Free Utah Property & Casualty practice questions

Answer: B. It must be in writing and signed by the commissioner or under the commissioner's authority.

Utah's Insurance Code directs the commissioner to issue prohibitory, mandatory, and other orders as needed to secure compliance. It also states that such an order has no effect unless it is in writing and signed by the commissioner or under the commissioner's authority. An oral order delivered by an examiner fails the writing requirement. The provision does not make an order's effectiveness depend on court approval or on a website posting period.

Answer: B. The initial appearance before a court

Utah sets the reporting period for a criminal matter at 30 days, and the clock starts at the initial appearance before a court. The final disposition of the case is the trigger for the separate duty to report administrative actions, and neither the date of the complaint nor the renewal cycle starts the clock.

Answer: C. $250,000 per claim and $500,000 annual aggregate

Utah Admin. Code r. 590-244-5(3)(b) requires an individual licensed as a resident producer to carry legal liability errors and omissions coverage of at least $250,000 per claim and $500,000 in annual aggregate. Limits of $100,000 and $300,000 fall below that floor. Limits of $500,000 and $1,000,000 would exceed the requirement, but they are not the minimum the rule sets. The $50,000 surety bond alternative appears in the rule only for navigators, under r. 590-244-6, not for resident producers.

Answer: A. A testing vendor approved and contracted by the commissioner

Utah Admin. Code r. 590-244-8(1) lists who may administer examination and training requirements: the commissioner, a testing vendor the commissioner has approved and contracted with, or the U.S. Department of Health and Human Services for a navigator. The federal agency's role, as r. 590-244-8(2) shows, concerns the federal training and certification a navigator must complete, not a property and casualty producer's examination. An appointing insurer is not on the list. NIPR appears in the department's rule as electronic application software, not as an examination administrator.

Answer: C. No more than one year after the lapse

Under Utah Code Ann. Sec. 31A-23a-113(1)(c)(i), a licensee whose license has lapsed has up to one year from the date of the lapse to request that the license and line of authority be reinstated. Failing to complete continuing education before submitting the renewal application is one of the causes of a lapse listed in Sec. 31A-23a-113(1)(a). Sixty days and 90 days understate the window, and two years overstates it. The department's licensing rule draws the same one-year line: an inactive license not reinstated within a year of its expiration cannot be reinstated, and the person may instead apply as a new license applicant.

Answer: C. The casualty insurance line of authority

Licenses in Utah are issued under the license types set out in the statute, and the producer license type lists casualty insurance as a line of authority that expressly includes a surety or other bond (Utah Code Ann. Sec. 31A-23a-106(2)(a)(v)). The property line is listed separately and carries no reference to bonds. The personal lines line is also a separate producer line with no mention of surety. Limited line credit insurance belongs to the limited line producer license type, not the producer license type, and is not described as including bonds.

Answer: A. Past and prospective loss experience, both inside and outside Utah

Under Utah Code Ann. Sec. 31A-19a-202(1), the commissioner tests rates against the rate standards by considering, among other things, the criteria in Subsection (2). Subsection (2) requires the commissioner to look at past and prospective loss experience from both within and outside Utah, along with catastrophe hazards, trends and other relevant factors. Limiting the review to Utah data, to projections alone, or to past results alone leaves out part of what Subsection (2) requires. Nothing in Subsection (2) confines the review to data from a rate service organization.

Answer: C. Whether consumers have a practical way to compare and buy from rival insurers

Utah Code Ann. Sec. 31A-19a-201(2)(a) directs the commissioner, when judging whether reasonable price competition exists, to weigh tests of workable competition covering market structure, performance and conduct, and the practical opportunities consumers have to get pricing information and to compare and obtain insurance from competing insurers. A consumer's practical ability to shop among rival insurers is therefore a required consideration. The commissions an insurer pays its producers, the insurer's state of domicile, and complaint counts against its producers do not appear among the factors this subsection lists.

Answer: B. $2,500

The enforcement section caps the commissioner's forfeiture order against an individual producer, and against other listed licensees such as adjusters, managing general agents and insurance consultants, at $2,500 for each violation of an insurance statute or rule. The $5,000 figure is the cap for any other person who violates a statute or rule, such as an insurer, so it does not govern an individual producer. $10,000 is the per-day amount a court may impose when a person keeps failing to comply with a commissioner's order after a complaint is filed, not the commissioner's own per-violation cap. The section sets no $1,000 forfeiture cap.

Answer: A. The commissioner issues an order stating the examination's scope and naming the examiner in charge.

For each examination, the commissioner issues an order that states its scope and designates the examiner in charge, and the examiner in charge gives the examinee a copy. The commissioner need not give an examinee advance notice, so a rule requiring notice before examiners arrive is wrong. The commissioner, not the examinee, designates the examiner in charge. Scope statements in the order are guidance for the examiner, and examining relevant matters the order does not mention is expressly not a violation.