Exam (elaborations)
State Farm Exam Questions and Answers
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State Farm Exam Questions and Answers
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State Farm Exam Questions andAnswers
- Answers -
Gaming - Answers -Gaming is a manipulation the solicitation and submission of
applications to obtain compensation and or agent incentives. This type of activity is not
in the best interest of the company of its policyholders and is strictly prohibited.
Tie in sales - Answers -A practice requiring a customer to purchase one product or
service in order to qualify for a different product or service.
Rebating - Answers -Rebating is offering a prospect or customer a special incentive to
purchase or continue a policy. This practice is illegal in most states and is against State
Farm policy even in states where it is allowed.
Unapproved vendor - Answers -Any vendor that does not have an agreement in place
with state farm, or services received from an approved vendor that are outside the
scope of the vendors agreement with SF.
Unauthorized Vendor - Answers -A specific Vendor that State Farm has identified as not
authorized to be used by SF or Sf agents due to the potential risks posed to SF by
engagement with the vendor. Agents should not use an unauthorized vendor. If an
agent uses an unauthorized vendor his could impact the relationship.
Demonstrations - Answers -shows guaranteed premiums for a term policy. In addition it
will include guaranteed cash values.
Illustrations - Answers -used as a tool to educate the customer concerning the features
and provisions of policy options.
Submission of an application for an insurance policy is best described as? - Answers -
offer
Information used in underwriting a policy for an insured, is made available to in insured
because of which of these? - Answers -Financial Services Modernization Act
What must be done to renew your Insurance License? - Answers -12 Hours of
Continuing Education within 2 Years
,Which of the following is not a characteristic of a Mutual Insurance Company? -
Answers -A policyholder is a voting member on the Board of Directors
Property insurance policies that apply coverage only to perils that are stated in the
policy, are considered to be written on? - Answers -A named peril basis
A physical hazard describes which of the following? - Answers -The storage of
flammables near a furnace
When a producer collects a premium on an insurance contract and deposits that in a
trust account for the insurer. This makes the producer a? - Answers -Broker
In Property and Casualty Insurance, when a form is attached to further define certain
policy provisions or conditions, or adds additional coverage, it is known as? - Answers -
An endorsement
Alpha Insurance Company does business in all fifty states, however its home office is
located in Rhode Island. To their business in California, Alpha Insurance Company is? -
Answers -Foreign
Agent Z is trying to sell a client a policy. Afraid of losing his sale he offers to give the
client 10% of his commissions if the client will buy the policy. That agent would be guilty
of which unfair trade practice? - Answers -Rebating
When does the Texas Property and Casualty Insurance Guarantee Association pay
covered claims? - Answers -When an Admitted Insurer becomes insolvent
Before issuing a nonresident license, the Department must find that the applicant? -
Answers -Has not committed an act for which a license may be denie
All of the following are hazards for insurance underwriting, EXCEPT? - Answers -
Incidental
A person can purchase an insurance policy to cover losses from all the following,
EXCEPT? - Answers -An operation of drug smuggling
Which risk management option, best describes insurance? - Answers -Transfer risk
Which of the following acts does not constitute Transacting Insurance? - Answers -
Making phone calls to set up appointments
A binder would be which of these? - Answers -Temporary proof of insurance
The standardized policy structure for insurance policies does not include which of the
following? - Answers -Duties
, The Department of Insurance requires all of these for Licensing, EXCEPT? - Answers -
High School Diploma or GED
The commissioner of Insurance can do which of these? - Answers -Set continuing
education requirements in Texas
The Commissioner of insurance is responsible for all of the following, EXCEPT? -
Answers -Make insurance laws when appropriate
The section of a property policy that specifies the obligations and duties of the insured
and the insurer is the? - Answers -Conditions
Which of the following is NOT found in a property insurance binder? - Answers -Amount
of premium
The Texas Property and Casualty Insurance Guaranty Association pays covered claims
against which of the following? - Answers -Insolvent insurers
A claimant told their insurer they were sure that a certain piece of property was in the
building that burned. Made a? - Answers -Warranty
M hit F with his personal auto causing damages. F filed on his own policy and his
insurer paid the damages. F's insurer will go after M and M's insurer for the paid
damages. This is called? - Answers -Subrogation
If an Agent makes incomplete comparisons of policies, that Agent would be guilty of? -
Answers -Unfair Comparisons
Which License is required for a person who supervises others for an Insurance
Company? - Answers -Managing General Agent
___________ insurance is used to provide coverage when insurance is not available
from an admitted carrier. - Answers -Surplus
The named insured is found in what section of a property policy? - Answers -
Declarations
A ___________ covers an employee in a position of private trust and protects an
employer against loss caused by the employee's dishonesty. - Answers -Fidelity bond
A Builder's Risk policy automatically ends ___________ days after construction is
complete. - Answers -90
T is the managing lawyer in his firm and wants professional liability coverage for his firm
that would cover which of the following? - Answers -A client sues the lawyer for
purposely losing his case
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