I85PREP
⌘ K
AR Property & Casualty study materials
AR Property & Casualty study resources

AR Property & Casualty practice questions

One question at a time. Build your AR Property & Casualty understanding.

First 50 of 200 questions. Each one lists the choices, the correct answer, and an explanation. The checker at the top of this page saves progress in this browser when it is available.

Continue in the practice tool above to load more questions, 50 at a time.

Question 1Arkansas Insurance Statutes, Rules, and Regulations

Who appoints the Arkansas Insurance Commissioner?

  1. The board of directors of the NAIC
  2. The Governor, with Senate confirmation Correct answer.
  3. The Arkansas House of Representatives
  4. The state's voters in a general election

Explanation

The Commissioner heads the Arkansas Insurance Department and is appointed by the Governor, subject to Senate confirmation, rather than being chosen by the voters. As the state's chief insurance regulator, the Commissioner administers and enforces the Arkansas Insurance Code.

Question 2Arkansas Insurance Statutes, Rules, and Regulations

Arkansas law requires private passenger automobile liability policies to provide at least which minimum limits?

  1. 25/50/25 Correct answer.
  2. 15/30/10
  3. 50/100/50
  4. 30/60/25

Explanation

Arkansas's compulsory liability law sets minimum limits of $25,000 per person and $50,000 per accident for bodily injury, plus $25,000 per accident for property damage. Insurers may issue higher limits, but a policy cannot be issued below these minimums.

Question 3Arkansas Insurance Statutes, Rules, and Regulations

How many continuing education credit hours must an Arkansas resident producer complete during each two-year license period, and how many of those must be in ethics?

  1. 12 hours, including 2 hours of ethics
  2. 24 hours, including 3 hours of ethics Correct answer.
  3. 30 hours, including 6 hours of ethics
  4. 16 hours, including 3 hours of ethics

Explanation

Arkansas requires resident producers to complete 24 hours of approved continuing education every two years, at least 3 of which must be ethics. Hours must come from courses approved by the Insurance Department and are reported by the course provider.

Question 4Arkansas Insurance Statutes, Rules, and Regulations

Under Arkansas law, an insurer may pay a commission on an Arkansas policy to:

  1. a producer appointed by that insurer Correct answer.
  2. a client who refers a friend
  3. any person who submits an application
  4. an unlicensed agency employee

Explanation

Commissions may be paid only to a licensed producer who holds an appointment from the insurer paying the commission. Sharing commissions with unlicensed persons is prohibited because it would allow unlicensed activity to be compensated.

Question 5Arkansas Insurance Statutes, Rules, and Regulations

Before an insurer may transact property and casualty insurance in Arkansas, it must obtain from the Insurance Commissioner:

  1. a producer license
  2. a surplus lines permit
  3. a certificate of authority Correct answer.
  4. a guaranty fund endorsement

Explanation

A certificate of authority is the license that authorizes an insurer to transact insurance business in Arkansas. Transacting without one makes the insurer an unauthorized insurer that is subject to penalties.

Question 6Arkansas Insurance Statutes, Rules, and Regulations

Insurers authorized in Arkansas must file their annual financial statement with the Insurance Department by:

  1. March 1 Correct answer.
  2. June 30
  3. December 31
  4. January 1

Explanation

The annual statement, prepared on the NAIC annual statement blank, is due by March 1 and covers the preceding calendar year. Late filing can result in fines and further regulatory action for serious or repeated violations.

Question 7Arkansas Insurance Statutes, Rules, and Regulations

To be eligible for an Arkansas resident producer license, an applicant must be at least:

  1. 18 years of age and a resident of Arkansas Correct answer.
  2. 18 years of age and a resident of any state
  3. 16 years of age and a high school graduate
  4. 21 years of age and a registered voter

Explanation

Arkansas requires resident producer applicants to be at least 18 years old and actual residents of the state, in addition to completing any required prelicensing education and passing the licensing examination. A nonresident must apply through the nonresident licensing process.

Question 8Arkansas Insurance Statutes, Rules, and Regulations

The Arkansas Property and Casualty Insurance Guaranty Fund exists to:

  1. insure property the voluntary market will not accept
  2. pay covered claims of insolvent member insurers Correct answer.
  3. provide state-funded auto liability coverage
  4. reimburse producers for unpaid commissions

Explanation

The guaranty fund protects policyholders when an authorized member insurer becomes insolvent by paying covered claims up to statutory limits. It is funded by assessments on member insurers rather than by state appropriations.

Question 9Arkansas Insurance Statutes, Rules, and Regulations

An Arkansas producer offers to pay half of a client's auto premium from her own pocket to win the account. This practice is:

  1. an illegal rebate Correct answer.
  2. lawful for small premiums
  3. lawful with the Commissioner's approval
  4. lawful if the insurer agrees

Explanation

Offering any inducement not specified in the policy, such as paying part of the premium, is rebating, which is a prohibited unfair trade practice. The Commissioner does not approve rebates, and an insurer's consent cannot make the practice lawful.

Question 10Arkansas Insurance Statutes, Rules, and Regulations

To persuade a client to replace an existing policy, a producer falsely tells her that her current insurer is about to fail. This conduct is best described as:

  1. defamation
  2. coercion
  3. twisting Correct answer.
  4. commingling

Explanation

Twisting is misrepresenting the terms or financial condition of an existing policy, or of a replacing insurer, to induce a policyholder to lapse, surrender, or replace coverage. It is a prohibited unfair trade practice.

Question 11Arkansas Insurance Statutes, Rules, and Regulations

Premiums a producer collects from insureds are:

  1. an escrow held for the insured's benefit
  2. the producer's own funds once entered on the agency books
  3. held in a fiduciary capacity for the insurer Correct answer.
  4. state property until the policy is delivered

Explanation

Premiums collected by a producer belong to the insurer or the insured, and the producer holds them in a fiduciary capacity. Commingling them with the producer's own funds or diverting them to other uses is grounds for license revocation.

Question 12Arkansas Insurance Statutes, Rules, and Regulations

When an insurer terminates a producer's appointment in Arkansas, the insurer must notify the Insurance Commissioner within:

  1. 10 days
  2. 15 days
  3. 20 days
  4. 30 days Correct answer.

Explanation

The insurer must file notice of termination of appointment with the Commissioner within 30 days after the effective date. The producer is also entitled to a copy of the notification.

Question 13Arkansas Insurance Statutes, Rules, and Regulations

An Arkansas producer who changes her business address must notify the Insurance Commissioner within:

  1. 60 days
  2. 30 days Correct answer.
  3. 45 days
  4. 10 days

Explanation

Licensees must keep their licensing record current and report a change of address within 30 days of the change. Notice may be given through the Department's licensing system.

Question 14Arkansas Insurance Statutes, Rules, and Regulations

A producer who holds a resident license in good standing in Texas applies for an Arkansas nonresident producer license. Arkansas will generally:

  1. require completion of Arkansas prelicensing education
  2. require a one-year supervised apprenticeship
  3. issue the license without another examination Correct answer.
  4. deny the application without an Arkansas office

Explanation

Under nonresident licensing reciprocity, Arkansas issues a nonresident license to a producer who is licensed and in good standing in a home state with substantially similar requirements. The applicant files an application and pays the fee but is not required to retake the licensing examination.

Question 15Arkansas Insurance Statutes, Rules, and Regulations

Which of the following best describes a power of the Arkansas Insurance Commissioner?

  1. Repealing statutes passed by the legislature
  2. Setting rates without any filing
  3. Adopting rules to enforce the insurance code Correct answer.
  4. Deciding federal insurance disputes

Explanation

The Commissioner administers and enforces the Arkansas Insurance Code and may adopt rules and regulations to carry out its provisions. The Commissioner's authority is limited by statute and does not include legislating or deciding federal questions.

Question 16Arkansas Insurance Statutes, Rules, and Regulations

In Arkansas, uninsured motorist coverage on a private passenger auto policy:

  1. may be excluded by the insurer's underwriting rules
  2. must be purchased as a stand-alone policy
  3. must be offered and may be rejected in writing Correct answer.
  4. applies only to commercial vehicles

Explanation

Arkansas requires insurers to offer uninsured motorist coverage with every auto liability policy, and the insured may reject it only by signing a written waiver. The rejection can generally be changed at renewal.

Question 17Arkansas Insurance Statutes, Rules, and Regulations

Before placing a property risk with a nonadmitted insurer, an Arkansas surplus lines broker must generally:

  1. obtain the Commissioner's prior written approval
  2. post a bond equal to the policy limit
  3. route the risk through the guaranty fund
  4. make a diligent search of the admitted market Correct answer.

Explanation

Surplus lines placement requires a diligent effort to place the risk with authorized insurers first; only if coverage is unavailable may the broker use an eligible nonadmitted insurer. The broker must also keep records documenting that search.

Question 18Arkansas Insurance Statutes, Rules, and Regulations

Under Arkansas unfair claims settlement practices rules, an insurer that receives a first-party property claim must:

  1. acknowledge and act on the claim promptly Correct answer.
  2. refer every claim over $10,000 to the Commissioner
  3. deny any claim with a late proof of loss
  4. pay the claim within 48 hours of first notice

Explanation

Insurers must acknowledge communications about a claim and act with reasonable promptness once liability is reasonably clear. Failing to adopt and follow reasonable standards for prompt investigation and settlement is itself an unfair practice.

Question 19Arkansas Insurance Statutes, Rules, and Regulations

An insurer charges two Arkansas insureds in the same actuarial class different rates for identical coverage with no objective basis. This is:

  1. unfairly discriminatory Correct answer.
  2. lawful if noted on the application
  3. a permitted competitive practice
  4. lawful if the insureds consent

Explanation

Rates must not be excessive, inadequate, or unfairly discriminatory, meaning price differences must be justified by differences in expected losses or expenses. Charging different prices to similarly situated insureds without an actuarial basis violates that standard.

Question 20Arkansas Insurance Statutes, Rules, and Regulations

Which of the following is grounds for the Arkansas Insurance Commissioner to revoke a producer's license?

  1. Holding a license in two states
  2. Selling a policy to a family member
  3. Declining to write a requested policy
  4. Misappropriating premium trust funds Correct answer.

Explanation

Misappropriating or converting premium trust funds breaches the producer's fiduciary duty and is a ground for suspension, revocation, or refusal to renew a license. Other grounds include fraud, misrepresentation, and licensing violations.

Question 21Arkansas Insurance Statutes, Rules, and Regulations

An Arkansas policyholder who believes her insurer has violated the insurance code may:

  1. force the insurer into binding arbitration
  2. demand the producer refund all premiums
  3. file a complaint with the Insurance Department Correct answer.
  4. sue the Commissioner for damages

Explanation

The Department's consumer services function receives and investigates complaints about insurers and producers and can take regulatory action based on the results. Filing a complaint does not replace the policyholder's own right to sue on the contract.

Question 22Arkansas Insurance Statutes, Rules, and Regulations

An Arkansas court finds that an insurer failed to pay a covered claim and the insured had to sue to collect. Under Arkansas law the insurer may also be liable for:

  1. a 6% penalty and court costs
  2. 12% damages plus attorney's fees Correct answer.
  3. interest only, at the legal rate
  4. triple damages under the consumer fraud act

Explanation

Arkansas law allows the court to award the amount of the loss plus a 12% penalty on the loss and a reasonable attorney's fee when the insurer fails to pay within the time the policy and statutes require. The penalty is intended to deter wrongful delay in paying valid claims.

Question 23Arkansas Insurance Statutes, Rules, and Regulations

When a corporation is licensed as an Arkansas insurance producer, the corporation must:

  1. file financial statements with the NAIC
  2. limit its sales to one line of authority
  3. designate a licensed compliance officer Correct answer.
  4. obtain a federal insurance charter

Explanation

A business entity license requires the entity to designate an individual licensed producer who is responsible for the entity's compliance with the insurance code. If that designated person's license lapses, the entity's license is affected as well.

Question 24Arkansas Insurance Statutes, Rules, and Regulations

A homeowner knowingly submits an inflated repair estimate to her insurer after a covered loss. Under Arkansas law, this conduct:

  1. may be prosecuted as insurance fraud Correct answer.
  2. is lawful because the insurer will adjust the figure
  3. voids coverage but carries no other penalty
  4. is only a civil matter with no criminal exposure

Explanation

Knowingly presenting a false or inflated claim for payment is insurance fraud, which may be prosecuted criminally and is also a ground for regulatory action. The Department's fraud unit investigates suspected false claims.

Question 25Arkansas Insurance Statutes, Rules, and Regulations

A producer's Arkansas license expired, but she continues to solicit and submit auto applications the following month. Which statement is correct?

  1. Her acts bind the insurer, so no violation occurs
  2. She may continue during a 90-day grace period
  3. She is operating unlicensed and can be penalized Correct answer.
  4. Only the insurer can be sanctioned for the activity

Explanation

A producer may not transact insurance after the license lapses; doing so is unlicensed activity subject to penalties. The insurer that accepts business from an unlicensed producer is also exposed to regulatory action.

Question 26Arkansas Insurance Statutes, Rules, and Regulations

How is the Arkansas Insurance Commissioner selected?

  1. Appointed by the Arkansas Supreme Court
  2. Elected by the state legislature
  3. Appointed by the Governor Correct answer.
  4. Elected by popular vote

Explanation

The Commissioner is appointed by the Governor, with Senate confirmation, to head the Arkansas Insurance Department. The position is not filled by a general election or by the legislature.

Question 27Arkansas Insurance Statutes, Rules, and Regulations

The Arkansas Insurance Commissioner's examination authority permits the Commissioner to:

  1. Inspect an insurer's books and records at reasonable times Correct answer.
  2. Set the salary of every licensed producer
  3. Seize an insurer's assets without legal process
  4. Require insurers to use only Department-approved software

Explanation

The Commissioner may examine the affairs, books, and records of insurers and other licensees; the costs of an examination are generally borne by the examined entity. The power is investigative and regulatory, not a license to seize property without legal authority.

Question 28Arkansas Insurance Statutes, Rules, and Regulations

When the Commissioner finds that an insurer has engaged in an unfair trade practice, the Commissioner may:

  1. Automatically cancel all of the insurer's policies
  2. Imprison the insurer's officers personally
  3. Issue a cease and desist order Correct answer.
  4. Order the insurer dissolved immediately without any appeal

Explanation

The Commissioner may issue cease and desist orders and pursue other administrative remedies, such as penalties or license suspension, after proper proceedings. The Commissioner does not personally imprison officers or automatically cancel every policy.

Question 29Arkansas Insurance Statutes, Rules, and Regulations

Before an insurer may transact insurance business in Arkansas, it must:

  1. Obtain a certificate of authority Correct answer.
  2. Join the guaranty fund as a policyholder
  3. File its bylaws only with the Secretary of State
  4. Post a $1 million bond with the state treasury

Explanation

An insurer must obtain a certificate of authority from the Insurance Commissioner before transacting insurance in Arkansas. The certificate evidences that the insurer has met the state's licensing and financial requirements.

Question 30Arkansas Insurance Statutes, Rules, and Regulations

An insurer that is not authorized in Arkansas but sells policies to Arkansas residents is:

  1. Exempt because Arkansas has no insurer licensing requirement
  2. Allowed to sell if it uses an Arkansas producer
  3. Required only to send a notice to the Governor
  4. Engaged in an unlawful transaction of insurance Correct answer.

Explanation

Transacting insurance in Arkansas without a certificate of authority is unlawful, subject to limited exceptions such as properly placed surplus lines coverage. Using a resident producer does not cure the lack of authorization.

Question 31Arkansas Insurance Statutes, Rules, and Regulations

An Arkansas surplus lines broker may place a risk with a nonadmitted insurer only if the insurer:

  1. Is owned by an Arkansas resident
  2. Has a policyholder surplus of at least $1,000
  3. Has never written insurance in another state
  4. Is eligible and on the Commissioner's list Correct answer.

Explanation

Surplus lines placements must use an eligible nonadmitted insurer that satisfies Arkansas financial and regulatory standards and appears on the Commissioner's approved list. Ownership, tiny surplus, or a lack of prior writings does not establish eligibility.

Question 32Arkansas Insurance Statutes, Rules, and Regulations

Who is responsible for paying the surplus lines premium tax on an Arkansas surplus lines policy?

  1. The nonadmitted insurer's home-state regulator
  2. The Arkansas Insurance Department
  3. The insured, in every case
  4. The surplus lines broker Correct answer.

Explanation

Arkansas requires the licensed surplus lines broker to collect and remit the applicable surplus lines premium tax. The tax is not paid by the Department or the regulator of another state.

Question 33Arkansas Insurance Statutes, Rules, and Regulations

What are the minimum liability limits required for private passenger auto insurance in Arkansas?

  1. 15/30/10
  2. 25/50/25 Correct answer.
  3. 20/40/15
  4. 50/100/50

Explanation

Arkansas's financial responsibility minimums are $25,000 per person, $50,000 per accident, and $25,000 for property damage. Policies must meet at least these limits.

Question 34Arkansas Insurance Statutes, Rules, and Regulations

For nonpayment of premium, an Arkansas private passenger auto insurer must give the insured at least how many days' written notice before canceling the policy?

  1. 20 days
  2. 45 days
  3. 10 days Correct answer.
  4. 30 days

Explanation

Arkansas requires at least 10 days' written notice before canceling a private passenger auto policy for nonpayment of premium. Other cancellations generally require a longer notice period.

Question 35Arkansas Insurance Statutes, Rules, and Regulations

Before an Arkansas private passenger auto insurer nonrenews a policy, it must generally give the named insured:

  1. 5 days' written notice
  2. No notice if the policy term has expired
  3. 20 days' written notice Correct answer.
  4. 60 days' written notice

Explanation

Arkansas requires the insurer to mail or deliver written notice of nonrenewal at least 20 days before the policy expiration date. The notice requirement is not eliminated simply because the term is ending.

Question 36Arkansas Insurance Statutes, Rules, and Regulations

How much continuing education must an Arkansas resident producer complete each two-year license term?

  1. 40 hours, including at least 8 hours of ethics
  2. 12 hours, including at least 1 hour of ethics
  3. 16 hours, with no ethics requirement
  4. 24 hours, including at least 3 hours of ethics Correct answer.

Explanation

Arkansas resident producers must complete 24 hours of continuing education every two years, and at least 3 of those hours must be in ethics. The requirement applies to licensed producers during each biennial term.

Question 37Arkansas Insurance Statutes, Rules, and Regulations

An Arkansas producer is convicted of a felony. The producer must notify the Insurance Commissioner:

  1. Within 24 hours of the arrest
  2. Within 30 days of the conviction Correct answer.
  3. Only when the license is next renewed
  4. Only if the felony involves insurance

Explanation

Arkansas requires a producer to report a criminal conviction to the Commissioner within 30 days. The duty is not limited to insurance-related felonies or deferred until renewal.

Question 38Arkansas Insurance Statutes, Rules, and Regulations

An Arkansas producer has an administrative license action taken against her by another state's insurance regulator. She must report the action to the Arkansas Commissioner:

  1. Only if the other state suspends her license for more than one year
  2. Within 5 business days of the filing
  3. Within 30 days of the final disposition Correct answer.
  4. At the time of her next appointment

Explanation

Producers must notify the Commissioner of administrative actions taken against them by another jurisdiction within 30 days of the final disposition. The reporting duty is not limited to long suspensions.

Question 39Arkansas Insurance Statutes, Rules, and Regulations

An Arkansas producer wants to pay an unlicensed person a fee for referring a customer who buys an insurance policy. Under Arkansas law, the producer may:

  1. Pay the fee only if the person explains policy terms
  2. Pay any amount because referral fees are unregulated
  3. Not pay a sale-based fee to an unlicensed person Correct answer.
  4. Pay the fee only if the customer signs a waiver

Explanation

Compensation that is contingent on the sale of insurance may generally be paid only to licensed producers. A nominal referral fee may be permissible only when it is not based on the sale and the unlicensed person does not discuss policy terms.

Question 40Arkansas Insurance Statutes, Rules, and Regulations

An Arkansas insurer publishes an advertisement that falsely claims its competitors are financially unstable. This is:

  1. Permitted if the insurer has a good-faith belief
  2. Prohibited only if the competitors sue
  3. Permitted because competitors are not insureds
  4. Prohibited as false or misleading advertising Correct answer.

Explanation

Arkansas prohibits advertisements containing untrue, deceptive, or misleading statements about the insurance business or another insurer. Good faith does not excuse a false statement, and enforcement does not depend on a competitor's lawsuit.

Question 41Arkansas Insurance Statutes, Rules, and Regulations

An Arkansas producer tells a client that a policy covers flood damage when the policy expressly excludes it. This conduct is:

  1. A misrepresentation of policy terms and an unfair trade practice Correct answer.
  2. Acceptable if the client does not file a flood claim
  3. Prohibited only for life insurance policies
  4. Acceptable because producers may interpret policy language broadly

Explanation

Misrepresenting the terms, benefits, or conditions of an insurance policy is an unfair trade practice under Arkansas law. The violation occurs when the false statement is made, not only if a claim is later filed.

Question 42Arkansas Insurance Statutes, Rules, and Regulations

Which of the following is an unfair claims settlement practice in Arkansas?

  1. Paying a valid claim within the policy period
  2. Requesting a proof of loss when the policy requires it
  3. Failing to act promptly on claim communications Correct answer.
  4. Conducting a reasonable investigation of a claim

Explanation

Unfair claims settlement practices include failing to acknowledge and act reasonably promptly upon communications about a claim. Prompt payment, reasonable investigation, and requiring a policy-mandated proof of loss are proper practices.

Question 43Arkansas Insurance Statutes, Rules, and Regulations

A person who reports suspected insurance fraud to Arkansas authorities in good faith is:

  1. Liable for defamation if the report is wrong
  2. Immune from civil liability for the report Correct answer.
  3. Prohibited from reporting unless the insurer agrees
  4. Required to pay a filing fee to the Commissioner

Explanation

Arkansas law provides immunity from civil liability for a person who reports suspected insurance fraud in good faith. The immunity encourages reporting and does not require insurer consent.

Question 44Arkansas Insurance Statutes, Rules, and Regulations

Under Arkansas rate regulation, the Commissioner may disapprove an insurance rate that is:

  1. Lower than the rate charged in neighboring states
  2. Excessive, inadequate, or unfairly discriminatory Correct answer.
  3. Approved by a competing insurer
  4. Based on the insurer's loss experience

Explanation

Rates must not be excessive, inadequate, or unfairly discriminatory. Rates based on loss experience are generally acceptable if they satisfy those standards.

Question 45Arkansas Insurance Statutes, Rules, and Regulations

The Arkansas Property and Casualty Insurance Guaranty Fund is financed primarily by:

  1. Fees paid by surplus lines brokers only
  2. A tax on policyholders' premiums
  3. Annual appropriations from the state general fund
  4. Assessments on member insurers Correct answer.

Explanation

The guaranty fund is funded through assessments on member insurers that write covered property and casualty lines in Arkansas. It is not financed by general state appropriations or a special policyholder tax.

Question 46Arkansas Insurance Statutes, Rules, and Regulations

When an insurer appoints a producer to act on its behalf in Arkansas, the insurer must:

  1. Post the appointment in the Arkansas Gazette
  2. Pay a fee to the producer's county clerk
  3. Obtain the producer's written promise to use only one insurer
  4. File the appointment with the Commissioner Correct answer.

Explanation

Insurers must file producer appointments with the Insurance Commissioner; the appointment gives the producer authority to act for that insurer. County clerks and newspaper publication are not part of the appointment process.

Question 47Arkansas Insurance Statutes, Rules, and Regulations

A person who solicits and sells insurance in Arkansas without a producer license is:

  1. Required only to register with the county sheriff
  2. Subject to enforcement action by the Commissioner Correct answer.
  3. Exempt if the person sells only one policy per year
  4. Allowed to do so if the insurer authorizes it

Explanation

Selling or soliciting insurance without the required producer license is unlawful and subject to administrative enforcement by the Commissioner. An insurer's authorization does not replace a state license.

Question 48Arkansas Insurance Statutes, Rules, and Regulations

Before the Commissioner revokes an Arkansas producer's license, the producer is entitled to:

  1. A jury trial in the Insurance Department
  2. A free replacement license for one year
  3. Notice and an opportunity for a hearing Correct answer.
  4. An automatic stay of all Department proceedings

Explanation

A license revocation must be preceded by notice of the charges and an opportunity for an administrative hearing. There is no right to a jury trial within the Insurance Department.

Question 49Arkansas Insurance Statutes, Rules, and Regulations

An Arkansas lender tells a borrower that the borrower must buy homeowners insurance from the lender's affiliated agency. This practice is:

  1. Prohibited only for commercial loans
  2. Permitted because lenders may require insurance
  3. Prohibited coercion Correct answer.
  4. Permitted if the agency offers a discount

Explanation

A lender may require that collateral be insured, but it may not coerce the borrower into buying insurance from a particular agency. Tying the loan to the lender's affiliated agency is prohibited coercion.

Question 50Arkansas Insurance Statutes, Rules, and Regulations

A company that finances insurance premiums for Arkansas insureds must:

  1. Be a bank chartered in Arkansas
  2. Register only with the Attorney General
  3. Obtain a securities dealer license
  4. Be licensed by the Commissioner Correct answer.

Explanation

Premium finance companies are regulated under Arkansas insurance law and must be licensed by the Insurance Commissioner. A bank charter or securities license is not the required authorization.