Free Utah Casualty practice questions

Answer: C. The examined insurer, which pays as the examinee

An examinee that is an insurer pays the reasonable costs of an examination, including examiners' travel, living allowance and compensation and the department's administrative, support and supervisory expenses for the examination. The department may pay all or part of the costs only when the commissioner finds that the cost would unreasonably burden the examinee and that the department has sufficient funds, and the stem rules that finding out. The statute places the cost on the examinee itself and names no charge to the insurer's producers or policyholders.

Answer: D. It must maintain a deposit in the amount of its required capital.

Domestic insurers organized under Utah's chapters for domestic stock and mutual corporations, nonprofit health service corporations or fraternals must maintain a deposit under the state's deposit statute. For a stock insurer the amount is its required capital; minimum permanent surplus is the measure for a mutual. The commissioner may not issue a certificate of authority to such an insurer until it complies, so the deposit cannot wait until after a year of business, and the statute calls for a deposit rather than a premium-based bond.

Answer: D. Only on findings that substantial adherence is not enough and looser wording would frustrate its purpose

Utah Code Ann. Sec. 31A-21-203(2) lets a rule creating an authorized clause call for verbatim or substantial adherence to prescribed language, but it allows verbatim adherence only after the commissioner finds both that substantial adherence would not be sufficient and that liberalizing the language would frustrate the purposes of the prescription. A finding that diverse wording makes comparison difficult is one of the Subsection (1) grounds for adopting an authorized clause at all; it does not by itself support a verbatim requirement. Subsection (1) does forbid mandatory uniform clauses, but it expressly permits authorized clauses, so the word-for-word option is limited rather than banned. Sec. 31A-21-203 gives a rate service organization no role in this decision.

Answer: C. When it is done often enough to indicate a general business practice

The statute prohibits the listed acts when they are committed or performed with such frequency as to indicate a general business practice. The test is frequency, so an isolated act on one claim is not what the statute describes. It does not make a prior written complaint or a court finding of liability a condition of the prohibition.

Answer: D. Before the producer begins using the trade name

A producer doing business under any name other than the producer's legal name must notify the commissioner prior to using that assumed name. Notice within 30 days after first use or at the next renewal comes after the name is already in use, and notice only when someone asks may never be given at all. The obligation is triggered before the name is used.

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 Utah sets.

Answer: A. holding an appointment from at least one insurer already in place

Utah Code Ann. Sec. 31A-23a-105(1)(b) directs the commissioner to issue or renew a producer license to a person who meets a list of conditions. That list includes the application requirements, the character requirements of Section 31A-23a-107, applicable continuing education, examination and training period requirements, and not having committed an act that is a ground for denial, suspension or revocation under Section 31A-23a-111. The character, examination and no-ground choices are therefore all on the list. An existing insurer appointment is not one of the listed conditions for issuing or renewing the license.

Answer: A. It is permitted, and the deposit is held for the benefit of all of the insurer's policyholders.

A foreign insurer operating under Utah's foreign insurers chapter must keep a deposit equal to its minimum required capital if it is a stock insurer, or its minimum required permanent surplus if it is a mutual. The statute allows that deposit to be kept with an official of another state designated by law to accept it, and it says the deposit is held for the benefit of all policyholders, not only those in one state. The out-of-state option applies to stock and mutual insurers alike and is not displaced by any Utah treasurer requirement. The commissioner may not issue or renew the insurer's certificate of authority until it complies.

Answer: B. At least one license type and at least one line of authority that pertains to it

Utah requires every valid license to carry a license type plus a line of authority that belongs to that type (Utah Code Ann. Sec. 31A-23a-103(1)(b)). The choice pairing a license type with an insurer appointment is wrong because this subsection's description of a valid license does not mention an appointment. The choice requiring both property and casualty overstates the rule: one line of authority is enough. The choice describing a license type with lines added later describes a license with no line of authority, which falls short of what the subsection requires.

Answer: B. 24 months

Utah Code Ann. Sec. 31A-23a-112(1) lets the commissioner place a licensee on probation for no more than 24 months, including at issuance or renewal when background information shows a conviction for a crime that rule lists as grounds for probation. Twelve months is the cap on a suspension under Sec. 31A-23a-111(5), not the cap on probation. Five years is the longest period a revocation order may bar a former licensee from reapplying under Sec. 31A-23a-111(8), which is a different consequence. Thirty-six months exceeds the 24-month limit. The probation order must set reasonable conditions for keeping the license, and violating probation is grounds for revocation.