the services and disclosing the producer's fee.

Section 671-A separates the two capacities a producer may act in. Subsection (a) requires an appointment only of a producer acting for, or as the representative of, an insurer, and says in terms that a producer who is not acting as an insurer's representative need not be appointed. This producer represents the consumer, so subsection (b) applies: before representing the consumer or acting on the consumer's behalf, the producer must execute a written agreement with that consumer which sets out the services to be provided and discloses fully and completely the fee the consumer is to pay the producer. What subsection (b) calls for is disclosure of the producer's own fee to the client, not a filing with the department about what insurers pay in commission, and Section 671-A imposes no bond.

Answer: D. The Insurance Department adopts it, and all motor vehicle liability insurers must subscribe to it.

Section 1741 names both the adopting body and the duty to take part. The Insurance Department, after consulting the insurers licensed in this Commonwealth to write motor vehicle liability insurance, is to adopt a reasonable Assigned Risk Plan apportioning equitably among those insurers the applicants who are entitled to insurance but cannot obtain it by ordinary methods. Participation is not optional: once the plan is adopted, every motor vehicle liability insurer must subscribe to it and take part in it. The consultation the section requires is with the insurers, but the body that adopts the plan is the Insurance Department, neither the Department of Transportation nor the insurers themselves. One group is relieved of the duty, and Section 1787(c) names it: a self-insurer need not accept risks assigned under Subchapter D.

Answer: B. It runs for a period not to exceed 180 days, and it is not transferable.

Section 609-A(a)(1) is what allows the department to license a surviving spouse so the insurance business can continue, and subsection (b) fixes the license's limits: it may run for no more than 180 days, and it cannot be transferred. The events listed in subsection (a)(1), the sale or transfer of the business among them, describe how the spouse's authority can end sooner; they do not displace the 180-day cap, so a license running simply until a sale would exceed it. Neither a year nor 90 days appears anywhere in Section 609-A, and the section provides no renewal or extension of a temporary license.

Answer: D. The one injured by a driver who accepted Accelerated Rehabilitative Disposition for driving under the influence in that accident.

Section 1705(d)(1) lists the circumstances in which a person otherwise bound by a limited tort election may recover damages as though full tort had been elected. The first is that the person at fault, in that same accident, either was convicted of driving under the influence of alcohol or a controlled substance or accepted Accelerated Rehabilitative Disposition for it, which is exactly the disposition the key describes. The other three entries on the list are a person at fault operating a vehicle registered in another state, one intending to injure himself or someone else, and one who has not maintained the financial responsibility the chapter requires; a summary traffic fine paid by mail is none of these. Section 1705(d)(2) and (d)(3) add two further routes, a claim against a business that designed, manufactured, repaired, serviced or otherwise maintained the vehicle where the injury arises from a defect, and injury while an occupant of a motor vehicle that is not a private passenger motor vehicle. Neither the at fault driver's policy limits nor the ownership of the vehicle he was driving appears anywhere in Section 1705(d).

Answer: C. By filing evidence with the Department of Transportation that reliable financial arrangements, deposits, resources or commitments exist.

Section 1787(a) puts the filing with the Department of Transportation rather than with an insurance regulator. A fleet owner becomes a self-insurer by filing evidence, in a form the department finds satisfactory, that its financial arrangements, deposits, resources or commitments are reliable enough to satisfy the department on three points: that it will pay the first party benefits Section 1711 requires, that it will meet judgments to the extent Section 1774 sets, and that it will carry uninsured motorist coverage up to the limits that section fixes. What the filing must establish is financial capacity, then, not authority to transact insurance, which is why a certificate of authority is the wrong instrument. Section 1782(a) counts an approved self-insurance program as one of the permitted ways of furnishing proof of financial responsibility, alongside a motor vehicle liability policy. The Assigned Risk Plan is not a route into self-insurance either: Section 1787(c) relieves self-insurers of any duty to accept risks assigned under that plan or to contribute to the Assigned Claims Plan.

Answer: D. The benefits are overdue and bear interest at 12 percent per annum from the date they became due.

Section 1716 treats first party benefits as overdue when they are not paid within 30 days of the insurer receiving reasonable proof of their amount, so a claim still unpaid 45 days after that proof arrived is overdue. The same section fixes what follows: overdue benefits carry interest at 12 percent a year, running from the date they fell due. That interest is automatic once the benefits are overdue and does not depend on how the insurer behaved. Section 1716 attaches a separate and additional consequence to unreasonable conduct, so that an insurer found to have been unreasonable in refusing to pay benefits when due owes a reasonable attorney fee based on the time actually expended, on top of the benefits and the interest.

Answer: B. Every provision of the standard form, except the cancellation clause and the clause fixing the hour at which the insurance commences.

Subsection 5(d) of Section 506 places binders inside the standard form and then takes two clauses back out. A contract for temporary insurance, fire insurance included, may be made either orally or in writing, may not run beyond thirty days, and is deemed to carry every provision of subsection two of the section together with any commissioner-approved endorsements the contract designates. Subsection two is the standard form itself, so the whole of it is read into the binder. The exception reaches only two named clauses: the cancellation clause, and the one fixing the hour at which cover is to begin. For those two the binder's own express terms may govern instead. The same sentence disposes of the fact that nothing here was written down, since an oral binder is expressly permitted, and it is also where the thirty day outside limit comes from.

Answer: C. Paying a civil penalty of $500 with the restoration fee and furnishing proof, available once in a 12 month period.

Section 1786(d)(1) sets the registration suspension at three months where the department determines that the required financial responsibility was not secured. Paragraph (d)(1.1) then supplies the way out: instead of serving that suspension, the owner or registrant may pay the department a $500 civil penalty together with the restoration fee that Section 1960 prescribes, and furnish proof of financial responsibility in whatever manner the department determines. The same paragraph limits the option to one exercise in any 12 month period. The $300 figure is real in the same section but is a different penalty for a different act: Section 1786(f) makes operating without the required financial responsibility a summary offense carrying a $300 fine. Surrendering the plate and card is not a way out of a suspension already imposed either. Section 1786(g)(2) treats that as a reason the owner should not have been penalized in the first place, and only where the surrender was made when the coverage terminated.

Answer: B. The employer owes the manufacturer nothing by way of damages, contribution or indemnity, because no written contract made that liability express beforehand.

Section 303(b) does two things in one sentence, and it is the employer's immunity that governs this scenario. It first preserves the employee's own remedy, allowing the employee and those claiming through the employee to sue a third party whose conduct caused the injury. It then closes that action off at the employer: the employer, its insurance carrier and their agents and representatives owe a third party nothing by way of damages, contribution or indemnity, whether in an action at law or otherwise, unless that liability was expressly provided for in a written contract which the party said to be liable entered into before the date of the occurrence giving rise to the action. Because the bar is written as a bar on liability to the third party, it does not turn on how a court would apportion fault between the employer and the manufacturer, and the subsection makes no exception for proof of the employer's negligence. It states one exception and one only, an express written contract made before the occurrence, and there is none here. The subsection fixes no amount either, so there is no ceiling measured by benefits already paid. Section 303(a) states the companion rule on the employee's side, making the employer's liability under the act exclusive of and substituted for every other liability to such employes.

Answer: C. Fifty-one per centum of the wages of the deceased, but not in excess of the Statewide average weekly wage.

Section 307 distributes the death benefit according to who survives the employee, and clause (2) covers this household exactly: where there are no children, the widow or widower takes fifty-one per centum of wages, subject to a ceiling at the Statewide average weekly wage. Each of the other percentages is a real figure from the same section attached to a different family. Clause (1)(a) gives thirty-two per centum of the deceased's wages where one child survives and no widow or widower is entitled, clause (3)(a) gives sixty per centum where the widow or widower is guardian of one child, and clause (3)(b) gives sixty-six and two-thirds per centum where two or more children survive. Section 307 also conditions a widow's entitlement on the marriage, and the scenario is built to satisfy it: no compensation is payable to a widow who was neither living with her husband when he died nor then actually dependent on him for a substantial part of her support. The section carries a floor on the wage figure as well, since the wage figure for this section is never to be taken as below fifty per centum of the Statewide average weekly wage.