California Insurance Exam Practice Questions

1. Why might a California business need commercial inland marine coverage in addition to its commercial property policy?

2. Which three coverages, each with its own limit at each described premises, does the ISO Building and Personal Property Coverage Form, CP 00 10, provide?

3. A burglar takes five rings from an HO 00 03 insured's home. The jewelry theft special limit in the form is a per-category amount. How does that limit apply to the five rings?

4. An Oakland landlord carries ISO DL 24 01 modified by ISO DL 24 11, Premises Liability (Non-Owner Occupied Dwelling), for a rental duplex he does not live in. His dog bites a visitor at the landlord's own home across town. Does the endorsement respond?

5. How do the coverages in Section II of the ISO BP 00 03 correspond to the Commercial General Liability coverage form?

6. A Sacramento office park insured under ISO CP 00 10 with 90 percent coinsurance loses twelve mature trees and a perimeter fence in a windstorm. The insured asks the public adjuster to claim them under the Outdoor Property coverage extension. What is the correct analysis?

7. Under the discovery form, CR 00 20, what determines whether a loss is covered?

8. The Building and Personal Property Coverage Form in a Modesto manufacturer's policy plainly covers a piece of outdoor equipment, but an endorsement listed on the commercial property declarations removes coverage for that equipment. How should the public adjuster resolve the conflict?

9. A landlord leasing retail space to a Sacramento tenant requires the tenant's CGL policy to protect the landlord against claims arising out of the leased premises. Which ISO endorsement accomplishes this?

10. A homeowners policy renewed on January 1. On February 10 the insurer learns that the named insured was convicted in February of arson committed in January, a crime having as a necessary element an act increasing a hazard insured against. May the insurer cancel under Cal. Ins. Code section 676?

1. A client fully surrenders a non-MEC whole life policy. The cash surrender value is $80,000, total premiums paid were $50,000, and dividends taken in cash over the years totaled $10,000. What is the taxable gain?

2. An annuity that is funded by a single, lump-sum premium and begins paying income within one year is known as a:

3. A spouse term rider is most commonly issued for what type of coverage period?

4. An owner exchanges Policy A (basis $30,000, cash value $50,000) for Policy B plus a $10,000 cash distribution paid directly to the owner from the surrendering carrier. Which statement correctly describes the federal-tax result?

5. A modified whole life policy differs from straight whole life primarily because:

6. A 60-year-old widow elects the 'life income only' (straight life) settlement option for a $500,000 death benefit. She dies after receiving 14 months of payments. What does the insurer pay to her estate or any contingent payee?

7. Which body provides federal insurance for benefits earned under most private-sector defined benefit pension plans, but NOT for defined contribution plans?

8. A 401(k) plan is authorized under which Internal Revenue Code section?

9. A material misrepresentation in the life application is discovered three years after issue and was not fraudulent. Under the standard incontestable clause, the insurer's remedy is:

10. A 403(b) tax-sheltered annuity plan is restricted to which group of employers?

1. Which of the following expenses does NOT count toward an insured's annual out-of-pocket maximum on an ACA-compliant plan?

2. A member is four days into an authorized inpatient stay when the carrier determines that further inpatient care is no longer medically necessary and stops authorization. This utilization-management tool is:

3. Under Cal. Ins. Code section 4010, which describes a mutual insurer?

4. A study guide describes an HMO capitation arrangement as a flat fee the HMO pays the physician for each office visit. That description is wrong because capitation is actually paid:

5. A PPO member deliberately selects an out-of-network plastic surgeon for an elective cosmetic procedure and is later balance billed. Under the No Surprises Act that balance bill is:

6. A Medicare Advantage plan enrollee in Pomona sees any Medicare-eligible provider who agrees to the plan's terms and conditions of payment, with no network. Which model is this?

7. The HMO Act of 1973 required an employer that offered health benefits to also offer a federally qualified HMO when one was available in the service area. That dual-choice duty reached employers of at least:

8. Which statement about the coverage a Medicare Advantage plan must provide is correct?

9. A beneficiary is enrolled in Part A but has not enrolled in Part B. May she buy a stand-alone Prescription Drug Plan?

10. FMLA generally entitles an eligible employee to: