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GA Claims Adjuster practice questions

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Question 1Licensed Adjusters, Public Adjusters, Counselors & Surplus Lines Brokers

Under Georgia law, a person must obtain an adjuster license before doing which of the following?

  1. Soliciting life insurance applications from the public
  2. Investigating and settling claims for an insurer as an employee adjuster Correct answer.
  3. Selling surplus lines policies on behalf of an eligible broker
  4. Acting as a registered insurance counselor for a fee

Explanation

Georgia's adjuster licensing statute covers persons who investigate or settle claims on behalf of insurers, including staff adjusters, unless a specific exemption applies. Selling policies, counseling, and soliciting life applications are governed by agent, counselor, and broker licensing rules instead. The adjuster license attaches to the claims-handling function, not to the sale of coverage.

Question 2Licensed Adjusters, Public Adjusters, Counselors & Surplus Lines Brokers

Georgia requires a licensed adjuster to complete continuing education. Which statement best describes the general requirement for resident adjusters?

  1. CE hours only when the adjuster handles homeowners claims
  2. CE hours only for adjusters who also hold a producer license
  3. No CE at all once the adjuster passes the licensing exam
  4. A specified number of CE hours every two years, including ethics hours, reported to the Department Correct answer.

Explanation

Georgia imposes periodic continuing education on resident adjusters, with a set number of credit hours per renewal cycle and a required ethics component. Completion is reported to the Department, and noncompliance can block renewal. CE is not waived after exam passage, nor is it limited by claim type or by holding another license.

Question 3Licensed Adjusters, Public Adjusters, Counselors & Surplus Lines Brokers

An insurer wants to use a claims adjuster who is not licensed in Georgia but who will handle a single catastrophic event. Which approach is most consistent with Georgia licensing rules?

  1. Assume no license is needed because the adjuster works for an out-of-state insurer
  2. Register the adjuster as a surplus lines broker for the duration of the event
  3. Have the unlicensed adjuster work under the verbal supervision of a licensed adjuster
  4. Rely on the emergency/catastrophe adjuster permit process the Department makes available for declared events Correct answer.

Explanation

Georgia provides a mechanism for temporary or emergency adjuster permits tied to declared catastrophe events, allowing qualified out-of-state adjusters to work for a limited period. Working for an out-of-state insurer does not remove the Georgia requirement. Informal supervision and misclassifying the person as a surplus lines broker do not substitute for a permit.

Question 4Licensed Adjusters, Public Adjusters, Counselors & Surplus Lines Brokers

Which activity most clearly falls outside the scope of a Georgia public adjuster's authority?

  1. Preparing an inventory and damage estimate to support the insured's claim
  2. Negotiating a settlement amount with the insurer on the policyholder's behalf
  3. Binding the insurer to a coverage interpretation the insurer has rejected Correct answer.
  4. Charging the policyholder a fee for representing the insured in the claim

Explanation

A public adjuster represents the insured and may prepare estimates, inventories, and negotiate the claim, but cannot bind an insurer or decide coverage. Settlement authority on the insurer side rests with the insurer or its company adjuster. The public adjuster's role is advocacy for the policyholder within the claim process.

Question 5Licensed Adjusters, Public Adjusters, Counselors & Surplus Lines Brokers

A public adjuster contract with a policyholder in Georgia must generally include which element?

  1. A written contract signed by the insured that discloses the compensation terms Correct answer.
  2. A guarantee that the claim will be paid in full
  3. A waiver of the insured's right to cancel the contract
  4. A statement that the public adjuster is an employee of the insurer

Explanation

Georgia requires public adjusters to use a written contract with the insured that clearly states the compensation and other required disclosures. The contract cannot misrepresent the adjuster as an insurer representative or strip the insured's cancellation rights. Promising a specific claim outcome is improper.

Question 6Licensed Adjusters, Public Adjusters, Counselors & Surplus Lines Brokers

A public adjuster signs a representation contract with an insured on a Thursday. Under Georgia's rules on the insured's right to rescind such contracts, what is the best practice for the adjuster?

  1. Advise the insured in writing of the right to cancel within the statutory period and honor a timely cancellation Correct answer.
  2. Require the insured to waive cancellation as a condition of representation
  3. Begin negotiating immediately and treat the contract as final once signed
  4. Wait until the insurer pays the claim before discussing cancellation

Explanation

Georgia gives insureds a limited right to rescind a public adjuster contract, and the adjuster must disclose that right and honor a timely rescission. Treating the contract as immediately irrevocable or demanding a waiver defeats the statutory protection. Cancellation rights are not deferred until payment.

Question 7Licensed Adjusters, Public Adjusters, Counselors & Surplus Lines Brokers

A Georgia insurance counselor license authorizes which type of activity?

  1. Selling, soliciting, or negotiating insurance contracts for a commission
  2. Adjusting first-party property claims on behalf of an insurer
  3. Examining insurance policies and advising clients on coverage for a fee, without selling insurance Correct answer.
  4. Placing risks with nonadmitted insurers as a surplus lines broker

Explanation

Georgia's counselor license is for advising on insurance matters, such as reviewing policies and making coverage recommendations, in exchange for a fee. Counselors do not sell or negotiate contracts for commission, which distinguishes them from producers. Claims adjusting and surplus lines placement are separate licenses.

Question 8Licensed Adjusters, Public Adjusters, Counselors & Surplus Lines Brokers

A counselor charges a client a fee for reviewing a homeowners policy and recommending coverage changes. Which additional step is most consistent with Georgia counselor licensing rules?

  1. Obtain a producer license before delivering any advice
  2. Provide the client a written fee agreement or disclosure of the fee arrangement Correct answer.
  3. Place the recommended coverage with a nonadmitted insurer
  4. Report the fee to the insurer as a commission

Explanation

Insurance counselors are compensated by fee rather than commission, and Georgia expects the fee arrangement to be disclosed in writing to the client. The counselor does not need a producer license to advise, though selling would require one. Characterizing a counseling fee as a commission misstates the relationship.

Question 9Licensed Adjusters, Public Adjusters, Counselors & Surplus Lines Brokers

Which entity is eligible to be a surplus lines broker in Georgia?

  1. A public adjuster acting under a claim representation contract
  2. A person holding the required surplus lines broker license issued by the Department Correct answer.
  3. Any licensed producer who pays a one-time fee and never renews
  4. An unlicensed individual who refers clients to an admitted carrier

Explanation

Surplus lines placement in Georgia requires a specific surplus lines broker license issued by the Department, in addition to any underlying producer authority. The license is subject to renewal and continuing obligations. Public adjusters and unlicensed referrers have no surplus lines placement authority.

Question 10Licensed Adjusters, Public Adjusters, Counselors & Surplus Lines Brokers

Before placing a risk with a nonadmitted insurer, a Georgia surplus lines broker must generally make what showing?

  1. That the full amount of coverage was sought from and declined by authorized insurers Correct answer.
  2. That the insured signed a waiver of all coverage disputes
  3. That the nonadmitted insurer is licensed in at least one other state
  4. That the broker personally inspected the insured property

Explanation

Surplus lines placement is permitted only after a diligent effort to place the risk with authorized insurers fails, documented through the required search or declination record. The insured must also receive the required surplus lines disclosure. A waiver of coverage disputes, out-of-state licensing, or a personal inspection is not the governing condition.

Question 11Licensed Adjusters, Public Adjusters, Counselors & Surplus Lines Brokers

A surplus lines broker places a commercial property risk with an eligible nonadmitted insurer. Which document must the insured generally receive?

  1. A public adjuster representation agreement
  2. A copy of the insurer's internal claims manual
  3. A certificate of admitted-carrier guaranty fund coverage
  4. A written disclosure that the insurer is not licensed in Georgia and is not protected by the guaranty fund Correct answer.

Explanation

Georgia requires surplus lines brokers to give the insured a written disclosure that the insurer is not admitted and that the state guaranty fund does not protect the policy. This informs the insured of the distinct risk of using a nonadmitted carrier. Guaranty fund certificates, claims manuals, and adjuster agreements are not part of this requirement.

Question 12Licensed Adjusters, Public Adjusters, Counselors & Surplus Lines Brokers

Georgia's surplus lines broker must maintain records of the diligent search and placement. Which statement best describes the recordkeeping obligation?

  1. Records are kept solely by the nonadmitted insurer
  2. Records need only be kept if the insured requests them
  3. Records may be discarded once the policy is issued
  4. Records must be retained for the period required by statute or regulation and made available to the Department on request Correct answer.

Explanation

Surplus lines brokers must keep documentation of the placement, including the diligent search and disclosure, for the retention period set by Georgia law and produce it during examination. Discarding records at issuance or leaving retention to the insurer would defeat the regulatory purpose. The obligation runs to the broker.

Question 13Licensed Adjusters, Public Adjusters, Counselors & Surplus Lines Brokers

An insured asks a Georgia surplus lines broker to place coverage with a nonadmitted insurer that is not on the Department's eligible list. What is the broker's proper course?

  1. Place the risk and report it only at the next license renewal
  2. Place the risk and rely on the insurer's home-state license
  3. Decline to place the risk with that insurer because it is not eligible for surplus lines placement in Georgia Correct answer.
  4. Place the risk anyway because the insured consented

Explanation

Georgia maintains an eligibility list of nonadmitted insurers, and a surplus lines broker may place business only with insurers that appear on it or otherwise meet eligibility standards. Insured consent or a home-state license does not cure ineligibility. Delayed reporting does not make an ineligible placement proper.

Question 14Licensed Adjusters, Public Adjusters, Counselors & Surplus Lines Brokers

A licensed Georgia adjuster moves to another state and becomes a resident there. What is the most accurate statement about the Georgia adjuster license?

  1. The Georgia license remains fully valid indefinitely with no further action
  2. The Georgia license automatically converts to a surplus lines broker license
  3. The adjuster may continue handling Georgia claims without any license because of prior residency
  4. The adjuster should notify the Department and address nonresident licensing or termination of the Georgia license as the rules require Correct answer.

Explanation

A change of residency affects license status, and the adjuster must notify the Department and either terminate the resident license or obtain nonresident authority as appropriate. The license does not remain indefinitely valid without action, and it never converts into a different license type. Prior residency does not create continuing authority.

Question 15Licensed Adjusters, Public Adjusters, Counselors & Surplus Lines Brokers

Which circumstance would most likely subject a Georgia adjuster to disciplinary action by the Department?

  1. Documenting a claim decision with photographs and a written estimate
  2. Misrepresenting policy terms to an insured to induce a lower settlement Correct answer.
  3. Referring a coverage question to the insurer's underwriting department
  4. Settling a claim within the adjuster's granted authority

Explanation

Georgia adjuster discipline reaches dishonest or misleading claims practices, including misrepresenting policy provisions to influence a settlement. Documenting decisions, settling within authority, and escalating coverage questions are ordinary, proper claim-handling activities. Discipline targets misconduct, not routine professional judgment.

Question 16Licensed Adjusters, Public Adjusters, Counselors & Surplus Lines Brokers

A public adjuster in Georgia wishes to solicit a client at the insured's home shortly after a fire loss. Which statement best reflects the rules on public adjuster solicitation?

  1. Solicitation requires prior written approval from the insurer
  2. Solicitation is permitted at any time and place without restriction
  3. Solicitation is prohibited during declared disaster periods and is subject to restrictions on timing and manner Correct answer.
  4. Solicitation is allowed only if the adjuster is also a licensed surplus lines broker

Explanation

Georgia restricts public adjuster solicitation, including prohibitions during declared disaster or emergency periods and limits on approaching insureds at certain times. These rules protect vulnerable claimants from immediate pressure. Solicitation does not depend on surplus lines authority or insurer approval.

Question 17Licensed Adjusters, Public Adjusters, Counselors & Surplus Lines Brokers

Which statement correctly distinguishes a company adjuster from a public adjuster in Georgia?

  1. The company adjuster must be a counselor, while the public adjuster must be a producer
  2. The company adjuster represents the insurer, while the public adjuster represents the insured for compensation Correct answer.
  3. The company adjuster is paid by the insured, while the public adjuster is paid by the insurer
  4. The company adjuster works without a license, while the public adjuster is licensed

Explanation

The core distinction is allegiance: company adjusters act for the insurer, and public adjusters are retained by and advocate for the insured. Both roles are licensed in Georgia, and the payment flows follow the representation. Neither role requires counselor or producer status as a substitute.

Question 18Licensed Adjusters, Public Adjusters, Counselors & Surplus Lines Brokers

A Georgia licensed public adjuster is offered a fee arrangement that pays a percentage of the claim amount. Which consideration is most important under Georgia rules?

  1. Percentage fees are always prohibited for public adjusters
  2. The compensation must comply with the statutory limits and be disclosed in the written contract Correct answer.
  3. The fee must be reported as a surplus lines premium
  4. The fee must be approved in advance by the insurer

Explanation

Georgia regulates public adjuster compensation, including limits on percentage-based fees, and requires the arrangement to be set out in the written contract with the insured. The insurer does not approve the adjuster's fee, and such a fee is not a surplus lines premium. Blanket prohibition is too broad.

Question 19Licensed Adjusters, Public Adjusters, Counselors & Surplus Lines Brokers

A surplus lines broker collects premium and applicable surplus lines tax on a Georgia placement. What is the broker's responsibility regarding the tax?

  1. The insured remits the tax directly to the Department
  2. The broker remits the surplus lines tax as required by Georgia law and keeps supporting records Correct answer.
  3. No tax applies because the insurer is nonadmitted
  4. The nonadmitted insurer remits the tax in its home state only

Explanation

In Georgia, the surplus lines broker is responsible for remitting the surplus lines premium tax on placements and maintaining records that support the remittance. The insured does not handle the remittance, and the nonadmitted insurer's home-state taxes do not satisfy Georgia's requirement. Nonadmitted status does not eliminate the tax.

Question 20Licensed Adjusters, Public Adjusters, Counselors & Surplus Lines Brokers

Which person most clearly needs a Georgia adjuster license?

  1. A producer who only sells policies and never discusses claims
  2. A clerical employee who only opens mail in the claims office
  3. An independent contractor who investigates and evaluates auto damage claims for an insurer Correct answer.
  4. A counselor who reviews policies for a fee but never handles claims

Explanation

Investigating and evaluating claims on behalf of an insurer is adjuster activity requiring a license, even for independent contractors. Purely clerical staff who do not exercise claim judgment generally fall outside the license requirement. Selling policies or counseling without claims work involves different licenses.

Question 21Licensed Adjusters, Public Adjusters, Counselors & Surplus Lines Brokers

An insured wants a public adjuster to represent him on a claim, but the insurer has already issued a settlement check. What is the public adjuster's most appropriate action?

  1. Refuse representation because a check has been issued
  2. Endorse the check on the insured's behalf
  3. Negotiate directly with the insurer without any written agreement
  4. Review the claim and settlement with the insured and represent the insured on any unresolved or disputed issues under a written contract Correct answer.

Explanation

A public adjuster may still assist an insured by reviewing the settlement and pursuing unresolved or disputed amounts, provided a compliant written contract is in place. Issuance of a check does not end the insured's ability to question the claim. The adjuster cannot endorse the insured's check or act without a contract.

Question 22Licensed Adjusters, Public Adjusters, Counselors & Surplus Lines Brokers

Which statement about nonresident adjuster licensing in Georgia is most accurate?

  1. A nonresident adjuster with a home-state license may never handle Georgia claims
  2. A nonresident adjuster must establish Georgia residency before any license is issued
  3. A nonresident adjuster is automatically licensed in Georgia upon passing any state exam
  4. A nonresident adjuster may obtain Georgia nonresident adjuster authority, often relying on the home-state license Correct answer.

Explanation

Georgia provides a nonresident adjuster licensing path, generally allowing qualified applicants with an active home-state license to obtain nonresident authority. Georgia residency is not required, and licensing is not automatic upon passing another state's exam. Nonresident adjusters can handle Georgia claims once properly licensed.

Question 23Licensed Adjusters, Public Adjusters, Counselors & Surplus Lines Brokers

A Georgia surplus lines broker is approached by an insured who wants coverage that three authorized insurers have declined. What is the broker's next appropriate step?

  1. Place the coverage with an eligible nonadmitted insurer and provide the required disclosure Correct answer.
  2. Place the coverage with any nonadmitted insurer without checking eligibility
  3. Refer the insured to a public adjuster to handle the placement
  4. Tell the insured that coverage is unavailable and close the file

Explanation

When authorized insurers decline the risk after a documented search, the broker may place it with an eligible nonadmitted insurer and must give the required disclosure. Eligibility must be confirmed before placement, and coverage is not automatically unavailable. Public adjusters do not place insurance.

Question 24Licensed Adjusters, Public Adjusters, Counselors & Surplus Lines Brokers

Which of the following best describes the Department's authority over a licensed adjuster who fails to comply with continuing education requirements?

  1. The Department must convert the license to a counselor license
  2. The Department has no authority over CE compliance
  3. The Department may refuse to renew or take disciplinary action against the license Correct answer.
  4. The Department may only send a reminder letter with no consequence

Explanation

Georgia conditions license renewal on satisfying continuing education, and the Department may refuse renewal or impose discipline for noncompliance. A reminder letter alone does not reflect the enforcement power. The Department does not convert an adjuster license into a counselor license as a consequence.

Question 25Licensed Adjusters, Public Adjusters, Counselors & Surplus Lines Brokers

A public adjuster is also licensed as a surplus lines broker. In representing an insured on a fire claim, which rule is most important to avoid a conflict?

  1. The adjuster may use surplus lines authority to place replacement coverage without disclosure
  2. The adjuster must keep the claim representation separate from any insurance placement activity and disclose the dual role Correct answer.
  3. The adjuster may charge a single combined fee without explanation
  4. The adjuster may settle the claim and place the risk in one transaction

Explanation

Holding dual licenses creates potential conflicts, so the adjuster should separate the claim representation from placement activities and disclose the dual role to the insured. Combining fees without explanation or using placement authority to benefit from the claim is improper. The two functions must not be merged into one transaction.

Question 26Licensed Adjusters, Public Adjusters, Counselors & Surplus Lines Brokers

A Georgia public adjuster is hired by an insured to handle a fire loss claim. The public adjuster's compensation is typically based on which arrangement?

  1. A flat fee set by the Department of Insurance
  2. An hourly fee paid by the insured
  3. A salary paid by the insurer
  4. A commission on the claim settlement Correct answer.

Explanation

Public adjusters in Georgia are compensated by the insured, usually through a percentage of the settlement amount. This commission structure aligns the adjuster's interest with maximizing the claim recovery. Hourly fees and flat fees are possible but not the typical arrangement described in the context of public adjusting.

Question 27Licensed Adjusters, Public Adjusters, Counselors & Surplus Lines Brokers

Which license is required for a person who, for a fee, advises insureds on insurance coverage but does not sell insurance or adjust claims?

  1. Surplus lines broker
  2. Insurance counselor Correct answer.
  3. Public adjuster
  4. Company adjuster

Explanation

An insurance counselor license authorizes advising clients on insurance matters for a fee without selling or negotiating insurance contracts. Public adjusters handle claims, while surplus lines brokers place nonadmitted insurance. Company adjusters work for insurers.

Question 28Licensed Adjusters, Public Adjusters, Counselors & Surplus Lines Brokers

A Georgia surplus lines broker places a policy with an eligible nonadmitted insurer. Within how many days must the broker file a written report of the placement with the Department?

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

Explanation

Georgia requires surplus lines brokers to file a report of each placement with the Department within 30 days of the effective date. This allows the Department to track nonadmitted insurance activity and collect premium tax. Other timeframes do not match the statutory requirement.

Question 29Licensed Adjusters, Public Adjusters, Counselors & Surplus Lines Brokers

A public adjuster licensed in Georgia is convicted of a felony involving dishonesty. What is the most likely consequence for the adjuster's license?

  1. Suspension pending appeal
  2. A fine but no license action
  3. Automatic revocation of the license Correct answer.
  4. No action unless the crime relates to insurance

Explanation

Under Georgia law, a felony conviction involving dishonesty is grounds for automatic revocation of an adjuster license. The Department must revoke the license without discretion. Other penalties like suspension or fines do not apply when revocation is mandated.

Question 30Licensed Adjusters, Public Adjusters, Counselors & Surplus Lines Brokers

Which statement best describes the role of a surplus lines broker in Georgia?

  1. Places coverage with admitted insurers when standard markets are unavailable
  2. Adjusts claims for nonadmitted insurers
  3. Advises insureds on coverage without selling insurance
  4. Places coverage with nonadmitted insurers after a diligent search Correct answer.

Explanation

Surplus lines brokers may place coverage with nonadmitted insurers only after conducting a diligent search to confirm that admitted insurers will not accept the risk. They do not adjust claims or merely advise on coverage. Placing with admitted insurers is the role of standard agents, not surplus lines brokers.

Question 31Licensed Adjusters, Public Adjusters, Counselors & Surplus Lines Brokers

A public adjuster contract in Georgia must include which of the following to be enforceable?

  1. A clause requiring arbitration of all disputes
  2. A statement that the adjuster is employed by the insurer
  3. A fixed fee schedule approved by the Department
  4. A provision allowing cancellation within three business days Correct answer.

Explanation

Georgia law requires public adjuster contracts to give the insured a right to cancel within three business days after signing. This protects consumers from hasty decisions. The other provisions are not mandatory and some are incorrect.

Question 32Licensed Adjusters, Public Adjusters, Counselors & Surplus Lines Brokers

A Georgia adjuster license is required for which of the following individuals?

  1. A licensed agent who occasionally answers coverage questions
  2. A clerical employee who only files claim documents
  3. An attorney settling a claim on behalf of a client
  4. A person who investigates and settles claims for an insurer Correct answer.

Explanation

Any person who investigates or settles claims for an insurer must hold an adjuster license. Attorneys, clerical staff, and agents performing incidental duties are exempt. The license ensures competence and regulatory oversight.

Question 33Licensed Adjusters, Public Adjusters, Counselors & Surplus Lines Brokers

Which of the following is a continuing education requirement for Georgia adjusters?

  1. 15 hours annually, including 3 hours of ethics
  2. 30 hours every two years, with no ethics requirement
  3. 12 hours annually, including 2 hours of ethics
  4. 24 hours every two years, including 3 hours of ethics Correct answer.

Explanation

Georgia adjusters must complete 24 hours of continuing education every two years, with at least 3 hours in ethics. This requirement ensures adjusters stay current on industry practices and ethical standards. The other options do not match the biennial total or ethics component.

Question 34Licensed Adjusters, Public Adjusters, Counselors & Surplus Lines Brokers

A Georgia surplus lines broker collects premium and surplus lines tax from an insured. What must the broker do with the tax?

  1. Retain the tax as compensation
  2. Remit it to the Department within 30 days Correct answer.
  3. Forward it to the nonadmitted insurer
  4. Deposit it in a trust account for one year

Explanation

The surplus lines broker must remit the surplus lines tax to the Department within 30 days of collection. The tax is a state revenue, not broker compensation or insurer property. Trust account holding is not required for the tax itself.

Question 35Licensed Adjusters, Public Adjusters, Counselors & Surplus Lines Brokers

Which of the following persons is exempt from Georgia's adjuster licensing requirement?

  1. An independent adjuster handling claims for multiple insurers
  2. A public adjuster representing insureds
  3. A person who adjusts claims for a self-insured company Correct answer.
  4. A company adjuster employed by an insurer

Explanation

Employees of self-insured companies who adjust claims solely for their employer are exempt from adjuster licensing. Independent adjusters, public adjusters, and company adjusters must all be licensed. The exemption recognizes that self-insureds adjust their own claims.

Question 36Licensed Adjusters, Public Adjusters, Counselors & Surplus Lines Brokers

A public adjuster in Georgia may charge a fee that is contingent on the amount of the claim settlement. Which statement is correct?

  1. Contingent fees must be approved by the insurer
  2. Contingent fees are prohibited for public adjusters
  3. Contingent fees are allowed only for claims over $10,000
  4. Contingent fees are allowed but must be reasonable and disclosed Correct answer.

Explanation

Georgia permits public adjusters to charge contingent fees as long as they are reasonable and clearly disclosed in the contract. There is no prohibition or dollar threshold, and insurer approval is not required. The focus is on transparency and fairness to the insured.

Question 37Licensed Adjusters, Public Adjusters, Counselors & Surplus Lines Brokers

Which of the following actions by a Georgia adjuster would constitute an unfair claim settlement practice?

  1. Requesting additional documentation to verify a claim
  2. Denying a claim without a reasonable investigation Correct answer.
  3. Explaining policy exclusions to the insured
  4. Offering a settlement within policy limits

Explanation

Unfair claim settlement practices include denying claims without conducting a reasonable investigation. Requesting documentation, offering settlements within limits, and explaining exclusions are proper claim handling activities. The key is whether the adjuster acted reasonably and in good faith.

Question 38Licensed Adjusters, Public Adjusters, Counselors & Surplus Lines Brokers

A Georgia insurance counselor charges a fee for advice on an insurance policy. Which of the following must the counselor do?

  1. Provide a written disclosure of fees Correct answer.
  2. Obtain approval from the insurer
  3. Carry errors and omissions insurance
  4. Be licensed as a surplus lines broker

Explanation

Insurance counselors must disclose their fees in writing to clients. This ensures transparency in the advisory relationship. Licensing as a surplus lines broker, insurer approval, and E&O insurance are not required for counselors.

Question 39Licensed Adjusters, Public Adjusters, Counselors & Surplus Lines Brokers

Which of the following is true regarding nonresident adjuster licensing in Georgia?

  1. Nonresidents cannot be licensed as adjusters in Georgia
  2. Nonresidents may qualify for a license based on their home state license Correct answer.
  3. Nonresidents must pass the Georgia adjuster exam
  4. Nonresidents must maintain a Georgia office

Explanation

Georgia allows nonresident adjusters to be licensed based on their home state license, often through reciprocity. They are not required to maintain a Georgia office or pass the Georgia exam if their home state license is in good standing. This facilitates interstate practice.

Question 40Licensed Adjusters, Public Adjusters, Counselors & Surplus Lines Brokers

A surplus lines broker in Georgia must maintain records of each surplus lines transaction for how long?

  1. 5 years Correct answer.
  2. 2 years
  3. 3 years
  4. 10 years

Explanation

Georgia requires surplus lines brokers to keep records of transactions for at least five years. This allows the Department to audit compliance and verify tax remittances. Shorter retention periods do not meet the statutory requirement.

Question 41Licensed Adjusters, Public Adjusters, Counselors & Surplus Lines Brokers

A public adjuster in Georgia solicits a client at the insured's home within 24 hours after a loss. Which statement is correct?

  1. This is allowed if the adjuster charges no fee
  2. This is permitted if the adjuster has a license
  3. This is allowed only with written consent from the insurer
  4. This is prohibited as an unfair trade practice Correct answer.

Explanation

Georgia prohibits public adjusters from soliciting business at the scene of a loss or at the insured's home within a specified period after a loss, typically 24 hours. This prevents exploitation of vulnerable insureds. License status, insurer consent, or fee waivers do not make such solicitation lawful.

Question 42Licensed Adjusters, Public Adjusters, Counselors & Surplus Lines Brokers

A Georgia surplus lines broker places a risk with a nonadmitted insurer. Which of the following must the broker provide to the insured?

  1. A written disclosure that the insurer is not admitted Correct answer.
  2. A copy of the policy
  3. A guarantee of payment from the state guaranty fund
  4. A certificate of insurance from an admitted insurer

Explanation

Surplus lines brokers must disclose to the insured that the insurer is not admitted and is not protected by the state guaranty fund. This informs the insured of the risks of dealing with a nonadmitted insurer. A policy copy is provided but is not the specific disclosure required; guaranty fund protection does not apply.

Question 43Licensed Adjusters, Public Adjusters, Counselors & Surplus Lines Brokers

Which of the following is a permissible reason for the Department to place an adjuster on probation?

  1. The adjuster has taken a leave of absence
  2. The adjuster has committed a minor violation of insurance laws Correct answer.
  3. The adjuster has changed employers
  4. The adjuster has filed for bankruptcy

Explanation

The Department may impose probation for minor violations of insurance laws as an alternative to suspension or revocation. Bankruptcy, job changes, and leaves of absence are not grounds for discipline. Probation allows the adjuster to continue working under conditions.

Question 44Licensed Adjusters, Public Adjusters, Counselors & Surplus Lines Brokers

A public adjuster in Georgia is also licensed as a surplus lines broker. When representing an insured on a claim, which rule applies?

  1. The adjuster may place the claim-related insurance with a nonadmitted insurer without disclosure
  2. The adjuster may adjust the claim and broker the coverage simultaneously without restriction
  3. The adjuster may charge both a public adjuster fee and a broker commission
  4. The adjuster must disclose the dual role and obtain consent Correct answer.

Explanation

When a public adjuster also acts as a surplus lines broker, the adjuster must disclose the dual role and obtain the insured's consent to avoid conflicts of interest. Charging both fees and placing coverage without disclosure are prohibited. Transparency is required to protect the insured.

Question 45Licensed Adjusters, Public Adjusters, Counselors & Surplus Lines Brokers

Which of the following best describes the diligent search requirement for surplus lines placements in Georgia?

  1. The broker must file a diligent search affidavit with the Department before binding coverage
  2. The broker must search the entire admitted market before placing with a nonadmitted insurer
  3. The broker must obtain a written statement from the insured that admitted coverage is unavailable
  4. The broker must contact at least three admitted insurers and document refusals Correct answer.

Explanation

Georgia requires surplus lines brokers to conduct a diligent search, which generally means contacting at least three admitted insurers and documenting their refusals. This demonstrates that the risk cannot be placed in the admitted market. Searching the entire market or obtaining insured statements are not the standard; filing before binding is not required.

Question 46Licensed Adjusters, Public Adjusters, Counselors & Surplus Lines Brokers

A Georgia adjuster is licensed but allows a nonlicensed assistant to negotiate claim settlements. What is the most likely outcome?

  1. The assistant must obtain a license within 30 days
  2. The adjuster is subject to disciplinary action for aiding unlicensed activity Correct answer.
  3. The insurer must pay a fine but the adjuster is not disciplined
  4. The adjuster is not responsible because the assistant acted independently

Explanation

An adjuster who permits an unlicensed person to negotiate settlements is aiding and abetting unlicensed activity, which is grounds for disciplinary action. The adjuster remains responsible for the assistant's actions. The assistant cannot cure the violation by later obtaining a license, and the insurer's fine does not absolve the adjuster.

Question 47Licensed Adjusters, Public Adjusters, Counselors & Surplus Lines Brokers

Which of the following is a key difference between a company adjuster and a public adjuster in Georgia?

  1. Company adjusters need no license; public adjusters must be licensed
  2. Company adjusters represent the insurer; public adjusters represent the insured Correct answer.
  3. Company adjusters handle only commercial claims; public adjusters handle only residential claims
  4. Company adjusters are paid by the insured; public adjusters by the insurer

Explanation

The fundamental difference is representation: company adjusters work for the insurer, while public adjusters are hired by and represent the insured. Both must be licensed. Their compensation sources and claim types are not defined by this distinction.

Question 48Licensed Adjusters, Public Adjusters, Counselors & Surplus Lines Brokers

A surplus lines broker in Georgia places a policy with a nonadmitted insurer that later becomes insolvent. Which statement is true regarding the insured's protection?

  1. The insured has no guaranty fund protection Correct answer.
  2. The insured is protected by the Georgia guaranty fund
  3. The Department will pay the claim from a special fund
  4. The broker must reimburse the insured for unpaid claims

Explanation

Nonadmitted insurers are not members of the Georgia guaranty fund, so insureds have no guaranty fund protection. The broker must disclose this lack of protection. The broker is not required to reimburse the insured, and the Department does not pay claims from a special fund.

Question 49Licensed Adjusters, Public Adjusters, Counselors & Surplus Lines Brokers

Which of the following must a Georgia public adjuster include in a contract with an insured?

  1. The adjuster's license number Correct answer.
  2. A waiver of the insured's right to sue
  3. A clause requiring the insured to accept any settlement offered
  4. A statement that the adjuster is a state employee

Explanation

Public adjuster contracts in Georgia must include the adjuster's license number, among other required disclosures. This helps the insured verify the adjuster's credentials. Statements of state employment, waivers of rights, and mandatory settlement acceptance are not permitted.

Question 50Licensed Adjusters, Public Adjusters, Counselors & Surplus Lines Brokers

A Georgia adjuster license expires on June 30. The adjuster completes continuing education on July 15. What is the consequence?

  1. The license is lapsed and the adjuster must reinstate it Correct answer.
  2. The Department automatically extends the license for 60 days
  3. The license remains active because CE was completed within 30 days
  4. The adjuster may continue working while CE is processed

Explanation

Continuing education must be completed before the license expiration date. Completing CE after expiration results in a lapsed license, and the adjuster must apply for reinstatement, possibly with penalties. There is no grace period for CE completion.