Question 1

ID# 5876308

Points: 1

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Surplus lines insurance is most often placed with a surplus lines insurer by

Select one:

A. Agents representing admitted insurers as exclusive agents.

B. Underwriters from admitted insurers that are unable or unwilling to write the business.

C. Knowledgeable consumers who approach surplus lines insurers directly.

D. Licensed surplus lines intermediaries such as wholesale brokers.

Question 2

ID# 5876320

Points: 1

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Which one of the following statements is true regarding surplus lines insurers?

Select one:

A. Only surplus lines insurers that are eligible in a particular state can insure risks in that state.

B. Surplus lines licensees are able to place insurance with any nonadmitted insurer.

C. Surplus lines insurers are ineligible to obtain reinsurance for the types of risks that they write.

D. Surplus lines insurers rarely employ risk control personnel because of the nature of the exposures that they insure.

Question 3

ID# 5876304

Points: 1

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A property risk that does not meet current building codes located in a hurricane-prone area has suffered several losses in the previous year. This risk would most likely be insured in the surplus lines market because it is a

Select one:

A. Standardized risk.

B. Distressed risk.

C. Unique risk.

D. High-capacity risk.

Question 4

ID# 5876302

Points: 1

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Nonadmitted insurers benefit consumers by

Select one:

A. Charging lower rates than admitted insurers charge for the same coverage.

B. Complying with state insurance department regulations regarding rate, form, and underwriting rules.

C. Providing coverage for loss exposures that admitted insurers are unable to insure profitably.

D. Reducing the need for admitted insurers for coverages such as workers compensation and automobile liability.

Question 5

ID# 5876330

Points: 1

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In the absence of other tax-sharing arrangements, surplus lines premium taxes are regulated by

Select one:

A. The surplus lines intermediary's home state.

B. Every state in which the insured conducts operations.

C. The surplus lines insurer's state of domicile.

D. Only the insured's "home state."

Question 6

ID# 5876322

Points: 1

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A surplus lines transaction is initiated by

Select one:

A. A retail producer who approaches one or more surplus lines intermediaries.

B. A surplus lines intermediary who approaches an underwriting manager about binding coverage.

C. A wholesaler who approaches a retail producer bout submitting the account to appropriate markets.

D. An underwriting manager who approaches a wholesaler about qualifying a submission.

Question 7

ID# 5876324

Points: 1

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In which step in the transaction process used by surplus lines intermediaries does the surplus lines intermediary determine whether the expertise and contacts exist to meet a particular customer's needs?

Select one:

A. Preparing the submission

B. Providing ancillary services during the policy period

C. Qualifying the submission

D. Submitting the account to the selected insurers

Question 8

ID# 5876288

Points: 1

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In the third step in the transaction process, submitting the account, a surplus lines intermediary is most likely to be concerned with

Select one:

A. Allowing adequate lead time to quote the account.

B. Whether to present the quote to the customer jointly with the retail agent.

C. Acquiring complete, and current financial information from the customer.

D. Whether particular insurers are willing to consider the account.

Question 9

ID# 5876329

Points: 1

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To satisfy the diligent search requirement, state laws and regulations often specify the

Select one:

A. Number of declinations needed.

B. Amount of time required to complete diligent search.

C. Locations of insurers that must decline the risk.

D. Names of insurers that must decline the risk.

Question 10

ID# 5876328

Points: 1

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Surplus lines intermediaries

Select one:

A. Are not required to obtain a license in any state.

B. Cannot acquire a nonresident license in states other than their home state.

C. Are licensed on a resident basis in their home state.

D. Must obtain a federal surplus lines broker's license.

Question 11

ID# 5876327

Points: 1

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When binding coverage and delivering the policy, a surplus lines intermediary acting as a broker should be especially careful to

Select one:

A. Include a pricing comparison, insurer financial ratings, and a comparison of policy terms and conditions.

B. Ensure that the binder is issued correctly and that the policy agrees with the binder in all material respects.

C. Prepare / complete, and accurate submission including loss history and financial information.

D. Explain that surplus lines insurers do not participate in state insurance guaranty funds.

Question 12

ID# 5876315

Points: 1

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In addition to general functions performed by surplus lines intermediaries, one of the additional functions of a wholesale broker is to

Select one:

A. Collect premium taxes.

B. Maintain documentation.

C. Provide counseling to identify loss exposures.

D. Prepare complete submissions for surplus lines underwriters.

Question 13

ID# 5876314

Points: 1

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One function performed by surplus lines intermediaries that is not performed by retail agents is

Select one:

A. Maintaining documentation.

B. Filing diligent search affidavits.

C. Prospecting.

D. Selling.

Question 14

ID# 5876313

Points: 1

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A specialist who has been carefully evaluated and accredited by Lloyd's to negotiate competitive terms and conditions with Lloyd's underwriters is

Select one:

A. A Lloyd's program manager.

B. A Lloyd's broker.

C. An underwriting manager.

D. A managing general agent.

Question 15

ID# 5876340

Points: 1

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A surplus lines insurer is considering offering a product that has a high volume of transactions requiring intensive hands-on staff involvement. Which one of the following factors affecting a surplus lines insurer's decisions about what products to offer would be most important in this case?

Select one:

A. Financial resources

B. Reinsurance

C. Regulation

D. Processing requirements