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OR Property & Casualty practice questions

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Question 1Oregon Insurance Laws, Rules, and Regulations

Who appoints the Insurance Commissioner of Oregon?

  1. The Senate Committee on Insurance Regulation
  2. The Director of DCBS Correct answer.
  3. Oregon voters in a statewide general election
  4. The Governor, by direct appointment

Explanation

Oregon law places appointment of the Insurance Commissioner with the Director of the Department of Consumer and Business Services, the department that houses the Division of Financial Regulation. The Commissioner is therefore an appointed regulator rather than a statewide elected official.

Question 2Oregon Insurance Laws, Rules, and Regulations

Which Oregon entity administers and enforces the state's insurance laws?

  1. The Oregon Secretary of State's office
  2. The Oregon Public Utility Commission
  3. The Division of Financial Regulation within DCBS Correct answer.
  4. The State Treasury's insurance bureau

Explanation

The Division of Financial Regulation, a division of the Department of Consumer and Business Services, administers the Oregon Insurance Code and enforces it under the direction of the Insurance Commissioner. Producers, insurers, and licensing matters all fall under this division.

Question 3Oregon Insurance Laws, Rules, and Regulations

What is the minimum age for an individual to qualify for an Oregon insurance producer license?

  1. 16 years old
  2. 17 years old
  3. 21 years old
  4. 18 years old Correct answer.

Explanation

Oregon requires a producer license applicant to be at least 18 years of age, in addition to meeting education, examination, and background requirements. There is no separate minimum age of 21 for licensure.

Question 4Oregon Insurance Laws, Rules, and Regulations

What are Oregon's minimum required liability limits for a private passenger auto policy?

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

Explanation

Oregon's financial responsibility law sets minimum liability coverage of $25,000 per person, $50,000 per accident for bodily injury, and $20,000 for property damage. A policy written with lower limits does not satisfy the state's compulsory insurance requirement.

Question 5Oregon Insurance Laws, Rules, and Regulations

Oregon requires personal injury protection (PIP) benefits on a private passenger auto policy of at least what amount?

  1. $5,000 per person
  2. $15,000 per person Correct answer.
  3. $50,000 per person
  4. $25,000 per person

Explanation

Oregon mandates PIP coverage of at least $15,000 per person for reasonable and necessary medical expenses and related benefits, regardless of fault. This coverage is part of the required auto policy unless a limited statutory exception applies.

Question 6Oregon Insurance Laws, Rules, and Regulations

How many continuing education credit hours must an Oregon producer complete during each two-year license term?

  1. 30 hours, including 5 hours of ethics
  2. 24 hours, including 3 hours of ethics Correct answer.
  3. 12 hours, including 1 hour of ethics
  4. 40 hours, including 6 hours of ethics

Explanation

Oregon requires 24 continuing education hours every two years, at least 3 of which must be in ethics. Hours must be earned from approved providers and reported before the license term ends.

Question 7Oregon Insurance Laws, Rules, and Regulations

An Oregon insurance producer license is issued for a term of how long?

  1. Two years Correct answer.
  2. Four years
  3. Three years
  4. One year

Explanation

Oregon issues producer licenses on a two-year term, and the license must be renewed with the required continuing education completed. A producer who lets the license lapse may not transact insurance until it is reinstated.

Question 8Oregon Insurance Laws, Rules, and Regulations

What is the document called that the Oregon Insurance Commissioner issues to authorize an insurer to transact insurance in the state?

  1. A producer license
  2. A certificate of convenience
  3. A certificate of authority Correct answer.
  4. A permit of admission

Explanation

An insurer must hold a certificate of authority from the Commissioner before it may transact insurance in Oregon; insurers holding one are called admitted or authorized insurers. A producer license, by contrast, is issued to individuals and business entities that sell insurance.

Question 9Oregon Insurance Laws, Rules, and Regulations

Under Oregon law, uninsured motorist coverage must be:

  1. Offered at limits equal to the liability limits unless the insured chooses lower limits in writing Correct answer.
  2. Limited by statute to the state minimum limits no matter what liability limits are purchased
  3. Available only on commercial auto policies and not on personal auto policies
  4. Issued only after the applicant signs a written request and pays an extra premium

Explanation

Oregon requires insurers to offer uninsured motorist coverage at limits matching the policy's liability limits, although the insured may select lower limits in writing. The same requirement extends to underinsured motorist coverage.

Question 10Oregon Insurance Laws, Rules, and Regulations

How many days' written notice must an Oregon auto insurer give before canceling a policy for nonpayment of premium?

  1. 20 days
  2. 30 days
  3. 10 days Correct answer.
  4. 5 days

Explanation

Oregon requires at least 10 days' written notice of cancellation when the reason is nonpayment of premium. Other permitted midterm cancellations require a longer, 30-day notice.

Question 11Oregon Insurance Laws, Rules, and Regulations

An Oregon insurer decides not to renew a personal auto policy. How far in advance of the expiration date must it mail notice to the insured?

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

Explanation

Oregon requires the insurer to give the insured at least 30 days' written notice before the expiration date when it intends not to renew. Mailing to the insured's last known address satisfies the notice requirement.

Question 12Oregon Insurance Laws, Rules, and Regulations

For a personal auto policy that has been in effect for more than 60 days, which of the following is a valid ground for midterm cancellation under Oregon law?

  1. The insured filed one claim during the policy term
  2. Nonpayment of premium or fraud in the application Correct answer.
  3. The producer no longer wishes to represent the insurer
  4. The insurer wants to reduce the size of its book of business

Explanation

Once a policy has been in force more than 60 days, Oregon restricts midterm cancellation to specified grounds such as nonpayment of premium, fraud or material misrepresentation, and a substantial change in the risk. A single claim or a business decision by the insurer is not a permitted ground.

Question 13Oregon Insurance Laws, Rules, and Regulations

An insurer must file notice of appointment with the Division of Financial Regulation within how many days after a producer begins transacting business on its behalf?

  1. 10 days
  2. 30 days Correct answer.
  3. 60 days
  4. 15 days

Explanation

Oregon requires the appointing insurer to notify the Division of the appointment within 30 days after the producer begins acting for the insurer. The appointment must be in place for the producer to lawfully represent that insurer.

Question 14Oregon Insurance Laws, Rules, and Regulations

When an insurer terminates a producer's appointment, within what period must the insurer notify the Division of Financial Regulation?

  1. 90 days
  2. 30 days Correct answer.
  3. 10 days
  4. 45 days

Explanation

Oregon requires the insurer to notify the Division of the termination of an appointment within 30 days, and the insurer must also give notice to the producer. Prompt reporting keeps appointment records current for the public and for regulators.

Question 15Oregon Insurance Laws, Rules, and Regulations

A licensed Oregon producer moves her agency to a new office. Within how many days must she notify the Division of Financial Regulation of the address change?

  1. 60 days
  2. 30 days Correct answer.
  3. 10 days
  4. 15 days

Explanation

Oregon requires licensees to report a change of business or mailing address to the Division within 30 days of the change. Accurate address information ensures the producer receives renewal and official notices.

Question 16Oregon Insurance Laws, Rules, and Regulations

A producer offers a prospect a $100 gift card if the prospect buys an auto policy through him. This conduct is best described as:

  1. Rebating Correct answer.
  2. Coercion
  3. Permitted marketing practice
  4. Twisting

Explanation

Rebating is offering any inducement not specified in the policy, such as cash or a gift card, to persuade a person to buy insurance. Oregon prohibits rebating because it results in unlawful discrimination among policyholders with similar risks.

Question 17Oregon Insurance Laws, Rules, and Regulations

A producer tells a client that the client's current insurer is 'about to be seized by regulators' so the client will drop that policy and buy a new one. This practice is:

  1. Twisting Correct answer.
  2. Defamation
  3. Coercion
  4. Rebating

Explanation

Twisting is a misrepresentation or misleading comparison made to induce a policyholder to lapse, surrender, or replace an existing policy. The false statement about the insurer's condition is the mechanism used to cause the replacement.

Question 18Oregon Insurance Laws, Rules, and Regulations

A producer collects premium payments from insureds and holds them before remitting them to the insurer. Those funds are held:

  1. As an unconditional loan from the insured to the agency
  2. As the producer's personal funds once the agency deposit clears
  3. Free of any bookkeeping or accounting requirement
  4. In a fiduciary capacity for the insurer Correct answer.

Explanation

Premiums collected by a producer are trust funds held in a fiduciary capacity for the insurer or the insured, and commingling them with agency operating funds is prohibited. Oregon treats misuse of these funds as grounds for license discipline.

Question 19Oregon Insurance Laws, Rules, and Regulations

Before placing a commercial risk with a nonadmitted insurer, an Oregon surplus lines broker must:

  1. Charge a premium rate lower than the rate available in the admitted market
  2. Complete a documented diligent search showing authorized insurers declined the risk Correct answer.
  3. Obtain written approval from the Commissioner for each individual policy
  4. Submit the completed policy to the NAIC within 24 hours of issuance

Explanation

Oregon permits surplus lines placement only after a diligent search shows that the coverage cannot be obtained from authorized insurers, and the search must be documented. The broker must also be licensed for surplus lines and give the required disclosure that the insurer is not protected by the guaranty association.

Question 20Oregon Insurance Laws, Rules, and Regulations

The Oregon Insurance Guaranty Association was created to:

  1. Pay covered claims of policyholders of insolvent admitted property and casualty insurers Correct answer.
  2. Guarantee that every admitted insurer remains profitable
  3. Set the rates charged by surplus lines carriers
  4. Provide coverage for risks that the voluntary market refuses to insure

Explanation

The guaranty association is funded by assessments on member insurers and responds when an admitted property and casualty insurer becomes insolvent, paying covered claims up to statutory limits. It is not an insurer and does not write new coverage.

Question 21Oregon Insurance Laws, Rules, and Regulations

An Oregon insurer cancels a policy midterm because it no longer wishes to insure the risk, a ground the policy permits. The return of unearned premium is computed on what basis?

  1. Pro rata Correct answer.
  2. Flat rate
  3. Minimum earned premium
  4. Short rate

Explanation

When the insurer initiates a midterm cancellation, the unearned premium is returned pro rata so the insured pays only for the coverage received. Short-rate computation, which carries a penalty, is used when the insured cancels.

Question 22Oregon Insurance Laws, Rules, and Regulations

After a covered auto collision, Oregon law prohibits an insurer from:

  1. Asking the claimant to obtain more than one repair estimate
  2. Paying the claim directly to the repair facility the claimant selects
  3. Requiring the claimant to use a particular repair shop Correct answer.
  4. Inspecting the damaged vehicle before issuing payment

Explanation

Oregon gives the claimant the right to choose the repair shop, and the insurer may not force the use of a particular facility. The insurer may still inspect the vehicle, negotiate labor rates with the chosen shop, and request estimates.

Question 23Oregon Insurance Laws, Rules, and Regulations

A producer completes only 20 of the 24 continuing education hours required for the current term. What is the result at renewal?

  1. The missing hours are waived for producers with ten years of experience
  2. The license cannot be renewed until the missing hours are completed Correct answer.
  3. The producer may renew by paying double the renewal fee in place of the hours
  4. The license is automatically extended for one year

Explanation

Oregon conditions renewal on completing the full 24 hours, including the ethics requirement, during the two-year term. A producer who is short hours must cure the deficiency before the license can continue.

Question 24Oregon Insurance Laws, Rules, and Regulations

Which statement accurately describes how workers' compensation insurance is provided in Oregon?

  1. Employers must self-insure because no policy coverage is available
  2. Only private admitted insurers may write workers' compensation coverage
  3. Only SAIF Corporation may write workers' compensation coverage
  4. Both private insurers and SAIF Corporation write the coverage Correct answer.

Explanation

Oregon uses a competitive workers' compensation market in which private insurers and SAIF Corporation, a state-chartered insurer, both write coverage. Employers may also qualify to self-insure, but purchasing a policy is the common approach.

Question 25Oregon Insurance Laws, Rules, and Regulations

A producer licensed in good standing in Washington applies for an Oregon nonresident producer license. Oregon will generally:

  1. Require the applicant to post a $50,000 surety bond with the Division
  2. Require the applicant to complete the Oregon prelicensing course and sit for the Oregon examination
  3. Issue the license without an Oregon examination if the home-state license is in good standing Correct answer.
  4. Deny the license unless the applicant maintains a staffed office in Oregon

Explanation

Oregon grants nonresident producer licenses on a reciprocal basis, so a producer licensed and in good standing in the home state is not required to repeat prelicensing education or the Oregon exam. The nonresident must still comply with Oregon law and continuing education requirements.

Question 26Oregon Insurance Laws, Rules, and Regulations

What are the minimum auto liability limits required under Oregon's financial responsibility law?

  1. $15,000 per person, $30,000 per accident, and $10,000 for property damage
  2. $20,000 per person, $40,000 per accident, and $15,000 for property damage
  3. $25,000 per person, $50,000 per accident, and $20,000 for property damage Correct answer.
  4. $50,000 per person, $100,000 per accident, and $25,000 for property damage

Explanation

Oregon's financial responsibility law sets minimum liability limits at $25,000 per person, $50,000 per accident for bodily injury, and $20,000 for property damage. These are the minimum limits a policy must have to satisfy the law.

Question 27Oregon Insurance Laws, Rules, and Regulations

What is the minimum amount of personal injury protection benefits an Oregon auto policy must provide per person?

  1. $25,000
  2. $5,000
  3. $15,000 Correct answer.
  4. $50,000

Explanation

Oregon requires personal injury protection benefits of at least $15,000 per person for medical and related expenses, regardless of fault. PIP is separate from liability coverage.

Question 28Oregon Insurance Laws, Rules, and Regulations

A person in Oregon who solicits and negotiates property insurance for a commission must first:

  1. join a trade association
  2. hold a valid Oregon insurance producer license Correct answer.
  3. register with the Oregon Secretary of State
  4. obtain a business license from the city

Explanation

Soliciting, negotiating, or selling insurance for compensation requires an Oregon producer license for the line involved. A business registration or local license does not authorize insurance transactions.

Question 29Oregon Insurance Laws, Rules, and Regulations

Which act is an unfair trade practice under Oregon insurance law?

  1. Requiring proof of loss before paying a claim
  2. Refusing to issue a homeowners policy because of the applicant's race Correct answer.
  3. Using claim history to set an auto premium
  4. Canceling a policy for nonpayment of premium

Explanation

Oregon unfair trade practice laws prohibit refusing to insure, or limiting coverage, based on protected characteristics such as race. Claim investigation, proof of loss, and nonpayment cancellation are not themselves unfair discrimination.

Question 30Oregon Insurance Laws, Rules, and Regulations

A producer tells a buyer that a standard homeowners policy covers flood damage when it does not. This is:

  1. commingling
  2. misrepresentation Correct answer.
  3. twisting
  4. boycott

Explanation

Misrepresentation is making a false or misleading statement about the terms or benefits of an insurance policy. Twisting involves inducing a policy surrender; commingling involves premium funds; boycott involves concerted refusal to deal.

Question 31Oregon Insurance Laws, Rules, and Regulations

An applicant knowingly gives a false odometer reading to obtain a lower auto premium. Under Oregon law this is best described as:

  1. insurance fraud Correct answer.
  2. a binder error
  3. rebating
  4. unfair discrimination

Explanation

Knowingly providing false or misleading information to an insurer to obtain coverage or a lower premium is insurance fraud. Rebating involves giving value as an inducement; unfair discrimination involves unequal treatment.

Question 32Oregon Insurance Laws, Rules, and Regulations

Under Oregon's financial responsibility law, a driver must:

  1. file a certificate with the DMV every year
  2. carry a copy of the policy at all times in the vehicle
  3. purchase only liability coverage
  4. provide proof of insurance to a police officer upon request Correct answer.

Explanation

Oregon drivers must carry proof of insurance and show it to a police officer on request. The law does not require filing a certificate annually or keeping the full policy in the vehicle.

Question 33Oregon Insurance Laws, Rules, and Regulations

An Oregon insurance binder provides:

  1. a guarantee that the insurer will renew the policy
  2. temporary evidence of coverage Correct answer.
  3. permanent coverage that cannot be canceled
  4. authority for an unlicensed person to sell insurance

Explanation

A binder is temporary evidence that coverage is in force until the policy is issued or the binder expires. It is not permanent coverage and does not authorize unlicensed sales.

Question 34Oregon Insurance Laws, Rules, and Regulations

An Oregon producer may share a commission on a property policy with:

  1. an unlicensed office assistant who solicited the sale
  2. a real estate agent who is not licensed as an insurance producer
  3. another producer who is properly licensed for that line Correct answer.
  4. a client as an inducement to buy the policy

Explanation

Commissions for insurance sales may be shared only with persons properly licensed for the line of insurance involved. Paying an unlicensed person for soliciting, or giving a client a commission as an inducement, is prohibited.

Question 35Oregon Insurance Laws, Rules, and Regulations

A producer persuades a client to surrender an existing life insurance policy by falsely stating that the current insurer is failing. This practice is:

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

Explanation

Twisting is inducing a policyholder to lapse, surrender, or replace coverage through misrepresentation or incomplete comparison. Defamation is a false statement about an insurer's financial condition; coercion is compelling action through pressure.

Question 36Oregon Insurance Laws, Rules, and Regulations

Which conduct is an unfair claim settlement practice under Oregon law?

  1. Explaining the policy provisions that exclude the loss
  2. Denying a claim after a reasonable investigation
  3. Failing to act promptly on claim communications Correct answer.
  4. Requesting a signed proof of loss form

Explanation

Unfair claim settlement practices include failing to acknowledge and act promptly on communications about a claim. Denying after reasonable investigation, requesting proof of loss, and explaining exclusions are proper.

Question 37Oregon Insurance Laws, Rules, and Regulations

When an Oregon insurer denies a claim, it must:

  1. wait 60 days before sending the denial
  2. give a reasonable explanation for the denial Correct answer.
  3. obtain the Insurance Commissioner's approval first
  4. pay at least half of the claimed amount

Explanation

An insurer that denies a claim must give a reasonable explanation of the basis for denial. It does not need Commissioner approval and cannot simply delay or pay half.

Question 38Oregon Insurance Laws, Rules, and Regulations

Under Oregon insurance rating law, rates must not be:

  1. lower than the rates of competing insurers
  2. excessive, inadequate, or unfairly discriminatory Correct answer.
  3. based on the insurer's loss experience
  4. changed without the insured's written consent

Explanation

Oregon rating law requires rates to be neither excessive nor inadequate and not unfairly discriminatory. Rates may be based on loss experience and may differ from competitors.

Question 39Oregon Insurance Laws, Rules, and Regulations

An Oregon producer must report to the Division of Financial Regulation an administrative action taken against the producer by another state within:

  1. 90 days after the final disposition
  2. 10 days after the action is filed
  3. 60 days after the action is filed
  4. 30 days after the final disposition Correct answer.

Explanation

Oregon producers must report administrative actions taken by another state within 30 days after final disposition. The report is made to the Division of Financial Regulation.

Question 40Oregon Insurance Laws, Rules, and Regulations

An Oregon business entity that sells insurance must:

  1. be owned by a licensed producer
  2. designate a licensed producer to be responsible Correct answer.
  3. employ only licensed producers as officers
  4. obtain a separate license for each office

Explanation

A business entity selling insurance must hold an Oregon license and designate a licensed producer responsible for its insurance transactions. Ownership by a producer or licensing each office is not the requirement.

Question 41Oregon Insurance Laws, Rules, and Regulations

Oregon may issue a temporary insurance producer license to:

  1. continue business after a producer's death or disability Correct answer.
  2. any applicant who has not taken the licensing exam
  3. an insurer that needs to appoint a new CEO
  4. a person who wants to sell insurance for only one weekend

Explanation

Oregon may issue a temporary producer license to continue business after a licensed producer dies or becomes disabled. It is not a way to avoid the exam or license an insurer's executive.

Question 42Oregon Insurance Laws, Rules, and Regulations

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

  1. immune from civil liability for the report Correct answer.
  2. liable for defamation if the report is wrong
  3. prohibited from testifying in court
  4. required to pay the insurer's investigation costs

Explanation

Oregon law provides immunity from civil liability for good-faith reports of suspected insurance fraud. The reporter is not liable for defamation merely because the report is later not substantiated.

Question 43Oregon Insurance Laws, Rules, and Regulations

After a covered auto collision, an Oregon insurer may:

  1. suggest a shop but let the insured choose another Correct answer.
  2. refuse to pay if the insured chooses a different shop
  3. require the insured to use an insurer-selected repair shop
  4. charge the insured a penalty for using another shop

Explanation

Oregon law lets the insured choose the repair shop; the insurer may suggest a shop but cannot require one or penalize the insured for choosing another. Payment is based on reasonable repair cost.

Question 44Oregon Insurance Laws, Rules, and Regulations

The Oregon FAIR Plan was established primarily to:

  1. insure only coastal properties against tsunami
  2. provide basic property coverage for hard-to-place risks Correct answer.
  3. sell workers' compensation insurance to state agencies
  4. replace the Oregon Insurance Guaranty Association

Explanation

The Oregon FAIR Plan is a residual market mechanism that provides basic property coverage for owners unable to obtain it in the voluntary market. It does not sell workers' compensation or replace the guaranty association.

Question 45Oregon Insurance Laws, Rules, and Regulations

An insurer may pay a commission to:

  1. a client who provided a testimonial
  2. a licensed producer who sold the policy Correct answer.
  3. an unlicensed person who referred a friend
  4. an unlicensed secretary who mailed the application

Explanation

An insurer may pay commissions only to a licensed producer who sold the policy. Referral fees to unlicensed persons and payments to clients as inducements are prohibited.

Question 46Oregon Insurance Laws, Rules, and Regulations

An Oregon driver with only the minimum required auto liability coverage causes an accident injuring one person, with damages of $60,000. How much will the insurer pay for that person's bodily injury?

  1. $60,000
  2. $25,000 Correct answer.
  3. $20,000
  4. $50,000

Explanation

With minimum limits of $25,000 per person and $50,000 per accident, the insurer pays at most $25,000 for one person's bodily injury. The remaining damages are the driver's personal responsibility.

Question 47Oregon Insurance Laws, Rules, and Regulations

An Oregon producer holds only a property and casualty producer license. She sells a life insurance policy. Which statement is true?

  1. She acted properly because property and casualty includes life
  2. She may sell life if she completes continuing education later
  3. She exceeded her authority and may be disciplined Correct answer.
  4. She may sell life if the insurer appoints her first

Explanation

A property and casualty license authorizes only property and casualty lines, not life insurance. Selling outside the licensed line is unauthorized and subject to discipline.

Question 48Oregon Insurance Laws, Rules, and Regulations

A person seeks to acquire control of an Oregon-authorized insurer. Under Oregon law, the person must:

  1. obtain prior approval of the Insurance Commissioner Correct answer.
  2. do nothing if the person is already a producer
  3. obtain approval only from the insurer's board
  4. file a notice after the acquisition closes

Explanation

Oregon requires prior approval by the Insurance Commissioner before a person acquires control of an authorized insurer. Filing after closing or relying only on board approval is insufficient.

Question 49Oregon Insurance Laws, Rules, and Regulations

An Oregon surplus lines broker may place coverage with a nonadmitted insurer only if the insurer:

  1. is approved by the insured's lender
  2. is a member of the Oregon Insurance Guaranty Association
  3. is licensed in any state
  4. is on the Division's eligible list Correct answer.

Explanation

A surplus lines broker may use a nonadmitted insurer only if the insurer is on the Division's eligible surplus lines insurer list. Being licensed in another state or approved by a lender is not enough.

Question 50Oregon Insurance Laws, Rules, and Regulations

A loss is covered by a policy from a nonadmitted insurer placed by an Oregon surplus lines broker. Which statement is true about the Oregon Insurance Guaranty Association?

  1. It pays the claim up to the policy limit
  2. It does not cover the claim Correct answer.
  3. It pays only property damage claims
  4. It covers the claim if the broker is licensed

Explanation

The Oregon Insurance Guaranty Association covers claims against insolvent authorized insurers, not nonadmitted surplus lines insurers. The insured therefore has no guaranty association protection for that policy.