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Oklahoma Casualty Practice Exam

20 exam-style questions drawn from the same bank as our full Oklahoma Casualty course (Oklahoma Insurance Producer - Casualty - Exam Prep). Answer all 20, then grade yourself — most state exams require 70% to pass. Explanations for every question are part of the full course.

1. Under the PAP, an 'insured' for liability coverage (Part A) includes:
The named insured, spouse, family members, and any person using the covered auto with the named insured's permission.The named insured only, while any other driver of the covered auto must rely on that driver's own personal auto policy for coverage.Only the named insured and spouse; family members and permissive drivers must each be specifically listed on the declarations page.The named insured and any person who resides in the same state, whether or not that person had permission to use the covered auto.
2. An insured withdraws consent to electronic delivery. What happens to documents already delivered electronically before the withdrawal took effect?
They remain effective only where the insured acknowledged receipt of each oneThey must be re-delivered on paper before the insurer may rely on any of themThey remain legally effective, valid and enforceable; the withdrawal is prospectiveThey become void and must be re-delivered on paper within thirty days
3. A general contractor receives a certificate of insurance from a subcontractor's agent stating that the GC is listed as an additional insured on the sub's CGL. No AI endorsement is actually attached to the sub's policy. A worker is injured on the jobsite and sues both the sub and the GC. Which statement is CORRECT?
The GC is covered only for its defense costs, because a COI creates a duty to defend but never a duty to indemnify the certificate holder.The COI evidences coverage but does not grant it; the GC is not an additional insured, and the issuing agent has serious E&O exposureThe COI binds the sub's insurer to treat the GC as an additional insured, because the certificate was issued by the insurer's authorized agent.The GC is an additional insured because the COI was relied on in good faith, and the sub's CGL must defend the GC up to its full policy limits.
4. What distinguishes an INVESTIGATIVE consumer report from an ordinary consumer report, and what extra protection attaches?
It is built from public records, and the consumer must consent in writing beforehandIt is ordered by the insurer rather than the producer, and it must be retained for seven yearsIt is built from personal interviews, and advance written disclosure to the consumer is requiredIt covers commercial applicants only, and the consumer report agency must be licensed
5. The BAP's physical damage coverage is typically written with which type of deductible?
Flat dollar-amount deductible per loss (e.g., $500, $1,000).Percentage deductible based on vehicle value.Aggregate annual deductible.Franchise deductible that disappears at a threshold.
6. Which of the following is a method of risk MANAGEMENT, not risk transfer?
Buying ordinary commercial insurance at the primary layerLloyd's of London marine cover at the syndicate levelA pro-rata or excess-of-loss reinsurance treatyRisk retention through self-insurance or a captive
7. A family of four is sued for $3,000,000 after a covered auto accident. The insured has a $250,000 PAP limit and a $2,000,000 umbrella sitting over it. Defense costs run to $150,000, paid by the PAP. How does the umbrella typically handle defense costs on this claim?
The umbrella reimburses the PAP for the $150,000 in defense costs it paid and deducts that amount from its own limit, leaving $1,850,000 available to pay damages.The umbrella pays defense costs only up to 10 percent of its limit, with any defense costs above $200,000 paid personally by the insured family out of pocket.Most personal umbrellas provide defense costs OUTSIDE the limit of liability when the underlying is exhausted and the umbrella takes over the defense, preserving the full $2,000,000 for damages.Personal umbrellas never pay defense costs under any circumstances; the insured must hire and pay for a defense attorney once the underlying PAP limit is exhausted by payment.
8. A policy is cancelled before any coverage has been provided, effective the inception date. What is this called and what premium is returned?
Rescission, and the premium is forfeited to the insurerShort rate cancellation, and the unearned portion less a penalty is returnedPro rata cancellation, and the unearned portion is returnedFlat cancellation, and the entire premium is returned
9. What does 36 O.S. 361 establish, and what does it NOT contain?
It establishes the Commissioner's rulemaking power and the OAC Title 365 seriesIt establishes a tiered penalty schedule of $1,000 non-wilful and $5,000 wilfulIt establishes the Unfair Claims Settlement Practices Act and its per-occurrence penaltyIt establishes the Anti-Fraud Unit and its investigative authority, and contains no dollar penalty figures
10. A business is rated for auto insurance based largely on:
The age of the business and the claims history of its general liability policy.The owner's personal credit score and the total value of the business's real property.The business's annual gross receipts and the number of employees on its payroll.Number and classification of vehicles and drivers, territory of operation, and use.
11. A commercial general liability policy has a deposit premium of $12,000 based on an estimate of $1M in annual receipts. The audit at year-end shows actual receipts of $1.4M. What does the insurer do?
Cancel the policy for misrepresentation of exposure on the application.Absorb the difference, since the deposit premium is the final premium for the term.Refund part of the deposit, because higher receipts earn a volume discount.Bill an additional premium for the difference between estimated and actual exposure.
12. Under 36 O.S. 3636, how may an Oklahoma named insured decline uninsured motorist coverage?
By declining it orally to the producer at the time of applicationNot at all, because uninsured motorist coverage is compulsory in OklahomaBy rejecting it in writing; the coverage is otherwise included by operation of statuteBy selecting a lower liability limit than the statutory minimum
13. How far does the exclusive remedy of 85A O.S. 5(A) reach beyond the employer itself?
To the employer's parent company but to no individual personTo the employer's insurance carrier and its adjusters onlyTo principals, officers, directors, employees, stockholders, partners and prime contractorsTo no one else at all - the immunity protects only the employing entity itself
14. The standard condition uses two different verbs. Which pairing is correct?
Notice of a suit as soon as practicable; legal papers themselves forwarded immediatelyNotice of a suit immediately; legal papers themselves forwarded as soon as practicableBoth notice of a suit and the legal papers as soon as practicableBoth notice of a suit and the legal papers immediately in every case
15. An umbrella written on a 'following form' basis is BEST described as:
A policy that independently broadens coverage beyond the underlying policies and drops down to cover claims the underlying policies exclude, subject to a retention.A policy that mirrors the underlying coverages and exclusions, essentially extending the underlying limits without independently broadening scope.A policy that follows the insured from one state to another, providing coverage only while the insured is traveling away from home.A policy that replaces the underlying coverages entirely, so the insured no longer needs to carry auto or homeowners liability insurance.
16. Under 36 O.S. 1250.5, what are the limits on requesting a refund of an overpayment?
Six months for both a claimant and a health care providerTwelve months for both a claimant and a health care providerTwelve months for a claimant and six months for a health care providerSix months for a claimant and twelve months for a health care provider
17. An insurer uses a credit-based insurance score to DENY coverage to an applicant. Under FCRA, the insurer must:
Provide a GLBA privacy notice describing the information collected and the applicant's right to opt out of sharing it with affiliates.Provide an adverse-action notice identifying the consumer reporting agency and the applicant's right to a free report and dispute process.Nothing beyond a verbal explanation, because a credit-based insurance score is a proprietary insurer tool and not subject to any notice requirement.Refund any application fee and provide the applicant with a copy of the insurer's underwriting guidelines and rating worksheet.
18. Which of the following BEST describes a MORAL hazard?
A tangible physical condition that increases the chance of loss, such as faulty wiring in a building.The insured's deliberate act or dishonesty that increases loss, such as arson for profit.A legal environment in which courts tend to expand liability and award larger damages to plaintiffs.An insured's carelessness or indifference toward loss because insurance will pay, such as leaving doors unlocked.
19. A delivery driver runs a red light. A witness films it and reports the driver to police, but no vehicle or pedestrian is struck and no property is damaged. A bystander sues the driver's employer for negligence. Which element of a negligence claim is MISSING?
Causation, the breach did not cause the specific harm allegedDuty, the driver owed no duty to other road usersBreach, running the light was not a breach of the duty of reasonable careDamages, no actual injury or loss resulted from the breach
20. Which of the following is typically INELIGIBLE for a BOP?
Small office condominium spaces of low square footage and standard occupancy, a class that falls well within BOP eligibility limits at virtually every carrierSmall retail stores within the BOP square-footage and receipts caps, a class designed for BOP coverage rather than excluded by ineligibility rulesAuto repair shops, bars/taverns, large hotels, banks, and certain habitational risks above the size thresholdSmall wholesalers operating within BOP eligibility thresholds for receipts and square footage, a class that the BOP form is designed to accommodate

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