Free Tennessee Casualty practice questions

Answer: A. Kentucky, because she keeps her residence and agency there and is licensed there to act as a producer

Tennessee's producer licensing act defines a producer's home state as the state, territory, or District of Columbia where the producer keeps a principal place of residence or principal place of business and is also licensed to act as a producer. She lives and does business in Kentucky and holds a license there, so Kentucky is her home state. Her Tennessee license is a nonresident license, and the definition does not depend on which state's act is being applied. Holding a license is only half of the test: Tennessee and Ohio are states where she is licensed but neither resides nor has her principal place of business. The order in which her licenses were issued plays no part in the definition.

Answer: C. Using a policy title that misrepresents the policy's true nature

Tennessee lists, as a misrepresentation of insurance policies, using any name or title of a policy or class of policies that misrepresents its true nature. A title promising total protection on a policy that pays for a few narrow events misstates what the policy is. The false-entries provision concerns entries in an insurer's books, reports or statements, and nothing here was entered in a book. Unfair discrimination concerns treating individuals of the same class differently, while every buyer here gets the same title. Defamation concerns false or maliciously critical statements about an insurer's financial condition, and the title says nothing about any insurer's finances.

Answer: B. Before the agreement is signed or a product sale is solicited

Tenn. Code Ann. Sec. 56-6-125(a)(2) makes it an unfair trade practice for an insurance producer to engage in financial planning without telling the client that the producer is also an insurance salesperson. That disclosure must come before the planning agreement is executed or before the sale of a product or service is solicited. A disclosure thirty days after the agreement, at a later annual review, or only when an application is completed comes too late under that timing.

Answer: A. Yes, an admission alone satisfies the ground, without any separate finding being made.

One listed cause for discipline is having admitted or been found to have committed an insurance unfair trade practice or fraud. The ground is satisfied either way, so a written admission supports action even though no tribunal made a finding. A felony conviction is a separate ground of its own rather than a prerequisite for this one, and this ground is not limited to any line of insurance.

Answer: A. 180 days

The commissioner may issue a temporary producer license without requiring an examination, for a period of no more than 180 days, where it is needed to service an insurance business, for example for the surviving spouse or court-appointed personal representative of a producer who has died or become disabled. The other periods offered are not the maximum Tennessee sets.

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 Tennessee 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.

Answer: C. It is confidential and privileged and shielded from that subpoena

Testimony, documents and other information the commissioner obtains in a producer licensing investigation are confidential and absolutely privileged. They are not subject to the public records provision the statute names, to subpoena, or to discovery, and they are not admissible as evidence in any private civil action. The protection is stated without any end date tied to closing the investigation. The commissioner may still use the material in regulatory or legal action brought as part of the commissioner's duties, but that exception does not extend to a private litigant.

Answer: C. Within 30 days after the termination becomes effective

When an insurer ends a producer relationship for one of the reasons listed in the license discipline statute, such as forging another's name to an application, it must notify the commissioner within 30 days following the effective date of the termination, in a format the commissioner prescribes. The period runs from the termination's effective date, not from the insurer's discovery or from notice to the producer, and it is 30 days rather than 10 or 60. Annual statement timing plays no part in this notice.

Answer: B. A nonprofit, unincorporated legal entity created by statute

The statute creating the association describes it as a nonprofit, unincorporated legal entity. A nonprofit corporation is wrong because the association is unincorporated. A for-profit entity is wrong because the association is nonprofit. An incorporated stock company is wrong on both counts.

Answer: A. It is outside the Act, which excludes fidelity and surety bonds

The Act's scope section excludes fidelity bonds, surety bonds and any other bonding obligation. A performance bond is a bond, so the owner's claim falls outside the Act. The location of the building does not bring an excluded bond back in, and neither does a judgment against the contractor. The Act does apply to direct insurance generally, but that general rule is expressly subject to the listed exclusions, so it does not reach the bond.